The Nigerian Communications Commission (NCC) recently instructed IHS Towers Nigeria and ATC Nigeria to disconnect any indebted telecommunication companies from their facilities.
Following this development, many of the telcos are said to be worried that the NCC’s directive could portend negative effects on their businesses. Specifically speaking, the telcos are afraid that they may lose their subscribers as well as huge revenue if they are eventually disconnected from the IHS and ATC Nigeria facilities.
Why the NCC approved the disconnections
Apparently, some of the telecom operators are owing IHS Towers and ATC Nigeria. And the NCC believes that telcos have no excuse to owe facility operators, hence the approval to disconnect any telco that is indebted.
Meanwhile, the telco’s indebtedness to facility operators has mostly been blamed on the 2016 devaluation of the naira, according to unnamed sources at IHS, ATC and the NCC.
According to them, the devaluation of the naira by as much as 40% automatically resulted in an increase in tower lease rental. And this is because the tower lease contracts were initially dollar-denominated instead of naira-denominated.
Bearing this in mind, therefore, the concerned stakeholders spoke on the need for future agreements between telcos and the facility operators to be signed in naira term as against the dollar. This, for them, is important as it would facilitate better cooperation and ultimately ensure success in the sector.
- Get the scoops and market intelligence that can help
you make better investment decisions right in your
Meanwhile, telecoms subscribers will not be affected
Following the expression of fear by telcos that the development could potentially hurt their subscribers, the NCC has spoken out to allay the fears, stressing that its earlier directive to IHS and ATC had been misconstrued.
Speaking recently in Abuja, the NCC’s Executive Commissioner of Stakeholder Management, Mr Sunday Dare, said the disconnection will not affect any telecom subscribers. Instead, services would be restricted to some indebted telcos, he said.
“over the years, the industry has been plagued with the very serious problem of interconnect and facility indebtedness. Some operators have racked up huge debts to others and have simply refused to pay.
“Having done everything we could, including holding many meetings with the parties and brokering several payments plans to no avail, NCC has little choice in the matter but to grant the persistent requests of the creditor organisations to disconnect the chronic debtors in accordance with the Nigerian Communications Act and our Disconnection Regulations.” – Dare
He also stressed that it is the core objective of the NCC to protect the interests of telecom subscribers and will continue to do so.