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Monday, January 09, 2006

Odufuwa warns on unified licensing regime

Chief Executive of a Lagos-based eShekels Limited, Mr. Fola Odufuwa, has cautioned that the nation and all stakeholders in the Information and Communications Technology (ICT) industry must ensure that the proposed unified licensing regime did not turn into a bad case study.
Unified licensing, which is the outcome of the post-exclusivity of the five-year Global System for Mobile communications (GSM) license was initially proposed by the industry regulatory, the Nigerian Communications Commission (NCC) since late 2004, is due to take off in March, this year.
Although a comprehensive modus of its implementation like the module of consolidation among the existing operators is yet to be made public, such as the number of services to be offered by the potential licensees given the avalanche of operators licensed in the past who are yet to optimize these licenses.
Speaking to Business Champion recently, chief executive of eShekels Limited, a technology industry specialized market research organization, Mr. Odufuwa, said that caution must be applied in implementing the unified licensing regime.
Apart from noting that this regime is yet to be fully introduced anywhere, Mr. Odufuwa said that if applied with caution and eventually becomes successful, the Nigeria experiment would be on the verge of making another history, just like it made with the auctioning of the GSM licenses in 2001.
He said that in essence, it’s success would boost the Foreign Direct Investment (FDI) as more investors would take interest in the nation’s large number of operators for stakes especially on the growing ones.
Though he described the proposal as a good development, but one that requires what he called ‘deep strategic thinking,’ because there would be a lot of fallouts.
He wondered if there would be any given number of operators expected to come out of the proposition, which definitely means unification of entities by the existing operators and increased competition.
"What would happen if an operator has a unified license, is it going to be required or mandated to offer the entire spectrum of services across the entire breathe of the country" he asked.
Additionally, he wondered if there would be regional players, city-wide players and village-wide players, would all of them have equal licensing power.
He also said that the relevant incentives for those who are ready to offer gamut of services should be made known to the industry in order to help decision makers, especially when previous licenses have not been optimized.
"So it requires a lot of deep strategic thinking, otherwise, what you would find if not carefully done is going to create a market distortion again and then the consolidation that is hopeful would now be in abyss," he declared.
Though optimistic about the regime, Mr. Odufuwa noted if it is well done, "it could actually lead to the consolidation of the industry and make both big and small operators co-habit without any problems."
This, he pointed out could also force reduction of the significant dominator currently existing, like NITEL, because "now you would have a level playing field for everybody, this would usher in full competition and growth".
Stressing it could also enhance the bargaining power of operators and even of consumers as well.
For the operators, Mr. Odufuwa noted that with their suppliers would have better bargain as well as for the consumers.

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