Stakeholder Tasks NCC, Says 90% of Tier 2, 3 Operators May Die in 5 Years

Telecom lawyer, Mr Ayoola Oke has warned stated that over ninety percent of home grown telecoms operators (tier 2 and tier 3 operators) may go bust within the next five years.

The ICT Legal and Regulatory Expert, who was also  Special Assistant to the Former EVC, Nigerian Communications Commission, NCC Engr. Ernest Ndukwe,  said the bigger telecom operators are suffocating the local small ones.

Oke said the industry subdivided into three tiers, is now practically ooerating as a one tier industry where the big swallows the small.

He regretted that almost all the operators in tier 2 and 3 that were active and vibrant 14 years ago are now dead or struggling, leaving the tier 1 operators with little or no competition that will lead to improvements.

He said none of the local operators in Tier 3 have been able to grow to become Tier 2 operators because they are dying, adding that the country would be left with a tier 1 Oligopoly if the home grown operators eventually die out.

He cited the instance of bigger operators asking smaller operators to pay for termination rate in dollars rather than the country’s legal tender which is the naira as one of the evils killing the industry.

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He said: “It is not a prophesy, if certain regulatory steps are not taken and things not done the way it should, more than 90 percent of home grown local telecoms operators will probably die in the next 5 years and that will be terrible for the country.

“From the way the industry is structured now, the bigger operators are suffocating the smaller ones.

“The industry is divided into three tiers. Big Network operators occupy Tier 1, that is where you have MTN, Glo, Airtel and 9Mobile. Tier 2 is where you have Operators like Starcomms, Multilinks Visafone and the likes; and Tier 3 takes care of small operators such as Internet service providers, Data access service providers, Swift telephone networks, rainbow net, among others.

“Already, tier 2 is extinct and none of the ones in Tier 3 have been able to grow to become tier 2 because they are also dying.

“Once they all die, we will be left with oligopoly, where the few big operators, mostly originally foreign owned and controlled companies will dominate the market to the detriment of the country.

“For instance, there is determination of International Termination Rate made by NCC last year December. All of a sudden, the bigger operators are interpreting the Determination to mean that the smaller operators must pay them in dollars for even the down stream portion of the international traffic.

“Meanwhile, such is an illegality and a contravention of the provisions Section 15 and 20 of the Central Bank of Nigeria Act. Section 20 of the CBN Act expressly criminalising demand.

“Due to this, small operators are being disconnected by big operators for flimsy reasons without the notice of the NCC.” He said.

He urged the Ministry of Communications and Digital Economy and the NCC to come up with policy restrictions and regulatory steps respectively.
Oke proposed asymmetric regulations whereby the Commission controls the big operators more so that their weights won’t crush smaller operators.

Ayoola, who hailed the Commission’s dominance and significant market power, asked that they should be more proactive conducting timely investigations on big operators whenever they disconnect smaller operators.