NCC and its hypocritical approach to the growth and sustenance of the telecoms industry

A few weeks ago, the Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Prof. Umaru Danbatta, met with stakeholders in the Nigerian Information and Communication Technology ICT sector and challenged them to play an active role in attracting more foreign direct investments into the nation’s economy.

He urged players in the sector to seize the opportunity which the Nigeria Investment Session forum discussions offers by attending and showcasing their indigenous innovations at the ITU Telecom Conference coming up on November 14-17 in Bangkok, Thailand.

Hear him: “We are here to restrategise on how we can attract more meaningful investments into our country. We are here to fine-tune our story about the growth and attraction of our sector. We are here to think of ways to convince would-be investors on the potential and capacity of our country.” He added:“We will tell them that Nigeria is safe for investors and return on investment (ROI) is assured. We will tell them that our regulatory processes are open, effective and transparent.”

Following the statement by Prof. Danbatta, there are a few questions worth asking.

Should the NCC be looking to bring in more investors into the telecom industry at this time, considering there are many challenges being experienced by the existing investors, which are yet to be addressed effectively? Are the current players enjoying a return on investment (ROI) since their foray into the Nigerian telecoms market?

Can we in all sincerity say that the telecom industry is investor-friendly and can attract more investments? Your guess is as good as mine. The cost of doing business in Nigeria is still one of the highest in the world and the hypocritical approach taken by the NCC gives the regulator a false sense that all is rosy for the operators. It is highly unlikely that prospective investors would be willing to come into the Nigerian market especially at a time like this unless there are overwhelming indications that a feasible plan to address the current industry challenges is in place.

The telecom industry as presently constituted is bogged down by ineffective regulations and riddled with unpredictable and draconian policies like that which allowed the imposition of N1.04 trillion fine on one of the operators, over its failure to disconnect lines that were not fully registered. Clearly, MTN failed to comply with NCC regulations but must you throw away the baby with the bath water?

A more sensible way to have handled this was for the government to consider the long term implication of such punitive actions on investment and look for more effective ways to balance the punishment against the offence such that whilst the errant company is corrected, the business is preserved. Investor analysts are attributing the fine to the first ever operational loss posted by MTN Group in its 2016 half year financial report.

It is time for the NCC to put its house in order. Looking for new investors into the telecom industry at this point in time is a less strategic move than creating a vibrant, efficient and competitive environment that will enable the existing investors fully optimize their capacity.

The NCC must first assure existing and prospective investors of return on their investments by assuring and ensuring proactive regulation and strengthen regulatory processes. My take is that if the climate is attractive for investment, the NCC would not need to campaign for investors as the industry would sell itself.