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The recent authorization by the Nigerian Communications Commission (NCC) for the partial disconnection of Globacom subscribers from the MTN network due to interconnect debt has sparked concerns, particularly regarding its potential adverse effects on indigenous telecoms enterprises.
The decision, while aimed at addressing the issue of unpaid interconnect debt between telecom operators, presents several risks that could disproportionately impact local or indigenous telecom companies.
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While there is a need for regulatory disposition that ensures operators keep to obligations to maintain the health of the sector, the NCC also carries a higher burden to promote and protect indigenous telecom companies. This means it has a supreme-obligation to tread cautiously on issues that could sway competition against local enterprises and ‘demoralises investors.’
Disruption of Market Dynamics
Indigenous telecom companies like Globacom have played a crucial role in Nigeria’s telecom sector, fostering competition and innovation. This local telecom company has the sole claim to instigating a revolutionary competition that forced other operators to lower the ‘cost of talk’ at a time when all the foreign players were selling the argument that ‘per second billing’ was impracticable.
Therefore, the partial disconnection could disrupt the established market dynamics. Globacom, as one of the major players, holds a significant share, and any disruption to its services might lead to imbalances in market competition.
Threat to Indigenous Telecoms’ Market Share
Globacom, being an indigenous telecom operator, has garnered a substantial subscriber base. The disconnection could prompt mass porting of its subscribers to other networks, predominantly the larger multinational ones. This potential migration poses a severe threat to the market share and stability of indigenous telecoms, altering the competitive landscape in favor of multinational corporations.
This frightening possibility raises the question of whether government owes commitment to foster the survivability of indigenous telecom companies.
Economic Implications
Indigenous telecom companies contribute significantly to the local economy by providing jobs, fostering technological advancements, and supporting local businesses. Any negative impact on these enterprises could have economic repercussions, affecting employment opportunities and technological innovation within Nigeria.
This sad development runs against the wisdom of the 2024 National Budget of the Federal Government of Nigeria anchored on pushing the frontier for “job creation, macro-economic stability, improved investment environment, human capital development, poverty reduction, and social security.”
Reduced Investor Confidence
The NCC’s decision could potentially diminish investor confidence in the local telecom sector. Uncertainties arising from regulatory actions, such as the partial disconnection, might deter both local and foreign investments. This decrease in confidence could impede the growth and development of indigenous telecom companies.
Consumer Discomfort and Service Disruption
For subscribers of Globacom, the partial disconnection might lead to service disruptions, inconvenience, and dissatisfaction. This situation could prompt subscribers to consider alternative networks, potentially favoring larger multinational companies over indigenous ones.
Search for Long-term Solutions
While addressing interconnect debt is crucial for the sustainability of the telecom industry, the NCC’s approach requires careful consideration of its potential repercussions on indigenous players. Collaborative efforts between regulatory bodies and telecom operators should prioritize finding long-term solutions that balance financial obligations with the sustainability and growth of local enterprises.
Everyone plus Globacom must meet obligation
The Nigerian telecom sector has witnessed substantial growth, partly due to the contributions of indigenous operators and the progressive application of rules by the regulator. However, regulatory measures like the NCC’s authorization for partial disconnection need to be evaluated comprehensively to avoid disproportionately affecting local players. Balancing financial imperatives with the need to sustain and promote indigenous telecoms’ growth and competitiveness remains pivotal for a healthy and thriving telecom ecosystem in Nigeria.
Equally important, Globacom has the primacy duty to meet its obligations like all other operators whether foreign or local. The Nigerian telecom sector is a mere unit of a global industry. Everyone deserves to thrive in it.
