With improved business environment, experts say telcos and technology companies will provide better services, OZIOMA UBABUKOH writes
The KPMG 2015 Technology Industry Outlook Survey has revealed that macroeconomic conditions and the dynamic global regulatory and tax environment are among the leading challenges to technology companies’ growth.
In a study conducted in the United States of America, more than half of the respondents said that the speed of economic recovery presented the greatest risk to company growth, while 40 per cent cited the impact of new regulations.
The respondents, in the survey, further stated that new regulations such as stricter data privacy and protection, particularly outside the United States; global tax and revenue repatriation proposals and changes to the US and international revenue recognition accounting standards were creating challenges for technology companies.
About 55 per cent of the respondents agreed that speed of economy recovery was a major threat to the technology industry; while another 40 per cent, representing a 67.5 per cent from the preceding year, feared impact of new regulations and legislations significantly challenged the growth in the technology sector.
Although explicit statistics of this nature are yet to be published in Nigeria, public and experts’ sentiments on the impact of what appears a lopsided regulation policy in Nigeria are not farfetched.
For example, reviewing the issue of spectrum sales, the Report Nigeria 2015 identified some regulatory issues affecting the process.
The report indicated that one major challenge to the rapid deployment of new spectrum was the sheer number of government entities involved in the sector. For instance, the Nigeria Communications Commission has a mandate to license new spectrum in an effort to boost national wireless capacity, particularly in the rural areas.
The National Broadcasting Commission is responsible for implementing the transition to digital broadcasting and subsequently hand over the newly cleared frequency to the NCC. These two entities are managed in part by the National Frequency Management Council, an advisory body chaired by the Minister of Communications and composed of representatives from various other ministries and government agencies.
As technology companies gear up to tackle the growing and dynamic nature of consumers, viz-a-viz the constant changes in market conditions, industry players in Nigeria have said it is apparent that regulations are right.
For this reasons, Nigerians and indeed others around the world were held aback when the NCC slammed a record $5.2bn (N1.04tn) fine on MTN Nigeria, the highest single fine for any business entity so far. Although the issue has since been resolved, the ripples generated are still fresh in the people’s minds.
Experts say the advancement in the ICT sector in Nigeria must be acknowledged. They specifically note that the sector’s overall contribution to the Gross Domestic Product plays it up as one to be reckoned with.
The President, Association of Telecommunications Companies of Nigeria, Mr. Olusola Teniola, said he had told the NCC that “the industry seeks further allocation and utilisation of spectra that will contribute to the growth of mobile broadband penetration in rural areas of the country this year.”
He also said, “The options presented at the Spectrum Trading Forum hosted by the NCC in 2016 should be explored and implemented in 2017, specifically in consideration of the Nigerian terrain. The migration of analogue TV to digital TV should be a major focus during 2017 and this should free up more broadband-type spectra that will allow high-speed or superfast broadband to be easily rolled out.”
Teniola said the regulator should also see local content development in 2017 for the Information and Communications Technology industry in general, stressing that the government should further collaborate with the industry, civic society and academia to find the best fit for Nigeria in ensuring that capital flight was minimised in the areas of software, digital content and data hosting.
The ATCON president said, “Telecoms regulation will need to balance the Over-the-Top presence, alongside the current industry setup of strong Mobile Network Operators and a few Internet Service Providers against the uncertainty of the Nigerian economic situation, viz-a-viz infrastructure investments and capital deployed to achieve it.
“In 2017, the telecoms industry needs to see an immediate clarity of data price floor and other intervention instruments that will need to be explored and maybe introduced into the industry to ensure competition (or lack of) doesn’t stifle innovation for the long-term growth of industry as a whole.”
He added, “The year 2017 is where the NCC will be looked upon by all industry players for a level playing field to exist in the emerging broadband data era in Nigeria.”
Meanwhile, experts have said that more investment is likely to come into the sector by 2017, given the government efforts at the 2016 International Telecommunications Union Telecoms World where the NCC-led Nigerian delegation had wooed global telecoms investors to bring their investments into the country, promising potential investors high return on investment and friendly climate.
One of the experts, the President, National Association of Telecommunication Subscribers, Mr. Deolu Ogunbanjo, had said that there should not have been any reason for number portability provided all telecoms operators had achieved the minimum coverage to provide high quality of service to subscribers across the country.
He said though the industry had attracted a lot of infrastructure investment, majority of which had been channelled into building of telecoms infrastructure, “more investment was still needed to achieve ubiquitous telecoms infrastructure to drive the economy.”
Ogunbanjo added, “So, the MNP will continue to be an option for subscribers using the over 153 million active lines in the country until we are able to achieve superlative quality of service that is satisfactory to all telecoms subscribers on their respective mobile networks.”
The Executive Vice Chairman, NCC, Prof. Umar Danbatta, in November 2016, declared that investment in the nation’s telecommunications industry had reached $68bn from about $35bn about two years ago.
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