BY BISI OLALEYE
In a bid to have significant role in the provision of services and supply of materials to the telecommunications industry, Nigerian Communications Commission (NCC) is canvassing for local content. According to the Executive Vice Chairman of the NCC, Dr. Eugene Juwah, active participation of local companies in direct contract delivery to telecoms players had become critical to developing the telecoms industry on a sustainable basis.
Delivering a paper at an ICT forum ,which was organised by the Association of Telecoms Companies of Nigeria in Lagos recently, the NCC boss said the Nigerian telecoms industry has come a long way in the last decade and as such, allowing indigenous companies to have a space for active participation will help in creating jobs as well as curbing annual capital flight in the industry.
Between 2001 and mid 2012, investment inflow into the nation’s telecoms industry has increased from $500, 000 to over $25 billion. Industry analysts have, however, lamented that while the investment into the sector has been astronomical, a larger percentage of the money, which should have remained in Nigerian economy, is being lost to capital flight, as most infrastructure contracts are awarded to foreign firms, which repatriate the money realised in executing the projects to their respective countries.
While, explaining his argument for local contents, Juwah, who noted that the industry had grown tremendously from about 400, 000 subscribers in 2001 to over 109 million active subscribers in October, 2012, said operators depended heavily on major network vendors such as Alcatel- Lucent, Ericsson, Qualcoms, Cisco and so on, for the provision of the critical infrastructure from switches, routers, base station controllers to base transceivers stations which require state-of-the-art technologies.
He said these aspects are provided by vendors with both the technological capacity and the economies of scale to compete on a global basis, noting that operators and any business for that matter will ordinarily choose vendors to provide them products and services on economic reasons and technical as well as operational capacity to deliver such products and services.
The NCC boss, however, argued that some of the supply and services decisions in an industry such as the telecommunications industry in Nigeria must not only be fair but must be seen to be fair. According to him, a situation where an operator issues services contracts to a vendor and the vendor goes ahead to, in some cases, fully sub-contract the services contract to local companies for implementation raises some pertinent questions. “Some reasons has been espoused for such practices though, chief amongst is the perceived organisational and coordination competence of the lead vendor as operators seek to reduce complexity introduced with managing multiple parties in project delivery.
“It is, however, crucial for local companies to have significant role in the provision of services and supply of materials to telecommunications industry if we must develop the telecoms industry in Nigeria on a sustainable basis over the long term, and provide more employment opportunities for Nigerians,” he said.
However, the NCC EVC maintained that before a holistic approach towards mainstreaming local content in Nigerian telecoms development cab be fully achieved, some critical issues needed to be critically examined.
These, he said, include the need to ascertain areas in the provision of services to the telecoms industry where local companies have the required competence to compete in; whether there are local companies that have the required organisational and coordination competence required for some services in the telecoms industry; and whether or not there are local companies with the economic capacity to deliver on such projects.
Other critical issues highlighted by Juwah towards driving local content in telecoms sector is whether the financial industry is fully supporting local companies with the economic means to provide contracted services; and whether local companies are consistently providing quality and timely services to agreed specifications each time and every time.
The EVC said it was important also to find out if local companies are being unfairly excluded from participating in the delivery of services within their capacity to the telecoms industry; and to determine if a local content policy in the telecommunications industry is required and the form it should take, all in an attempt to find a solution that is appropriate for the industry with the overall objective of creating opportunities for local companies.