" ITREALMS: Foreign vendors issue disconnection notice to Nigerian telcos

Tuesday, July 04, 2017

Foreign vendors issue disconnection notice to Nigerian telcos

The Association of Licensed Telecommunication Operators of Nigeria (ALTON) has revealed that some foreign vendors of telecommunications equipment have issued “Notice of Disconnection” to its members, over their inability to meet with the current unfavourable credit terms, reports ITRealms.

Chairman, ALTON, Engr. Gbenga Adebayo, made this disclosure to ITRealms at the recent breakfast session with members of the Nigeria Information Technology Reporters Association (NITRA) in Alausa-Ikeja, Lagos.

He listed some three adverse impacts to telecom sector due to lack of exemption of the sector from Foreign Exchange (FX) priority list by the Central Bank of Nigeria (CBN).
These, he said, include an increased operating cost, unfavourable credit terms and  delayed implementation of network enhancement as well as improvement initiatives.

On increased operating cost, he noted that in the absence of local substitutes for its plant and machinery, the telecommunications service providers are constrained to source FX from interbank market at higher rates compared to other sectors such as manufacturing, aviation and agriculture accorded priority in FX allocation at reduced rates by the Central Bank of Nigeria (CBN).

“Owing to the prevailing economic situation in the country, ALTON members cannot transfer the increased cost burden to the consumers, thereby contracting profitability and ability to make further investment to drive growth in the industry,” he said.

The ALTON boss also pointed out that the unfavourable credit terms has made it very challenging for operators to honour their obligations to foreign vendors as at when due.  This has occasioned delayed payment to equipment suppliers and other foreign vendors, who have now resorted to imposing unfavourable payment terms on telecommunications service providers in Nigeria. 

“Some of the Foreign Vendors had issued Notice of Disconnection of service, which could disrupt service availability with attendant impact on customers’ experience,” he revealed.

ALTON noted with dismay that delayed implementation of network enhancement and improvement initiatives, recalling that ALTON members made commitments intended to ensure the implementation of National Quality of Service (QoS) Fixing Project.

This, he said, is a coordinated network investment plan supervised by the Nigerian Communications Commission at designated locations nationwide over a period of time by the Telecommunications Service Providers to ensure improved QoS. 

“The continuity of this initiative is dependent on obtaining FX to import equipment required to carry out the intended national QoS Fixing Project.  ALTON is of the view that if proactive measures are not taken to ensure easy access to FX, the National QoS Fixing Project is likely to be adversely impacted to the detriment of the citizenry and economy.

ALTON requested CBN to include Telecommunications Equipment and Invisibles among the list of items/Sectors to be allocated from the 60 per cent FX availability by the Banks.

“This is to ensure the continued provision of world-class telecommunications services to the consumers,” he said.

Sherif Ayilara/GEE

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