Technology giant, CWG warms up for Stock Exchange

ITRealms:

Opinion: 

On November 15, 2013, Computer Warehouse Group Plc (CWG) shall be the first company to be listed on the Nigerian Stock Exchange following the launch of the new trading engine, X-Gen, which incidentally is the same engine that is used on the NASDAQ. The listing of the shares is expected to boost the market capitalisation of the NSE with about N14 billion, while CWG would be the highest capitalised security in the ICT sector of the exchange.

The NASDAQ and the NYSE have also recently witnessed a boom in Technology listings with Facebook, Google and LinkedIn. Twitter has also recently revealed her listing plans. This seems to be the golden age of technology companies, as the stocks have done outstandingly well post listing. For instance, Google’s shares have gained a whopping 773% post listing while LinkedIn and Facebook have gained 160% and 29% respectively (as at October 04, 2013). Twitter seems set to follow in this trend with quarterly revenues up 105% to $139m from a year ago.

Here in Nigeria, CWG’s story has not been different. With seed capital of about N160,000 in 1992, CWG received a valuation of N6.97billion in 2009 from Vetiva Capital for her private placement. The issue was oversubscribed; with Private Equity firm Aureos Capital LLC taking up a major chunk, defying the gloomy atmosphere of the global economic downturn at that time. The valuation resulted in an increase in invested capital of 4,400 times, meaning that an initial investment of $1000 in 1992 would have yielded a whopping $4.4m within just 20 years. 

This achievement put the company in the bracket of the one of the best global value creators. CWG seems to be on track to repeat this feat on her listing, at a target share price of N5.48, almost doubling her private placement price of N3.40 in 2009 albeit in a very difficult environment characterised by significant slowdown in global economic growth.

It is therefore not surprising that that the Ministers of Finance, Trade and Investment and Communication Technology recently joined hands with the CEO of the Nigerian Stock Exchange to aggressively canvas for more Technology listing towards achieving the goal of the NSE to reach a market capitalisation of $1trillion within a decade.

CWG’s Founder and Chief Executive Officer, Austin Okere confidently declares that “our best is yet to come”, amidst comment from sceptics that all previous Technology listings on the Nigerian Stock Exchange have lost significant value. Hear him; “the value of the stock is affected by performance and perception of potential. The stock also reacts negatively to swings in revenue, preferring predictability in forecasts”. He continues “CWG has over the years built a large proportion of her turnover into annuities from deploying her own Intellectual Property (IP), to enable financial inclusiveness in Mobility, such as the recently announced Yello Diamond Account, which will bring banking services to over 55 million Mobile phone subscribers, and the MTN XaaS product, which will provide Financial services in the cloud for the over 1000 Microfinance banks and their customers on a pay as you use basis”. The product rides on cloud computing to bring competitive advantage to relatively smaller banks which would otherwise have been disenfranchised. According to him about 12 of the large banks in Nigeria run on the Finacle Core banking Application, which CWG jointly promotes in West Africa with the application developers, Infosys of India, processing over 60% of all financial transaction in Nigeria and used by the likes of FBN, UBA, Stanbic IBTC, Fidelity and FCMB amongst others.

CWG has taken advantage of her early mover status in the surge in ICT outsourcing demands to provide the service for the largest telecommunication company and the largest Downstream Company in the Oil & Gas sector in Nigeria. This further assures annuity income that smoothes revenue swings and brings predictability to income. According to Austin, about 80% of the company’s revenue is from repeat business, and new customers are more likely to be from referrals.

CWG is a strong player in the ATM business, providing and supporting over 30% of the country’s ATM installed base in conjunction with Wincor-Nixdorf of Germany, global leaders in the field.

Being a skills intensive business, CWG has set up an Academy to train brilliant youngsters to boost her talent pool. Currently, the CWG Academy trains over 200 graduates per year in Nigeria and Ghana, and is set to start in Uganda by mid next year. The company currently employs over 650 people, of which about 80% are engineers, with extra certifications in Cisco, Oracle, IBM and other Original Equipment Manufacturing (OEM) platforms. The Company is ISO 9001:2008 certified across all her operations.

The stellar performance of the Company has been rewarded by her peers and regulators with such awards as Top 50 Technology Business Companies in West Africa, ICT Solutions Provider of the year, ICT Company of the year, and the CEO as ICT Personality of the year 2012.

CWG has garnered a track record over the years as one of the most admired companies in Africa. In 2009, the Columbia Business School in New York published a case study on the Company and appointed Austin Okere as an Entrepreneur in Residence (EIR), while in 2012, the Legatum Entrepreneurial Center of MIT Boston, published a video and written case study on the Computer Warehouse Group as well.

For the second year in a row, CWG was awarded the Most Outstanding Corporate Social Responsibility (CSR) Technology Company of the year in 2012. The company has continued to support her host communities by ingraining social responsibility as an integral part of her business model, with focus on the education sector.

In the quest to be the leading Pan African ICT Company, CWG has actualised her geographical expansion plans with operation in four African countries; Nigeria, Ghana, Uganda and Cameroon, and virtual operations in 17 other countries. The Company has 18 offices and support centres across Nigeria, including Lagos, Abuja and Port-Harcourt.

The company seems well set to achieve her vision of being the number one IT Utility enabler in Africa by 2015.

* Success Nmerife, Head, Marketing Communications and Corporate Affairs
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Pix: Okere, GMD of CWG explaining a point to Finance Minister, Dr. Ngozi Okonji-Iwala

Ireland: War on tobacco worthy, but must not be rushed

ITRealms:

Opinion:

IT was not so long ago that secondary school children were allowed to smoke in many of the more "advanced" schools around the country. Staff rooms were also often full of teachers puffing on pipes and cigarettes as pupils regularly entered and left.

Today, the idea of a 17-year-old taking a puff between classes seems as strange as quill pens or the regular floggings that were a feature of the Irish educational system for far too long. The world changes, and smokers have had to endure more change than most as their habit has moved from socially acceptable to pariah status.

The Government's latest plans to outlaw smoking anywhere in secondary school grounds and near creche facilities is another step in a long-term strategy to "de-normalise" smoking and ensure that fewer than one person in 20 smokes by 2025.

That is a noble objective, but like many others it is one to be pursued carefully.

The prohibition of alcohol in the United States during the 1920s did little more than cement the position of criminal gangs, and serves as a salutary warning. There is already plenty of evidence that high taxes in Ireland are a boon for crooks while also turning many otherwise law-abiding citizens into criminals.

There is also the question of equity. Many ordinary smokers deeply resent their outlaw status and insist, not without reason, that their behaviour is likely to be less lethal to others than speeding drivers or alcohol.

That is all true, but the truth is that most smokers wish they could kick the habit, and hundreds of thousands of smokers have done just that thanks to the policy of de-normalising smoking. The gradual escalation of this policy will undoubtedly save more people from premature death while also saving them money.

Health Minister James Reilly has had a mixed tenure in office, but he cannot be faulted for his commitment to fighting tobacco and the tobacco industry. He must now set himself measurable targets so he knows whether he really is on track with this grand ambition.

Additional reports by Irish Independent: 

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Telecom industry: The trouble with dominance operator status

By Tunde Akindele

In April, the Nigerian Communications Commission (NCC) announced the emergence of dominant players in the Nigerian telecommunications market. Given that Nigeria has enjoyed real time GSM service for only 12 years, that development brought cheering news that the sector had indeed grown so fast.

The pronouncement was the outcome of NCC’s Study of the Assessment of the Level of Competition in the Nigerian telecommunications industry. According to the regulatory agency, the primary objective of that exercise is to “ensure fair competition in all sectors of the Nigerian communications industry.”

In 2010, NCC had conducted a similar study. But none of the service providers could be considered a dominant player. But a repeat exercise in June 2012 came up with a verdict that two operators – MTN and Glo – are the leading lights.

The study considered six market segments namely Mobile Voice, Fixed Voice, Fixed Data, Mobile Data, Upstream Segment and Downstream Segment. Going by the study, there are no dominant operators yet in the fixed mobile, fixed data and downstream market segments.

With over 47.4 million subscribers (about 43.57 per cent market share) as at December 2012, MTN emerged as the dominant operator in the voice data category. A pioneer in the Nigerian GSM sub-sector, along with Airtel (known as Econet when GSM service was launched in Nigeria in 2001), MTN was also announced as joint dominant operator in the upstream segment. It shared that honour with Glo, which launched its services in 2003 and had about 24.1 million subscribers (about 22.15 per cent) as at December 2012.

In its report, NCC declared that there are concerns in the two market segments. For mobile voice, it states that the segment is not “effectively competitive.” Fundamentally, NCC expressed worry about the “wide differential (of about 300 per cent) between on-net and off net calls.” It goes further to warn that “this is indicative of the likely establishment of a calling hub for MTN subscribers.” This is what has raised concern for GSM subscribers.

                                     

Although the regulatory agency stated that the dominant operator in the mobile voice market should, among others requirements, collapse on-net and off-net retail tariffs immediately, that is yet to be done. According to MTN tariffs, its subscribers are encouraged to make calls within the networks. Take the MTN booster weekly prepaid charge. It offers MTN-to-MTN calls at 10 kobo per second, while subscribers are charged 150 per cent  more – 25 kobo per second – for calls to other networks. At 30 kobo per second for calls from the second minute till the rest of the day, MTN Super Saver off-net call rates are exploitative. There is a huge difference of 200 per cent as it charged 10 kobo per second for on-net calls.

Other operators appear to have made life easier for their subscribers when making calls outside their networks. For Glo, its Talk-Free pre-paid package, on-net calls cost 15 kobo per second and 18 kobo per second for off-net calls. SMS charges are the same N4 irrespective of whether the message is sent to within or outside the network. On Glo Hi-Flier and G-BAM Hi 5ive, subscribers enjoy same 18 kobo per second charge to any network within Nigeria. But Glo is also guilty of exploitation as it charged 10 kobo per second for on-line calls on Glo Gista but 30 kobo per second for off-net calls, while Glo 1derful rates for voice calls are 15 kobo per second for on-net calls and 25 kobo off-net.

Airtel has 2good Classic and Airtel Club 10, among other packages. For the former, voice calls have a flat rate of 18 kobo per second for calls to all national destinations, irrespective of the network. Airtel Club 10 requires subscribers to register 10 Airtel lines of family, friends or associates which would then enable calls to be made at 8.34 kobo per second. Calls to other Airtel numbers on this package cost 20 kobo per second on-net and 30 kobo per second off-net.

Etisalat has Easy starter, among its several packages. Calls to all networks cost 50 kobo per second, while Homezone calls are charged at 40 kobo per second whether on-net or off-net. On Easycliq, calls within the network at peak period cost 40 kobo per second and a minimal increase to 50 kobo per second for off-net calls.

                                           

Tunde Agbabiaka, a consumer rights advocate, appeals to NCC to ensure that the benefits of the dominant operator declaration are accruable to the subscriber. “The regulator must not encourage or be soon to be encouraging the dominant players to stifle the other network operators. That is dangerous for the market that has become vibrant as a result of competition among the operators,” he said.

Having commenced the Dominant Operator policy since May 1, the NCC is expected to have ensured compliance with the new regime, particularly in the area of pricing. In his recent announcement, NCC’s Director of Public Affairs, Mr Tony Ojobo assured that the regulatory agency would deploy all necessary procedures to ensure that both companies did not use their dominant positions in the industry to stifle competition. NCC said it had, therefore, put measures in place to correct current anti-competitive behaviours being practised by both dominant operators. In his words, “dominance, in itself, is not negative because it is an indication of the effectiveness, resourcefulness and strategic decisions of the operator. However, the conduct of the operator determines how its dominance would be perceived, particularly if that conduct is likely to substantially lessen competition and distort the market.”

As it is, being the dominant operator in the mobile voice market segment, MTN has devised a strategy to compel Nigerian subscribers to either migrate to its network or acquire new MTN lines. The large disparity between on-net and off-net calls also appeared to be a strategy to discourage MTN subscribers from making calls to other operators.

According to consumer rights advocates, there is cause for concern in this game of might as the subscribers would be the ultimate loser. Nigerians haven’t forgotten how they had to queue all day to make calls at NITEL offices and how they were reminded by their own Communications Minister that telephone service was not for the poor. Nigeria must not be allowed to descend to that better-forgotten past.

It is feared that if the call rates disparity is not quickly checked by the regulatory agency, the smaller operators might be discouraged from investing in the networks.

Unless NCC checks the excesses of the dominant operators, the regime of monopoly that stunted the growth of the sector before the GSM revolution commenced in 2001 may just well return.

*Tunde Akindele contributed this piece from Lagos.

 

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What would a world with no legal tobacco industry really look like, asks BAT

As the we marked the World No Tobacco Day 2013, the British American Tobacco (BAT) asks in this opinion contribution, “What would a world with no legal tobacco industry really look like?” Excerpt:

On World No Tobacco Day 2013, British American Tobacco has issued a series of images to illustrate what it believes the world would look like if the legal tobacco industry was forced out of existence. 

Kingsley Wheaton, British American Tobacco’s Group Head of Corporate and Regulatory Affairs, warned: “The reality is that people will continue to smoke. But instead of buying legal taxed cigarettes, made by legitimate tobacco companies and sold by reputable retailers, they’ll turn to black market sources to get what they want.

“The tobacco industry is highly regulated, sells a legal product and we have a legitimate business. We conduct our business in a professional and responsible way, abiding by the laws in all the countries we operate in, often going above and beyond our legal obligations.

“Unfortunately the same can’t be said for the sophisticated network of criminals ready and waiting to step-in and take over if the legitimate tobacco industry didn’t exist.”

The global black market for tobacco accounted for 660 billion (Framework Convention Alliance) cigarette sales in 2012, making it roughly equivalent in volume to the world’s third largest multinational tobacco company. It is not a victimless crime. Illegal tobacco is sold by well-organised criminal gangs, some of whom have recognised links to terrorism.

Mr Wheaton continued: “These people don’t abide by the law or follow government regulation, they don’t pay taxes, they don’t care what’s in their products and they happily sell to minors.

“If we didn’t exist to supply tobacco products legally, traffickers would fill the vacuum and this cannot be the outcome society wants.”

British American Tobacco makes a long term commitment to sustainability; strives to bring reduced harm products to market; continues to fight the illegal tobacco trade; generates excise revenue; and provides employment and enhanced livelihoods to hundreds of thousands of employees and suppliers. However, a world with no legitimate tobacco industry would see an end to:

·         Significant investment in research and development of reduced-risk tobacco products: There would be no incentive for criminals to start doing this. In 2012 British American Tobacco alone invested £171m in our research and development activities – part of our responsibility to working towards reducing the health risks associated with our products.

·         Responsible product marketing: We are clear that children are not and will never be our audience. Our marketing is aimed at informed adult smokers who are aware of the health risks associated with tobacco use. But the same can’t be said for the criminals who are already actively selling tobacco products outside schools, newsagents and playgrounds. Black market cigarettes are also cheaper, making them more accessible to children at pocket money prices.

·         Industry support to tackle tobacco trafficking and associated criminality: We work closely with governments and law enforcement agencies to tackle illegal tobacco. Europol, Interpol and the FBI have stated that among those who traffic illegal tobacco some also deal in money laundering, drugs, human trafficking and fund terrorist organisations. In west Africa we collaborate with various government agencies including custom agencies, consumer protection agencies and the Joint Port Control Unit (JPCU) in tackling illicit trade in tobacco.

·         Product quality and safety:  It’s a worrying fact that illegal cigarettes have been found to contain dead insects and animal excrement.  We work tirelessly to manage the integrity of our entire supply chain from the seed that’s put in the ground through to the packets of our products sold on the shelves.  

·         $200billion per year in tax: That’s the figure generated in tobacco taxes globally each year, more than seven times the profit of the global industry. In West Africa alone, the tobacco industry has generated more than $187million for governments, through income tax, excise and VAT on tobacco products in 2012.

·         Fair treatment and prices for farmers: It’s very hard and dangerous for a farmer from a developing country to negotiate prices with criminals. British American Tobacco offers contracts to the 140,000 farmers we have direct relationships with, helping to provide consistent revenue and fair prices. We also provide advice regarding sustainable agricultural practices and crop rotation.

·         Millions of employees would lose their jobs and have their livelihoods impacted: We create jobs and support business in West Africa through our own workforce and through entrepreneurs and employees involved in our supply chain. Our development of the industry has led to economic opportunities for hundreds of thousands of West Africans; from the workforce of our distributors, wholesalers  and retailers, to suppliers  of materials such as tobacco leaf farmers, and providers of services such as haulage.

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How to Reward Bad Behaviour in the Capital Market - Olu Akanmu

Olu Akanmu, courtesy FinancialNigeria

It is important to lend additional voice and question the rationale behind the federal government N22.6 billion bail-out of some capital market operators. It is tantamount to rewarding bad behavior and excessive risk-taking at public expense. For the stock broking firms that will benefit from this largesse, if their investments have been profitable and they made a kill in the capital market, they would not have shared their profit with the public. The action of government is therefore tantamount to endorsing the privatization of profits and the socialization of losses if you have the lobby and the political connection to dumb your losses on the Nigerian people. By setting this precedent, the government has further ossified the moral hazard problem in our financial system. If an investor taking an investment risk knows that he can appropriate his gains but can pass his losses to another party, he will take excessive unreasonable risk as he has nothing to lose.

This moral hazard problem was at the heart of the misbehaviour of investment bankers in the recent global financial crisis, when they could made huge bonuses if their bets worked out but pass the loss to shareholders if it didn’t. This coupled with the implicit guarantee of their risk by the public especially if they were “too big to fail, essentially a public subsidy of their risk further compounded their bad behaviour. They created a tower of complex financial instruments that had little bearing to their underlying assets, played roulette and casino at public expense, made initial huge gains which they pocketed until their financial derivative instruments fell like a pack of cards.

Where these investment banking businesses shared a common capital base with retail banking as one organic financial institution, essentially leveraging public deposits in their banks to trade, they created assets that wiped off the bank’s capital and public retail deposits in their institutions. Where they were big banks, sometimes with a century of public retail deposits, the financial system was put a systemic risk of collapse and the state have had to intervene to bail them out largely to protect public deposits. This experience has fuelled calls for the full organic separation of investment and retail banking in the financial system. It is difficult to understand how this logic of bail out applies to the stock brokers who will enjoy N23 billion government largesse. A public bail out of a financial institution is justified only if they pose a systemic risk to the financial system should they fail. A systemic risk is the risk that the entire financial system will fail and collapse and it is different from the risk of financial failure of an individual or group within the financial system. The first question to ask is whether the failure of the selected stock broking firms being offered this government largesse can pull down the entire financial system or pose a systemic risk. Certainly not! These stock broking firms are not banks and their size relative to the whole financial ecosystem poses no fundamental systemic risk. What then is the rationale for the bail out?

Two fundamental conditions must exist for the public bail out of financial institutions. They must either be either be “too big to fail, the TBTF test or must be “too interconnected to fail”, the TICTF test. The TCITF test measures whether a group of institutions represent critical connected dependencies with no existing market alternative in size and function such that their failure will pull down the financial system. The   public bail out of a financial institution or a group of financial institutions must pass these two tests to justify the test of a systemic risk. It is difficult to see how the group of stock brokers who will enjoy these N23b public largesse could pass the “too big to fail” or the “too interconnected to fail” test. Their collective size does not pose significant systemic risk to the financial system. In the last three years, since these firms have had to deal with their margin loan challenges, the financial system has carried on. The capital market measured by the Nigeria Stock Exchange All Share Index has witnessed a year to date gain of more than 25 percent. This is because there are alternative market transaction agents whose collective size moderate any potential “too interconnected to fail” effect of the stock broking firms being bailed-out by government. Whither then is the logic of government action?

Capital market operators specifically stock broking firms operators are no banks. They are capital market transaction agents. They do not warehouse public assets or owe public liability like the banks that hold public deposits that could create a collapse of the financial system if a critical number of them fail. The stock asset that the public buy is not warehoused by the stockbroker but by the public themselves directly and the company from whom the stock was bought with a clearing system maintained by the independent Central Security Clearing System (CSCS). Stock sales are transactions between the company, the stock seller and the stock buyer with the stockbroker acting as intermediary, a broker and a transaction agent. It is the same relationship as that of a real estate agent who collects a fee brokering a deal between a house seller and a house buyer.

The real estate agent just like the stock broker should ordinarily not warehouse housing-stock unless he decides to use his market knowledge for additional private gain and become an investor, acquiring his own housing stock. If we stretch the analogy further, would it be right to use state fund to bail out or forebear the loans of a group of real estate agents who took a bank loans to buy houses and kept, hoping to make a kill when the house stock appreciates, and unfortunately house prices fell?  If the state does that, should the same logic and largesse not be extended to every citizen investor who bought housing stock when house prices fell? Therefore apart from rewarding bad behaviour, the action of government also raises public equity and fairness issues.  For the ordinary retail investor who also lost money on the capital market like the stock broking firms who took margin loans, where and what will be his own bail out or loan forbearance? What is good for the goose must also be good for the gander.

There have been attempts to justify the bail out of the stock broking firms as a special intervention in the capital market as it has been done recently in aviation and agriculture. Special sector intervention funds in Nigeria have largely not delivered tangible results as they work against market logic. The art of giving public funds to firms at below market rate, below its true market price distorts market mechanisms and leads to scarce resources being allocated to firms that will not best utilize them. Have we seen yet the tangible and visible gains of the recent special intervention funds in agriculture and aviation?  Such intervention funds have largely festered a regime of crony capitalism with all its attendant ills, where you get access to funds below market rate if you are connected to government and can even divert them to other more profitable sectors outside the intervention fund.  The market punishment of bad investment decisions, a return of losses for poor risk decisions and vice versa as gains for good investment risk decisions is critical to the effective functioning of markets.  Special intervention funds where there are no proven market failures, where it cannot be proven that markets lack the mechanism to self-correct and cleanse itself in its organic cycle of bulls and bear that ensure that resources are efficiently allocated to those who will best utilize them, can only but lead to more imperfect market outcomes.

Government has done very well by intervening and bailing out the banks whose failure truly posed a systemic risk to the financial system. It has however overreached itself in the N23 billion bail-out of selected stock broking firms. The logic and rationale of its decision fail public interest, fairness and social equity tests. If the concern of government is about the liquidity of the capital market, it cannot be addressed by rewarding excessive risk behaviour that could further jeopardize the future health of the financial system. This bail out of selected stockbrokers by government cannot be morally and economically justified. It should therefore be seriously reconsidered.

Olu Akanmu, a company executive, publishes a blog on Strategy and Public Policy on http://olusfile.blogspot.com .
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NCC Report and Consumer Promo Ban

(Opinion)
Shortly before it imposed an indefinite ban on all GSM operators from running consumer promotions and lotteries on their networks, the Nigerian Communications Commission (NCC) had just conducted yet another quality of service check on the operators. This is in line with its mandate which empowers the regulatory agency to ensure that the licensees meet required standards from time-to-time.

What is however of concern to perceptive industry watchers is that the outcome of the survey did not seem to have influenced the decision of the agency in deciding on a blanket ban on promotions and lotteries which affected all operators, irrespective of their performance as discovered by NCC itself.

Known as the Nationwide Benchmark Drive Test, it was conducted by NCC and covered July to September, 2012 for the four major operators, namely MTN, Globacom, Airtel and Etisalat. The first of its kind, the test captured the Call Completion Rate, which encompasses the major network KPI (call drop and congestion). Service providers were ranked in Lagos and the six geo-political zones of southwest, southeast, south south, north central, northeast and northwest.

In the north central zone which produced the highest rating for all the operators, except Glo, Etisalat recorded 94 per cent, while Airtel followed closely with 92 per cent. MTN scored 84 per cent and Glo had 78 per cent.

Next is Lagos where Etisalat had 92 per cent, Airtel 88 per cent, Glo 86 per cent and MTN ended up with 82 per cent. In the northwest, it was Etisalat 90 per cent with Airtel 82 per cent, Glo 88 per cent and MTN 60 per cent.

Airtel led in the south south recording 88 per cent. The rest were: Etisalat 86 per cent, MTN 71 per cent and Glo 78 per cent. Airtel also led in the southwest with 88 per cent, followed by Etisalat which had 81per cent, while Glo scored 79 per cent and MTN 72 per cent.

Airted also led the way in the northeast with 78 per cent followed by Etisalat at 67 per cent, while MTN had 58 percent and Glo 53 per cent. The southeast produced the poorest result. Etisalat led with 85 per cent followed by Airtel at 75 percent. Glo recorded nearly 60 per cent, while MTN scored 53 per cent.

Overall, Etisalat was rated as the best service provider in Lagos, southeast, north central and Northwest. It came second in the southwest, south south and northeast. Airtel was the best operator in three regions – southwest, south south and northeast. It came second in Lagos, southeast, north central and northwest. MTN finished third in south south, north central and northeast; and fourth in the other zones – Lagos, southwest, southeast and northwest – where Glo came third, while Glo finished last where MTN was rated third.

From such a quality of service check, analysts had thought NCC would apply its own prescription in dealing with the subscribers’ headache. Rather, the agency chose to come down hard on all the operators. The indefinite ban on all promotions and lotteries by network operators has continued to generate divergent opinions.

Not a few subscribers believe that NCC should have taken the pains to sanction only those networks that have demonstrated lack of capacity to handle the increased traffic on the platforms as a result of the consumer promotions.

Mr Wale Thomas, a marketing communications consultant, said that the regulatory agency behaves like most establishments in Nigeria that would always look for the easy way out of any challenge. “Why would NCC institute a check on the network and refuse to implement the result of its own findings in dealing with culprits?”, he wondered. “The agency should have imposed the ban on networks that have failed to meet minimal standards rather than sweep all of them along.”

In the opinion of Mr Moses Akapo, another consumer who operates a mobile phone dealership at the Computer Village in Ikeja, Lagos, the NCC should encourage the spirit of competition among the network operators, which would ultimately be to the benefits of the consumer. “If one or two network operators are found wanting and the NCC choose to impose the same penalty on all the licensees, it would be encouraging mediocrity rather than promoting meritocracy,” he said.

In a recent interaction with journalists, the Association of Licensed Telecoms Operators of Nigeria (ALTON), pointed out that issue of network congestion cannot be blamed on consumer promotions and lotteries essentially. According to Mr Gbenga Adebayo, ALTON president, the major causes of poor service quality across networks could be attributed to natural and man-made disasters. He explained that the natural disaster of flooding in some southern parts of the country and the spontaneous attacks on telecoms facilities in some northern parts of the country by gunmen had contributed largely to service disruption.

“The impacts of the attacks had since limited the ability of millions of Nigerian subscribers to access telecommunications services, because the incidents affected over 250 telecoms sites that lost connection and many suffered significant damage beyond repairs,” Adebayo said.

He further said that the unprecedented flood in some parts of the country destroyed Base Transceiver Stations (BTS) along its path, leading to significant service disruption in the affected areas, with consequential impact on service availability in some other parts that were not affected by the flood. “Other than disruption to services, our members have lost equipment worth several billions of naira to the flood disaster across the country, as over additional 300 BTS sites were affected by the flood,” Adebayo said.

Announcing the ban on consumer promotions and lotteries on the networks on November 8, NCC said it would be in force “until such a time as may be determined by the commission.” It said that the affected telecoms operators included Globacom Limited, MTN, Intercellular Nigeria Plc, Visafone Communications Limited, Etisalat, Airtel and Multilinks Telecoms Limited.

*Moses  Adigun, a Lagos-based consumer rights activist contributed this article.


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