Recession: Telecoms operators demand bailout, infrastructure bank

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Beaten by a recessive economy, players in the Nigeria telecom sector are demanding government bail out to bring back the vibes in the sector. As with other sectors of the economy, many telecom players have gone under, due to the economic situation, however, stakeholders in the industry believe that with government financing in terms of bail out things will begin to turn around for the players. Aside bail out, they also pointed to the need for the government to establish an infrastructure bank for the sector in order to bridge telecom infrastructure gaps in the country.

Speaking at a forum in Lagos, MrIkechukwuNnamani, Chief Executive Officer of Medallion Communications, said one major challenge confronting operators in the Nigerian telecom landscape is financing and with the current situation of the economy, this can only be addressed by a government bailout.

“We have seen bail out in banking and other sectors, why not telecom?, he queried. According to him, many telecoms businesses have shut down in the last few years due to no fault of theirs but because the economy is not favourable.

“Most of those companies that have died did not die because of poor management, it was because of bad economic condition” he said. Nnamani added that the sector also requires infrastructure bank to be able to address financing challenges in infrastructure building for broadband.

But in a recent chat with the media, the President of Association of Licensed Telecoms Operators of Nigeria (ALTON) Engr. Gbenga Adebayo, said though operators are facing serious financial challenges as the Average Revenue Per User (ARPU) has gone down considerably, bail out alone would not solve their problems.

The ALTON President indeed, disclosed that interconnection debts between the operators had become so huge that it has become another major headache for the operators. However, rather than bail out as a standalone intervention, Adebayo canvassed robust policy interventions that would make the business profitable for the operators.

Meanwhile, in his own submission at the forum, MrOsonduNwokoro, Director, External Affairs at Ntel, said the idea of infrastructure bank for the ICT industry, which was recently announced by the government, would bring succor to the telecom sector if implemented. He urged the Minister of Communications, Barrister Adebayo Shittu to expedite actions on the establishment of the bank, which he said would help address financing challenges in the telecom sector.

The Communications Minister had earlier this year announced plans by the federal government to establish a specialized bank to cater for the development of the Information and Communications Technology industry. Shittu had noted that the establishment of ICT development bank became expedient because the regular banks cannot cater for the needs of operators in the ICT industry because of the time it takes to develop ICT products and services, from conception to market.The minister said the proposed bank was provided for in the ICT Roadmap which, he said, had been approved by the Federal Executive Council.

But the Vice President, Regulatory & Corporate Affairs at 9Mobile,Mr Ibrahim Dikko, believes that the most essential support the telecom sector needs from the government now is the declaration of telecoms infrastructure as critical national infrastructure to guard against the willful vandalisation of infrastructure being experienced by operators across the country.

“In those days, if you damage NITEL infrastructure, it was a criminal offence, but today, we experience fibre cut everyday and nobody is being held responsible. For us to get out of this problem, telecom infrastructure must be declared as critical national infrastructure” he said.

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