Why 90% of Internet Service Providers Collapse – NCC

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Sunday Dare

THE Nigerian Communications Commission, NCC, has revealed why more than 90 percent of the Internet Service Providers, ISPs, collapsed within the last five year. The Commission attributed the decline in the number of ISPs in the country to many factors ranging from harsh economic environment and the bad competition from the big operators such as MTN, Globacom, Airtel and 9Mobile.

Funlola Akiode, director of Licensing and Authorisation, stated this at a stakeholders’ forum on Internet Service Providers organised by the Commission.

At the forum, Akiode noted that active ISPs in the country were not coming up for licence renewals because of their poor ability to compete with the ‘Big Four’, adding that in the past five years, the NCC had licensed a total number of 103 ISPs nationwide, “but only 10 per cent have applied for renewal of the licence.”

“This is one of the reasons why we are here, to find out if and why about 90 per cent of our ISPs are out of businesses, and why some ISPs have not rolled out services in accordance with the conditions of their licences, she said, adding that as a responsible regulator, the sustainability of ISPs in telecommunications businesses in Nigeria is a primary interest, especially when stakeholders meet.

While acknowledging that Nigeria still has a lot to do in terms of making Internet available, accessible and affordable, Akiode said that despite the fact that over 70 per cent of the country’s population are active mobile subscribers, the digital divide is still very wide especially as it regards rural dwellers.

She said the Commission has not lost sight of the critical position it occupies in guiding the growth of the industry through robust, fair and transparent and participatory processes, where compliance to extant rules are religiously followed.

She also stated that in 2017, statistics of Internet users across Africa indicated that Nigeria has the highest users.

“However, it may interest you to know that Nigeria, however, tends to be the lowest when measures in accordance with the penetration rate. For instance, the penetration of 48.4 million when compared with Nigeria’s population is just 0.3 per cent or 34 per cent, while our population is increasing in a geometric progression, the Internet usage and penetration rates are increasing in arithmetic progression.”

Akiode said the NCC was mindful of the difficult operating environment, the stifling competition from a variety of players, dearth of funding, among others, reason it has become important for stakeholders to meet.

Also, Sunday Dare, executive commissioner, Stakeholders Management, NCC, noted that the larger telecoms industry of which the ISPs are an integral part is beset with numerous challenges.

These, he said, include power, accessibility to foreign exchange, multiple taxation/regulation, infrastructure vandalism as well as high costs and long delays in obtaining right of ways permits.

“This not only degrade the quality of service provided by licensees, but also negatively affect the attainment of critical national objectives on the speedy roll-out of broadband networks to power socio-economic growth and the enhancement of the industry’s contribution to national gross domestic product, GDP,” he said.

He said the viability of the ISPs is particularly challenged by factors such as the availability of cheap/ubiquitous mobile Internet access, bandwidth costs, vertical integration of mobile networks operators, as well as growing uptake of leased line serviced by corporate, among others.

“We, however, strongly believe that ISPs have a critical role to play in the attainment of national broadband growth objectives and must therefore not be left to die out,” he said. – New Telegraph

Aug 14, 2017 @ 01:00 GMT

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