N1.17b telecoms fine: Subscribers as first casualties?

N1.17b telecoms fine: Subscribers as first casualties?

The face-off between the Nigerian Communications Commission and the four GSM operators over  the N1.17 billion fines has become an unsettling factor in the industry, three weeks ago when the issue came up. Going by various indications, there seems to be no end in sight to this imbroglio.

The saying that when two elephants fight, the grass suffers may find expression and a resting place in the on-going tussle between the Nigerian Communications Commission and the quartet of MTN Nigeria, Globacom, Airtel and Etisalat. The four GSM operators that were fined a total of N1.17 billion for not meeting the regulator’s standard on quality of service set for the month of March and April 2012.

NCC had on May 11, 2012 came tough on the four major GSM operators and fined them, claiming to have given them various warnings before the eventual sanctions. It added that the sanctions would serve as deterrent to them for failing to improve on the quality of service as prescribed in the regulations.

The Commission, just like telecoms subscribers, became angry over what looks like an unending trend in poor quality of services across all the networks and decided to wield its big stick by slamming MTN and Etisalat the fine of N360 million each; Airtel is to pay N270 million, while Globacom is expected to pay N180 million.

The regulator, had in a letter, signed on behalf of the Executive Vice Chairman of NCC, Dr. Eugene Juwah by the Director, Legal and Regulatory Services, Ms. Josephine Amuwa, and the Head of Compliance Monitoring and Enforcement, Mr. Ubale Maska, communicated the penalties to the operators, and informed them of the contravention charges of additional N2, 500,000 per day for as long as the contravention period persists.”

NCC deadline date of May 25 has come and gone and the contravention period has entered its 12th day today, meaning that the operators have incurred additional N120 million for abusing the grace period given to them.

Despite meetings by the two parties, interventions from some quarters and continued maneuvering, lobbying, pleadings as it were, the regulator has refused to back down, insisting the operators must pay the fine before the next line of actions can be determined.

At the hit of the matter, one of the operators had told The Guardian that there were possibilities of the operators seeking legal redress on the issue. This was also confirmed by the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo in an interview with journalists, stressing that while they hoped the matter would be resolved amicably, “we are not ruling out the option of seeking legal redress if it comes to that.”

But, probably, after due consideration of the after effect, the operators might have backed on the court issue.

One of the operators, who confided in The Guardian at the weekend, said their meeting with the NCC last week ended in futility, as the commission refused to back down on the issue, adding that the regulator said they can only discuss further after paying the N1.17 billion fine.

According to him, “we have not perfected our plans on the court issue, at least for now. “Let us still explore all available means at our disposal, which we can’t disclose now because of the sensitivity of this matter. But I know we shall resolve this issue soonest”

Efforts by the operators to get the minister of Communications Technology, Mrs. Omobola Johnson to compel the NCC to wave the sanction also proved abortive. The minister had met in Abuja with the leadership of the affected telecommunications outfit and promised to look into the case.   However, weeks after the meeting, no positive light seems to be coming from the ministry, apparently, leaving the telecoms operators to bear the cross themselves.

But in the light of these crises, the questions in the minds of stakeholders in the sector are numerous, among which are, what becomes the fate of the subscribers?, will this fine actually solve the perennial challenges hindering quality of service upgrade in the country?, will NCC not compromise after much pressure and lobbies?, whose coffer will the N1.17 billion eventually enters if paid by the operators?, what measures will the regulator apply to ensure that there were no transfer aggressions from the operators to the subscribers?

Speaking to the News Agency of Nigeria in Lagos, the president of Nigeria Internet Group (NIG), Mr. Bayo Banjo, expressed fear that subscribers might unknowingly be made to pay the fine imposed on the GSM operators for poor services.

Banjo said that the service providers were used to having their way in every situation and that the sanction might not really affect them.

Analysing the possible scenario, the NIG president said, “For instance, MTN has  above 40 million subscribers, multiply the number by N10 and you will get N400 million.’’

According to him, the operators might raise money for the fine by programming the computer to deduct N10 from each of its customers’ available credit.

He said that the sanction would not serve as a deterrent but a means of further enriching the operators.

The NIG chief said that the monetary sanction would make the operators give excuses on why they would not be able to do what they ought to do.

He said that what NCC needed to do was to sanction the managing directors of the companies if the quality of service did not meet the required standard.

To a former president of Association of Telecoms Companies of Nigeria, Dr. Emmanuel Ekuwem, the action of MTN, Globacom, Airtel and Etisalat not to have paid the fine, even after the farce period was tantamount to undermining the authority of NCC.

“They see the N1.17 billion fine as another barking by the NCC, and it is not good for the industry to undermine the powers of a regulator that has statutory power, backed by law. What this means is that they will continue to take the consumers for granted”, he stated.

According to Ekuwem, the excuses of telecoms operators over poor quality of service were as old as the telecoms revolution. “A call party is in the same conference hall with the calling party, yet the network will not activate the call, with the excuse that the calling party is not available, while in the actual sense, both the calling party and the call party are seated close to each other in the same hall with their lines open.

“In the process, the account of the subscriber is debited without getting service from the operators. The operators are aggressively signing on more subscribers on their networks with many bandwidth intensive value-added services, without commensurate increase in their network capacity,” he added.

Speaking in the same vein, the president of National Association of Telecoms Subscribers of Nigeria (NATCOMS), Chief Deolu Ogunbanjo, while Commending NCC, he called on the commission to redirect the N1.17 billion fine. He suggested that the amount be shared among affected telecoms subscribers.

According to him, the action of NCC amounted to raising money for government, leaving the subscribers out of the matter, when in actual sense it was the subscribers that suffered the pains and loss of money associated with poor telecoms service offering.

Ogunbanjo queried that how much would have accrued to the operators, while they offer bad services during the period under review, stressing that NCC should look at the case from that angle to be able to make better decision, especially in the future.

However, reports had it that in the first quarter of the year, telephone calls earned operators about N291.8 billion, as the number of active lines hit 99.1 million in the country.

The breakdown of this spending by subscribers was based on an Average Revenue Per User figure of N1, 000 for the Nigerian telecoms industry.

The ARPU is a financial performance benchmark in the telecoms industry that measures the average monthly revenue generated by operators from each customer.

The NCC EVC had also debunked claims to compensate subscribers with the N1.17 billion fine.

Juwah said: “Suggestions that such fines be paid to subscribers are not only trite but will not serve as a deterrent. Our rough calculations showed that sharing the N1.17bn among over 99 million active subscribers in the network will amount to an average of no more than N10 per subscriber.

“Surely, no Nigerian mobile phone subscriber would wish to receive a credit of N10 from his operator as deterrent to service providers for poor quality of service. In fact, this suggestion is tantamount to supporting the operators to continue to provide poor quality of service as it would be easier for operators to credit subscribers with this amount than pay penalties for poor services rendered.”

Recalling a previous incident in which service providers were asked by NCC to give N175 credit to each subscriber, Juwah said that was due to an outage in the networks at the time.

But to the Chairman of ALTON, NCC’s procedure for imposing the fine on operators was faulty, insisting that the action of the commission was not in accordance with the telecoms Act that set it up.

“NCC must see itself as a regulator and be fair and transparent and allow due process in its regulatory functions. Sanctions and penalty regime is very bad for the industry and it sends signals of unpredictable regulatory environment to the international community,” Adebayo said.

He posited that no amount of fine would solve the various industry challenges but rather worsen the situation.

“No amount of penalties or fines would solve the problems of QoS in the country. “Will this fine address the issue of fibre cuts, vandalism, theft, consistent interference, multiple taxation and above all the power challenge the operators experience daily? Rather than the fine serving as deterrence, it will further impinged on the growth of the sector. All these have to be factored first, before jumping into conclusion. The fine is just an attempt to show that something is being done. We expect the regulator to do more than it has done by addressing the issues confronting operators in the country,” he stated.

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