" ITREALMS: Redenomination: Telecom service charge may rise – ALTON

Wednesday, August 22, 2007

Redenomination: Telecom service charge may rise – ALTON

The Federal Government (FG) and Central Bank of Nigeria (CBN) have been warned over the last Tuesday proposal by the CBN governor, Prof. Chukwuma Soludo, to redenominate the Naira, by the Association of License Telecommunications Operators of Nigeria (ALTON), saying it could lead to a rise in cost of delivering telecommunications services across the networks.

Sounding this note of warning, was the Chairman, ALTON, Mr. Gbenga Adebayo, while reacting to the proposal of CBN governor on redenomination of Naira by August 2008.

According to him, it may not be interesting times for the growing telecommunications industry, stressing that it could impact negatively on the cost of service delivery.

“At the end of the day, if care is not taken, it might impact on the cost of service delivery,” he warned.

This, on the other hand, would be translated to the end users of telecom services, the subscribers.

He recalled that telecom infrastructure in the country of date depends largely on foreign importation.

“We are not yet a manufacturing country, and if the value of our currency goes down in the international market, it will have its impact on the cost of service provision,” he observed.

The ALTON chairman also advised the government and the CBN to ensure they tread carefully to avoid retrogressive actions.

“We suggest that the government should tread softly on this matter. The economy have been relatively stable, and you ‘don’t rock a smooth sailing boat,” he said.

Equally commenting on the development, Chief executive, Telecom Answers Associates, Mr. Titi Omo-Ettu, said that he is excited on the proposal but would like to study it extensively before coming up with a position, wondering however, how Prof. Soludo intends to achieve that, more so when he seems not to have the backing of the federal government, hence the coming of the economic panel to review the plan.

FG, he pointed out, ought to have been consulted before making such a plan public.

Telecom lawyer, Mr. Damian Udeh, also demanded for more time to re-assess the proposal, but was quick to add that the bottom line is that what will change, will be the size of the money. “The zeros you put behind the figures,” he said.

While the Managing Director of Beta Computers Limited, Mr. Will Anyaegbunam, said the redenomination is commendable, he added that all Nigerians need to do is to remove the two decimal in every of the current denominations.

“The Naira exchanging for N1.25 to a Dollar with the rate adjustment by two decimal places leftwards is about the same rate presently at N125 to a dollar,” he declared.

He quoted the CBN governor, Prof. Soludo as assuring that the change is not expected to change the value.

Mr. Anyaegbunam said that for the Information and Communication Technology (ICT) industry specifically, this policy would hopefully encourage the movement to a cashless economy.

“As I will rather pay with plastic money than carry a sack of coins,” he declared, underscoring that with the expected emergence of the Naira as the de facto common currency in West Africa, at least, Nigerians should see increased demand for their products from neighbouring countries.

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