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Many Frustrations of GSM
(This Day (Nigeria))Perhaps, there is no better illustration of the ever increasing frustrations of GSM telephony services providers even as they battle Nigeria's poorly developed infrastructures to deliver world class service than the recent arrest of five suspects on the charges of stealing diesel at MTN's BTL Site in Kudola Village, Ondo State. The five men-Bukunola Omolafe, Abiodun Olulola, Oyeniran Olawole, Shina Julius and Femi Ajanaku- were arraigned at Oka Quarter Magistrate Court 2 presided over by Justice Olowookere on November 7, 2005. But the case could not go on as the police prosecutor, Sergeant Adebayo asked the court for an adjournment. This is mainly due to the absence of the Investigating Police Officer (IPO), Corporal Abiodun in court. Indeed, Sergeant Adebayo tendered a sick certificate, which indicated that the IPO is sick and he subsequently asked for adjournment of the case. The defence counsels who was in court with his clients did not oppose the demand and the case was adjourned till December 12, 2005.
While not necessarily pronouncing the men guilty before the court gives its verdict on the issue, it is important to note that this is just one of such numerous thefts that go on daily at base stations of GSM telephony companies across the country. Even then, there is the problem of the immediate community in which most of the base stations are located. While some communities have indeed been good host, the experience of the companies to put it midly have been unpleasant in many others.
Diesel used in powering generators which generate energy for the base stations have especially been the target because it's the most commonly used of all inputs to a base station. Just as it's being used to power generators, the local fisherman also uses it to power his boats. There is also the grinding machine operator, the lorry driver and others who depend on diesel to eke out a daily living. So, the incentive to steal the product is there for the light fingered as he can always find a market for it.
But the point is the GSM telephony service providers need not maintain such a huge inventory of diesel that now make their various base stations a veritable point of theft for itinerant thieves if all is well with the Nigerian public power supply. The state owned Power Holding Company of Nigeria (PHCN) supplies just about 16.87 percent of the energy needs of the service providers. Therefore, the companies have had to on their own invest heavily in alternative power supply system to generate the remaining 84 percent. It was gathered that in 2003 for instance, there were more than 5,600 generators at work in various sites of GSM operators across the country with about 84 million litres of diesel valued at about N5 billion being used to run them. This is without taking the cost of servicing, replacements of spares parts, operation personnel and the sheer logistic of moving such a huge quantity of fuel into some of the remotest areas of the country, on roads that are hardly passable!. Of course, given the expansion of GSM telephony services to many more areas of the country, and the ever rising cost of diesel, it will not be a surprise if the number of generators and the cost of keeping them working have doubled since this statistics was compiled in 2003.
Thus, the GSM operators are unarguably, the second biggest generator of power in country today as recognised by Engineer Ernest Ndukwe, the helmsman of the regulatory body of the industry, the National Communications Commission at a forum earlier this year. Ndukwe also rightly noted that the spending on generators is a waste of fund as such fund would have been channelled to more useful purposes. Mohammed Jameel, Chief Operating Officer, Glomobile aptly captured the frustrations of the telecoms companies also at the forum when he revealed a typical base station of an operator has a minimum of two generating sets which consume 5000 litres of diesel per day. He noted that the huge expenses on generators is not only a drain on the revenue of the service provider but is also partly the reason why operators are finding it difficult to reduce tariffs as "millions of Naira that would have gone to subscribers as low tariffs are spent on base stations".
Yet, the power problem though key, is just one of the problems confronting the operators. Government at all levels, including different parastatals and agencies have also come to see the GSM companies as veritable cashcows. As a result, they have no qualms in slamming different fees, levies and tariffs on the companies under various guises. A Federal Government agency, earlier in the year for instance increased the fees it charges operators for erection of masts and towers by between 1000 to 5000 percent! Some state governments have also imposed different fees and levies on the operators.
The absence of clear laid down rules and regulations on the collection of taxes and the unwieldy Nigerian tax laws have not helped the case of the operators. There is also the additional problem of street urchins popularly known as "area boys" who demand various amounts of money from the operators as "settlement" immediately they see officials of the companies trying to put up an infrastructure. Unfortunately, even statutorily empowered law officers at times find it difficult to rein in the activities of these despicable characters. The "area-boys" also sometimes return to vandalise such equipments inspite of being settled!. Not to be caught off-guard, the companies have also had to dissipate funds on the employment of security guards at their various sites, thus adding significantly to their cost of operations.
There is also the problem of inadequate backbone infrastructure. This has resulted in the different operators spending billions of Naira to construct personal microwave and fibre optic network. There is an estimated 20,000 kilometre of fibre optic network that has been laid across Nigeria by the GSM companies and others since 1999. In other climes, such infrastructures are taken for granted as they are provided by the national operator. Unfortunately, NITEL, Nigeria's first national operator is unable to make the infrastructure available.
One other frustration that operators have had to contend with is the cumbersome process of clearing goods at our ports. Unfortunately, over 95 percent of equipment used in roll out of telecom networks are imported, so there is no running away from the port for the operators. But it sometimes takes weeks to get vital equipment cleared from the ports. This has sometimes resulted in avoidable delays in network rollout and consequent loss of revenue by operators. Other problems confronting operators including the high cost of funds-estimated to be between 24 to 30 percent higher than in other countries as well as the disparity between the current regulatory framework and market realities.
But in spite of these and other frustrations, it's gladdening to note that the operators have soldiered on and the cumulative contribution of the sector to the National Treasury is estimated at N200 billion since the first GSM call was made on MTN network in 2001. Apart from millions of direct and indirect employment, over 120,000 businesses in form of dealership, distribution retailing, supplying and provision of content have also been created. In about four years (2001 - 2005) subscriber base, according to NCC record, has hit 16 million mark, a record in the global history of GSM evolution.
The Nigerian GSM market, according to one estimate has the potential to generate over US$7 billion by 2007. It is estimated that operators will need to spend a minimum of $3 billion annually on the development of infrastructures in the next five years to get to this state. But the government and all concerned will have to get to work on addressing the headaches of the operators as highlighted above. It's my belief that these are the issues that can be effectively tackled if only those in authority will show more commitment. And that's when we can rightly demand for a world-class service without any reservations from the operators.
Mr. Ilori, a telecommunication engineer, writes from Lagos
Distributed by AllAfrica Global Media. (allafrica.com)
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