Social Infrastructure for Social Infrastructure for National Development in National Development in NigeriaNigeria

ByByGary CoatesGary Coates

November 15, 2005November 15, 2005

22

Contents:Contents:Introduction Introduction

ScorecardScorecard

Regulatory Challenges in the Telecoms Regulatory Challenges in the Telecoms IndustryIndustry

NCC Strategic FrameworkNCC Strategic Framework

Strategic Policy Initiatives for 2005 & BeyondStrategic Policy Initiatives for 2005 & Beyond

NCC ProjectionsNCC Projections

ConclusionsConclusions

33

44

IntroductionIntroduction

In line with global trends of liberalization in the In line with global trends of liberalization in the 1990’s, the Federal Government promulgated 1990’s, the Federal Government promulgated established the Commission as the arrow head for established the Commission as the arrow head for the liberalization and deregulation of the telecom the liberalization and deregulation of the telecom sector.sector.

This liberalization thrust of the decree was further This liberalization thrust of the decree was further strengthened by the National Telecoms policy strengthened by the National Telecoms policy (NTP) to remove provisions that inhibit full (NTP) to remove provisions that inhibit full competition and fully liberalize the sector.competition and fully liberalize the sector.

The above paved way for the licensing of several The above paved way for the licensing of several operator in the various markets within the Telecom operator in the various markets within the Telecom Industry.Industry.

Prominent amongst these licenses are the GSM Prominent amongst these licenses are the GSM and the Second National Operator.and the Second National Operator.

55

Introduction Cont’dIntroduction Cont’d The Industry has witness tremendous growth in The Industry has witness tremendous growth in

the last three years.the last three years. This growth and the rapid deployment of This growth and the rapid deployment of

services has presented several challenges for services has presented several challenges for NCC and the industry.NCC and the industry.

NCC Strategic Management Plan aims to focus NCC Strategic Management Plan aims to focus on meeting these challenges and ensure on meeting these challenges and ensure network efficiency, and to ensure that emerging network efficiency, and to ensure that emerging issues are promptly taken into the mainstream issues are promptly taken into the mainstream of regulatory activities.of regulatory activities.

To further strengthen the Commission the To further strengthen the Commission the Nigerian Communications Act, 2003 was Nigerian Communications Act, 2003 was promulgated.promulgated.

66

Strategic thrust for 2004 -2006 is Strategic thrust for 2004 -2006 is “Attaining Efficiency in the Telecoms “Attaining Efficiency in the Telecoms Industry”.Industry”.

Emphasis will be placed on efficiency Emphasis will be placed on efficiency in telecom service delivery and in telecom service delivery and improved quality geared towards improved quality geared towards delighting the ‘Consumers’.delighting the ‘Consumers’.

The 2005 sub-theme is Consumer The 2005 sub-theme is Consumer Satisfaction as a pathway to Growth.Satisfaction as a pathway to Growth.

77

88

Scorecard Scorecard

SERVICE CATEGORY1999 2000 2001 2002 2003 2004 Mar. 2005

National Carriers 1 1 1 2 2 2 2Mobile (GSM) Telephony 1 1 3 3 4 4 4Fixed Telephony 9 16 16 17 20** 24** 24**VSAT Networks N/A N/A N/A N/A 51 52* 52* Internet Services 18 30 30 35 35 35* 35*

Number of Active Operators and Service Providers in Nigeria

* Confirmed, ** Including 3 Fixed Wireless Access (FWA) Operators,

NUMBER OF OPERATORS & SERVICE PROVIDERS

99

Scorecard Cont’dScorecard Cont’d

1999 2000 2001 2002 2003 2004* Jan. 2005Fixed: NITEL 450,172 497,019 540,662 555,466 555,466 524,596 525,000* PTOs 23,144 56,355 59,659 146,534 333,068 515,173 568,925**Sub-Total 473,316 553,374 600,321 702,000 888,534 1,039,769 1,093,925Mobile 35,000 35,000 266,461 1,569,050 3,149,472 8,500,000 9,950,000Total 508,316 588,374 866,782 2,271,050 4,038,006 9,539,769 11,043,925Teledensity 0.42 0.49 0.72 1.89 3.36 7.77 9.2

* Estimates, ** Includes estimates for some companies.

Growth in Fixed and Mobile Telephone lines, and Teledensity, in Nigeria

SERVICE CATEGORYNUMBER OF SUBSCRIBERS

1010

Scorecard Cont’d Scorecard Cont’d

Private Investment in Telecom in Nigeria

Year 1999 2000 2001 2002 Jun 2003 Dec 2003 Sept 2004Amount (USD million) 50 150 1200 2100 2550 4000 6080

Growth in Telecom Investment in Nigeria.

1111

Scorecard Cont’dScorecard Cont’d

48 48

41 41

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,00012,00013,00014,00015,00016,000

2001 2002 2003 Oct-04Period

Co

nn

ect

Ch

arg

e (

=N

=)

35

36

37

38

39

40

41

42

43

44

45

46

47

48

Air

tim

e/M

in (

=N

=)

Airtime/Min

Connection Charge

Trend in connection charges and tariffs in the mobile sector.

1212

1313

REGULATORY CHALLENGESREGULATORY CHALLENGES Appropriate regulations for the rapidly Appropriate regulations for the rapidly

expanding industry.expanding industry. Need to consolidate on improvement on Need to consolidate on improvement on

infrastructure development.infrastructure development. Managing Competition.Managing Competition. Increasing consumer awareness and rise of Increasing consumer awareness and rise of

consumerism.consumerism. Expansion of network coverage and Expansion of network coverage and

penetration evenly nation-wide through penetration evenly nation-wide through extension of services to underserved and extension of services to underserved and unserved areas.unserved areas.

Increasing demand for new services.Increasing demand for new services.

1414

Regulatory Challenges Continued…Regulatory Challenges Continued… Adequate information and data flow Adequate information and data flow Effective and timely regulatory decision Effective and timely regulatory decision

makingmaking Ensuring strict compliance through effective Ensuring strict compliance through effective

enforcement mechanisms.enforcement mechanisms. Optimizing use of scarce resources.Optimizing use of scarce resources. Need to encourage research and Need to encourage research and

development and local manufacture of development and local manufacture of telecoms equipments.telecoms equipments.

Promoting more investments.Promoting more investments. Technology advancement and convergence Technology advancement and convergence

issues.issues.

1515

Regulatory Challenges Regulatory Challenges Continued….Continued….

Need to develop professional Need to develop professional expertise in the various specialized expertise in the various specialized functions in the Industry.functions in the Industry.

1616

1717

The SMP is structured to The SMP is structured to address these challenges.address these challenges.

The thrust for 2005 The thrust for 2005 comprises six (6) broad comprises six (6) broad goals and sixteen (16) goals and sixteen (16) objectives and one hundred objectives and one hundred and twenty two (122) and twenty two (122) strategies.strategies.

1818

GOAL ONEGOAL ONEPromote market entry, competition and Promote market entry, competition and universal accessuniversal access

Ensure smooth market entry and promote Ensure smooth market entry and promote competition in the telecommunication competition in the telecommunication industry.industry.

Ensure the provision of reliable, affordable Ensure the provision of reliable, affordable and efficient telecommunication services.and efficient telecommunication services.

Support the development of institutional Support the development of institutional framework and mechanisms to achieve the framework and mechanisms to achieve the universal access.universal access.

Ensure rapid deployment of services to the Ensure rapid deployment of services to the rural and undeserved areas.rural and undeserved areas.

1919

GOAL TWOGOAL TWOENSURE EFFECTIVE LEGAL ENSURE EFFECTIVE LEGAL FRAMEWORK FOR THE INDUSTRY AND FRAMEWORK FOR THE INDUSTRY AND ENHANCE ENFORCEMENT ACTIVITIES ENHANCE ENFORCEMENT ACTIVITIES AND CONSUMER PROTECTIONAND CONSUMER PROTECTION

Deploy an effective enforcement system Deploy an effective enforcement system for compliance with license obligations, for compliance with license obligations, dispute resolution mechanism for dispute resolution mechanism for licensed operators and service providers.licensed operators and service providers. Deploy an effective enforcement system Deploy an effective enforcement system for compliance with technical and for compliance with technical and operational standards.operational standards. Establish effective consumer education Establish effective consumer education and protection mechanisms.and protection mechanisms. Provide regulations for the Provide regulations for the telecommunications industry.telecommunications industry.

2020

GOAL THREEGOAL THREE

ENSURE OPTIMAL USE OF ENSURE OPTIMAL USE OF SPECTRUMSPECTRUM

Increase efficiency of spectrum use and Increase efficiency of spectrum use and management.management.

Ensure proper planning and monitoring Ensure proper planning and monitoring of radio frequency spectrum.of radio frequency spectrum.

2121

GOAL FOURGOAL FOURPROVISION AND MONITORING OF PROVISION AND MONITORING OF STANDARDS FOR THE STANDARDS FOR THE TELECOMMUNICATIONS TELECOMMUNICATIONS INDUSTRYINDUSTRY

Ensure the provision of the Ensure the provision of the telecommunications services to telecommunications services to internationally acceptable standards internationally acceptable standards throughout Nigeria.throughout Nigeria. Ensure efficient network management Ensure efficient network management and optimisation.and optimisation.

2222

GOAL FIVEGOAL FIVEPUBLIC, PRIVATE AND PUBLIC, PRIVATE AND INTERNATIONAL CO-OPERATIONINTERNATIONAL CO-OPERATION

Disseminate information on activities of Disseminate information on activities of the Commission and enhance its public the Commission and enhance its public image.image.

Foster and sustain national, regional and Foster and sustain national, regional and global relationships towards telecom global relationships towards telecom development.development.

2323

GOAL SIXGOAL SIXESTABLISHMENT OF AN ESTABLISHMENT OF AN EFFECTIVE AND EFFICIENT EFFECTIVE AND EFFICIENT ORGANISATIONAL FRAMEWORKORGANISATIONAL FRAMEWORK

Strengthen the Commission to effectively Strengthen the Commission to effectively carry out its functions.carry out its functions. Enhance the efficiency of the Enhance the efficiency of the Commission’s processes.Commission’s processes.

2424

2525

COMPETITION IN TELECOMS COMPETITION IN TELECOMS INDUSTRYINDUSTRY

RELIABLE AND AFFORDABLE RELIABLE AND AFFORDABLE SERVICESSERVICES

INSTITUTIONAL FRAMEWORK FOR INSTITUTIONAL FRAMEWORK FOR UNIVERSAL ACCESSUNIVERSAL ACCESS

UNIVERSAL ACCESS PROVISIONUNIVERSAL ACCESS PROVISION

TELECOMS REGULATIONSTELECOMS REGULATIONS

SPECTRUM USE AND MANAGEMENTSPECTRUM USE AND MANAGEMENT

TELECOMS STANDARDSTELECOMS STANDARDS

2626

2727

Maintain a level playing field to ensure transparency Maintain a level playing field to ensure transparency and fairness in regulatory processes to elicit and fairness in regulatory processes to elicit confidence from operators and other stakeholders confidence from operators and other stakeholders alike.alike.

Simplify the process of licensing within the Simplify the process of licensing within the Commission and the removal of cumbersome and Commission and the removal of cumbersome and onerous regulations.onerous regulations.

Promote the provision of new license categories and Promote the provision of new license categories and services, which will provide a greater degree of choice services, which will provide a greater degree of choice for consumers and the opportunity for price for consumers and the opportunity for price reductions.reductions.

Encourage and promote entry of organizations into Encourage and promote entry of organizations into the telecoms sector with adequate technical and the telecoms sector with adequate technical and financial capability to accelerate the roll out of financial capability to accelerate the roll out of network infrastructure deemed vital to the network infrastructure deemed vital to the improvement of the Nation’s teledensity.improvement of the Nation’s teledensity.

2828

Encourage and promote rapid deployment of Encourage and promote rapid deployment of telecommunications infrastructure nationwide.telecommunications infrastructure nationwide.

Develop policies to promote the deployment of Develop policies to promote the deployment of advanced technologies, to increase the range of advanced technologies, to increase the range of services offered to consumers and deliver cost services offered to consumers and deliver cost benefits.benefits.

Prevent anti-competitive conduct by operators within Prevent anti-competitive conduct by operators within the retail and wholesale telecommunications markets the retail and wholesale telecommunications markets including, but not limited to, product pricing and including, but not limited to, product pricing and Interconnection Agreements.Interconnection Agreements.

Define the structure of the various market segments Define the structure of the various market segments within the industry to determine market power, within the industry to determine market power, market dominance and assess the level of market dominance and assess the level of competition within each market for effective competition within each market for effective regulatory efforts, and develop a competition policy regulatory efforts, and develop a competition policy for the industry.for the industry.

2929

3030

Promote the provision of quality telecom services to Promote the provision of quality telecom services to consumers through effective competition and compliance consumers through effective competition and compliance with internationally recognized standards.with internationally recognized standards.

Encourage the use of modern technologies that will enable Encourage the use of modern technologies that will enable improved quality and reduce cost thereby making services improved quality and reduce cost thereby making services cheaper and more reliable.cheaper and more reliable.

Conduct regular market monitoring and trend analysis.Conduct regular market monitoring and trend analysis.

Ensure affordable tariffs for service provision across a range Ensure affordable tariffs for service provision across a range of products and services.of products and services.

3131

3232

Support the creation of a Universal Support the creation of a Universal Service Provision Fund (USPF).Service Provision Fund (USPF).

Align existing licensing processes with Align existing licensing processes with Universal Access objectives and Universal Access objectives and requirements.requirements.

Establish a mechanism to involve Establish a mechanism to involve relevant Government, Private and relevant Government, Private and Rural Community organizations in Rural Community organizations in decision-making regarding Universal decision-making regarding Universal Access programs.Access programs.

3333

3434

Facilitate provision of telephony Facilitate provision of telephony service to all rural and service to all rural and underserved areas.underserved areas.

Develop appropriate regulations Develop appropriate regulations to ensure compliance with to ensure compliance with network roll out obligations.network roll out obligations.

Encourage use of technology Encourage use of technology specifically aimed at delivering specifically aimed at delivering cost and service benefits for rural cost and service benefits for rural applications. applications.

3535

3636

Provide licensed operators with clear Provide licensed operators with clear Rules, Regulations and Guidelines.Rules, Regulations and Guidelines.

Prepare and publish relevant Prepare and publish relevant Regulations.Regulations.

Monitor Global Trends in ICT to Monitor Global Trends in ICT to ensure Regulations conform with ensure Regulations conform with international best practice.international best practice.

Provide procedure for compliance Provide procedure for compliance with enabling law.with enabling law.

3737

3838

Provide sufficient clarity in the process and Provide sufficient clarity in the process and management of spectrum to be able to make management of spectrum to be able to make spectrum available for new services or emerging spectrum available for new services or emerging technologies when required.technologies when required.

Provide and maintain a practical and accurate Provide and maintain a practical and accurate spectrum plan for the telecommunications industry spectrum plan for the telecommunications industry and interested parties.and interested parties.

Improve the transparency of the frequency Improve the transparency of the frequency assignment processes through the publication of assignment processes through the publication of regular information, consultation with interested regular information, consultation with interested parties and the development of radio parties and the development of radio communication standards.communication standards.

3939

Encourage, and hence where appropriate, license Encourage, and hence where appropriate, license the use of technology that will engender more the use of technology that will engender more efficient use of spectrum.efficient use of spectrum.

Develop innovative licensing procedures which Develop innovative licensing procedures which result in less bureaucracy and minimal result in less bureaucracy and minimal interference in the process of spectrum interference in the process of spectrum assignment.assignment.

Encourage sharing and re-use of spectrum, reduce Encourage sharing and re-use of spectrum, reduce spectrum size allocation and create incentives for spectrum size allocation and create incentives for freeing up spectrum.freeing up spectrum.

4040

4141

Define and publish standards, both Define and publish standards, both technical and operational, for all technical and operational, for all telecommunication facilities and sites telecommunication facilities and sites throughout Nigeria.throughout Nigeria.

Resolve through negotiation or Resolve through negotiation or determination, as appropriate, technical determination, as appropriate, technical disputes between the operators and disputes between the operators and service providers.service providers.

Determine, through consultation with Determine, through consultation with industry and interested parties, an industry and interested parties, an Engineering Code of Practice for Engineering Code of Practice for compliance by all operators and service compliance by all operators and service providers.providers.

4242

4343

Quality training institutions to bridge skill gaps.Quality training institutions to bridge skill gaps.

Provision of state of the art laboratory, teaching and Provision of state of the art laboratory, teaching and research facilities in our educational sector.research facilities in our educational sector.

Total and comprehensive rehabilitation of the Power sector Total and comprehensive rehabilitation of the Power sector to encourage local manufacturing and reduce cost of to encourage local manufacturing and reduce cost of providing services.providing services.

Efficient and seamless interconnectivity of all systems and Efficient and seamless interconnectivity of all systems and networks throughout Nigeria.networks throughout Nigeria.

Need to have reliable statistics, data and records to facilitate Need to have reliable statistics, data and records to facilitate planning, monitoring and control.planning, monitoring and control.

Provision of adequate Security to safeguard investment in Provision of adequate Security to safeguard investment in the sector.the sector.

The industry requires special remuneration packages to be The industry requires special remuneration packages to be able to attract specialists especially in regulation.able to attract specialists especially in regulation.

4444

Need to encourage manufacturing of Need to encourage manufacturing of telecoms equipment through telecoms equipment through Government policies.Government policies.

Ensure that there is unified policy Ensure that there is unified policy framework for all Government agencies framework for all Government agencies involved in ICT delivery in the country.involved in ICT delivery in the country.

Encourage the rollout of backbone Encourage the rollout of backbone transmission facilities nationwide to transmission facilities nationwide to facilitate national connectivity by facilitate national connectivity by harmonizing the positions of all harmonizing the positions of all Government agencies involved in Government agencies involved in transmission development.transmission development.

4545

4646

The aim of our Strategic and Policy The aim of our Strategic and Policy Thrust for the next few years is to set a Thrust for the next few years is to set a ‘path’ that will allow NCC provide the ‘path’ that will allow NCC provide the required leadership to consolidate required leadership to consolidate achievements already made.achievements already made.

Strive for efficiency in the industry and Strive for efficiency in the industry and facilitate ‘innovation’ needed for a virile facilitate ‘innovation’ needed for a virile industry over the long term. industry over the long term.

Focus efforts will be geared toward Focus efforts will be geared toward ensuring that efficiency in the industry ensuring that efficiency in the industry translates into tangible benefits to the translates into tangible benefits to the “Consumers”, who will be the center “Consumers”, who will be the center piece of NCC’s regulatory activities.piece of NCC’s regulatory activities.

4747