The Sun News

‘Reasons telecom companies need to consolidate’

…As NCC probes operators’ strength status

There are concerns in the Nigeriaan telecom industry on the financial and technical status of operators, especially with the exit of Emerging Markets Telecommunications Services (EMTS) investors from the Nigerian market.

Industry watchers are of the opinion that these operators may not be as strong as the way they portray themselves to be in order to deceive stakeholders. A good number of observers  believe that the telecoms Code of Corporate Governance should address the issue of portfolio investors who exit at will.

EMTS means – Emerging Markets Telecommunications Services

The stakeholders juxtaposed the industry with the banking sector shortly after the tenure of former Central Bank of Nigeria governors Charles Soludo; most Nigerians believed that the banking sector was strong but it was during the recapitalisation era that stakeholders’ witnessed smaller banks buying over the bigger ones.

Commenting, Mr. Sunday Dare, executive commissioner, stakeholder management, Nigerian Communications Commission (NCC), disclosed during the telecoms Code of Corporate Governance media session on Monday that not all operators were as strong as they should be and most of them were striving to survive the harsh business terrain. And that the code of corporate governance would allow foreign investors to repatriate their vested interest on a certain percentage.

He explained that the commission is set to scrutinise the financial and technical health of telecom operators and wouldn’t want to be taken unawares by any operator again.

“Annual reporting would now be made to NCC and it would be reviewed in more detailed way and  more proactive for organisations that are not as strong as they look.

“NCC is looking through the books in a deeper way beyond submission. By the end of September or early October, NCC would know the financial health status of these operators. NCC has set in motion this department almost immediately to check for necessary expansion plan, drop calls per 10 cities, and call set-up success rates through the four different key performance indicators.”

The commissioner declared that with the recent Etisalat saga, “If other operators are not thinking in line of consolidation/ merger, there might be a problem.”

However, he cautioned that before mergers, they should check certain clauses, including monopoly, anti-protective in terms of OTT, while stressing that consolidation would increase thier profit, especially through OTT.

Dare was also quick to point out that the regulator has a role to play and it is left for the operators to consolidate or merge. He noted that when Indian professionals realised this, they changed the course of things and things worked out: “Consolidation happened overnight and they have seven operators now. Today, India is number one when it comes to telecoms. Currently, they have one million phone calls daily and over one billion subscribers.”

He disclosed that one of the key drivers of the Code of Corporate Governance is financial accountability because there is public interest.

“Before we can attract investment in the country, we must be transparent. And once this principle is enshrined, big companies won’t crash, because codes are standards.”

Dare maintained that the telecoms Code of Corporate Governance would be reviewed every year or two, as contained in the document.

However, chairman of the committee, Barr. Felix Adeoye, explained that the code was not intended to micro-manage the telecommunication operators and that foreign directive investment (FDI) is not impacted negatively.

He further explained that the Code of Corporate Governance for the telecommunication industry became mandatory in 2016 and stressed that one of the codes says no person can be a director for more than 15 years, to foster transparency.

that there are also rewards for operators who comply to the directives.


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June 2018
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