Unfavourable policies, high tax burden, rising operational cost are among issues that have weighed down on Nigerian telecommunications operators, and pushing off prospective investors into the industry.
This was the view expressed by the Chairman of the Association of Licensed Telecommunications Operators in Nigeria (ALTON), Gbenga Adebayo, as he calls for regulatory reforms within the country’s telecommunications sector, to alleviate the burden on operators and attract investments for industry growth.
Speaking at a recent forum in Lagos themed “Telecom Industry 2.0 – The Next Investment Frontier in Africa”, Engr. Adebayo reflected on the irony that has turned the successes of the Nigerian telecom sector into a curse to operators.
According to him, this is because individuals, corporate bodies and government agencies now view the sector as a “cash cow” which is not being fed. “I think the telecommunications industry has become a victim of its own success. Due to the transition and improvement, it has experienced over the years, the telecoms sector is now seen as a major source of income for the government on various levels”.
Engr. Adebayo went further to air grievances on the multiple taxes imposed on the industry operators and the need for the government to curb the excesses of its parastatals. He cited these numerous taxes as detrimental to the progress of operations within the sector.
“There are 54 different taxes and levies imposed on the telecoms industry in Nigeria. With this trend, the sustainability of the sector cannot be guaranteed” he said.
The ALTON chairman opined that the stringent policies guiding the telecommunications industry have made it unattractive for investors.
He stated that this is a disadvantage to the sector, as investments are a catalyst for the sector’s growth, and urged the government to implement changes that would make the industry investor-friendly. “The steps taken by public actors appear to be a disincentive to investment in the industry. The government needs to be more receptive to foreign investment”.
In addition, Gbenga Adebayo cited the decline in the services rendered by telcos due to the high operational costs and lack of investment in infrastructure.
According to him, the operations of these major MNOs cannot be optimal as there is a lack of adequate infrastructure, but an ever-growing demand to meet. He added that the high cost of energy has made it even more difficult for operators to efficiently power their facilities.
With the rising cost of operations, high inflation rates and other economic challenges Nigeria is presently faced with, it has become necessary for various strategies and policy reforms to be implemented within the telecommunications industry, to spur growth and prevent further decline.
Among other key industry players at the event were Chief Executive Officer of Nigerian Exchange Group, Temi Popoola; Chief Executive Officer, MTN Nigeria, Karl Toriola and Chief Executive Officer, Airtel Nigeria, Carl Cruz.
