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Nigeria 2015 | TELECOMS, IT & MEDIA | INTERVIEW

TBY talks to Dr. Eugene Juwah, Executive Vice-Chairman & CEO of the Nigerian Communications Commission (NCC), on investment in the sector, the broadband services rollout, and support for indigenous companies.

Dr. Eugene Juwah
BIOGRAPHY
Since July 29, 2010, Dr. Eugene Ikemefuna Juwah has been the Executive Vice-Chairman & CEO of the Nigerian Communications Commission (NCC) with over thirty years of experience in the Information Technology and Telecommunications industries; over twenty of those years have been spent at senior management level. He holds a PhD from the University of Manchester, and an MSc. from the Technical University of Veszprem. Before his appointment, Dr. Juwah worked variously with Shell BP Petroleum Company and the Leventis Group of Companies before being invited in 1993 to join the Management of Mobile Telecommunications Services Limited, as Director (Cellular Operations). He also held senior management positions at Communication Investment Limited (CIL).

In July 2010 you created a six-point agenda for the NCC. How would you rate your progress in these areas over the past four years?

During this period, the subscriber base of the telecommunications industry has risen from 80 million in 2010 to over 134.5 million by the end of September, 2014. We have increased teledensity from 60% to 96.08% within the period, and the industry's contribution to GDP has risen from 5% in 2010 to 8.6% today. Apart from that, from the perspective of regulatory interventions, we have enabled customers to retain their mobile numbers through mobile number portability, which has increased competition. I was recently elected chair of the Commonwealth Telecommunications Organization; one thing I promised was that we will increase our presence in the international forum. Today, Nigeria is a council member of the International Telecommunications Union. We have also started the implementation of our broadband project, which will move Nigeria toward becoming a knowledge-based economy. I think we have done quite well over the past four years.

Investment in the telecoms sector has increased to $32 billion. How has the NCC facilitated this investment and how do you assess the opportunities for future investment in Nigeria?

MTN is an excellent example; it started operations in Nigeria expecting a market of 250,000 customers, but today has 55 million customers on its network, and is generating billions of dollars in profits. We run campaigns at numerous events held by the International Telecommunications Union, all of which are carefully developed and coordinated to encourage the interest of international investors in Nigeria. Over time, Nigeria has become the first stop for investment among the developing countries. Our market is the fastest growing in Africa; one of the key reasons is trust in our regulatory environment, which provides a level playing field for all participants.

Will the upcoming broadband services rollout unleash a data revolution in Nigeria?

Nigeria has made strides in voice services, but still lags in data services. Today broadband penetration in Nigeria is just 6.1%, and the government has come up with a broadband plan for 30% penetration by 2018. So we are trying to align with this plan by implementing a broadband project. One of the key facets of this project is infrastructure companies (InfraCos). These are divided into the seven areas of Nigeria. We have completed the bidding process for the first pilot, and will soon issue the license.

What are the opportunities for foreign investors to key into the data revolution?

Nigerian law does not place limitations on foreign holdings. This openness is actually exemplary; we are probably the only emerging market to have such an environment. The only criterion stipulated is registration in Nigeria, and aside from that, an operation can be 100% foreign owned. There has been increased foreign participation in Nigeria's telecommunications industry. We are encouraging companies to participate in the stock market and hope to see increased foreign investment, but also a rise in foreign-Nigerian partnerships.

Do you have any incentives or policies in place to support indigenous players?

The telecommunications revolution in Nigeria has sidestepped part of our local population; most of the companies here are huge foreign entities. Nigerians feel they should move in step with this juggernaut; so the government has started to implement a local content policy. We are looking at restructuring the value-added services of the sector, such that our local creative population can piggyback these foreign companies. Additionally, there are benefits to providing services that do not require the capital outlay of facility-based companies, like MTN. We are optimistic that the local population will participate in the revolution that we are witnessing today.

Are you encouraging foreign players to team up with indigenous firms?

Our pursuits in this regard are already seeing results. Our president was in South Africa some time ago where he persuaded firms to come to Nigeria and list on the stock market to increase local participation. It is not easy for companies to share their profitability, but they realize that to fit into the local economic climate requires willingness to create mutual success.

Will ICT eventually eclipse the oil and gas sector?

The ICT sector is growing faster than the oil and gas sector. ICT contributes greatly to the GDP, while also playing a critical role in the oil and gas industry, and therefore is a foundation infrastructure. Nobody thought that ICT would overtake the banks in terms of contribution to GDP. With the advent of broadband and the explosion it promises, it is highly likely, therefore, that we will overtake the oil and gas sector.

What are you doing to improve the quality of service provided by the operators?

There are two major impediments to high-quality service. The first is the improvement of capacity by service providers; this needs investment from their side in order to match the growing subscriber base and avoid network congestion, one of the primary detractors of service quality. This is completely under the control of the service providers. Yet certain issues are caused by government agencies at both the Federal and State levels. These agencies are locking out base stations and not providing premises to build new ones. They routinely promise to provide premises but have yet to do so. The regulator is always blamed, but the blame lies in the inability of all parties to realize that growth of this industry requires cooperation. The State Governments view telecoms as a revenue source, so a base station translates directly into tax revenue. However, with taxation in Nigeria, telecom taxation goes to the Federal Government, and worst of all, when these fees are not paid they lock the base stations. Lock-outs at base stations create quality of service issues. Also, there is rampant vandalism of these facilities. In conjunction with the government, we are championing a bill to criminalize such vandalism.

The NCC's activities are said to be transparent. Is this due to the Communications Act, the people operating it, or the government?

Transparency is a product of all of the above. The Communications Act mandates a certain level of performance. The NCC must intervene to keep the industry in line with this law in a highly transparent manner. The service providers move to abide by these rules. This keeps them confident of their operations. When we do penalize them, providers cooperate because they realize that we are maintaining order. The government gives us sufficient leeway to operate without interference. For example, it does not tell us whom to grant licenses or allocate a frequency band to. The government and related organizations keep the spirit of the law, which has fostered growth in Nigeria's telecommunications industry. As a result, investors are assured that their investment will be protected and that their operations will be correctly regulated.