STRATEGIC IMPERATIVES FOR AN EFFECTIVE UNIVERSAL ACCESS REGIME IN NIGERIA

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STRATEGIC IMPERATIVES FOR AN EFFECTIVE UNIVERSAL
ACCESS REGIME IN NIGERIA by Osondu C.
NwokoroHead of Division Regulatory Affairs
Celtel Nigeria Limited
2nd Annual Nigerian International GSM Conference
and Exhibition 2007 10
12th July 2007
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OUTLINE

• Telecommunications, Universal Access and
  Socio-economic development.
• Universal Access Framework.
• Impact of Mobile on Access Case Studies.
• Key Universal Access Friendly Features of Mobile.
  
• Facilitatory Stakeholders.
• Interplay of Stakeholder Implementation
  Strategies.
• Strategic Learning Points.
• Suggested Best Practices / Conclusion.

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TELECOMMUNICATIONS, UNIVERSAL ACCESS AND
SOCIO-ECONOMIC DEVELOPMENT
Access to telecom services is the key to
development and growth. .. However, existing
economic imbalances and social inequalities will
be deepened if access is unequally distributed.
Thus, equal opportunities are necessary to avoid
creating an even bigger gap between the digital
haves and have-nots.
Growth of Telecoms Services in Rural India (TRAI)
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TELECOMMUNICATIONS, UNIVERSAL ACCESS AND
SOCIO-ECONOMIC DEVELOPMENT Contd..
Communication technologies affect poverty
reduction in three ways, increasing the
efficiency of the economy, enabling better
delivery of public services, such as health and
education, and creating new sources of income,
employment and training for the same, for poor
population. Growth of Telecoms
Services in Rural India (TRAI)
In Nigeria telecommunications has contributed to
the creation and sustenance of jobs through
employment of direct and indirect labour of over
150,000 persons who support a further tier of
jobs. The Nigerian Mobile
Telecommunications Industry and NEEDS
(GSM Nigeria Consultative Forum)
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TELECOMMUNICATIONS, UNIVERSAL ACCESS AND
SOCIO-ECONOMIC DEVELOPMENT Contd..
In Africa (as indeed, Nigeria),
.telecommunications means mobile
telecommunications. The whole developmental
stage of widespread fixed line service has been
leap-frogged by mobile in many nations.
- L. Waverman and others.
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UNIVERSAL ACCESS FRAMEWORK

• Universal Service Provision Fund (USPF). Provided
  for under Nigeria Communications Act, 2003
  recently established domiciled in the Nigerian
  Communications Commission (NCC).
• National Rural Telephony Programme. Sponsored and
  co-ordinated by the Ministry of Communications.
• Need for these efforts to be streamlined.

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IMPACT OF MOBILE ON ACCESS Case Studies

• In Nigeria
• Mobile deployment outpaces Universal Access
  promotion efforts of regulators in one year
  of operation, each mobile operator in Nigeria
  surpassed the rollout targets stipulated in the
  DML.
• Mobile services available in all 36 States
  of the Federation and the FCT. Over 60 of the
  Local Government Areas and at least 6,000 towns
  communities and small villages are covered.
• Mobile telephony currently accounts for over
  95 of the total telephone connections in
  Nigeria. GSM Operators contributed in excess of
  33m subscribers out of the total industry figure
  of 35m reported in January 2007.

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IMPACT OF MOBILE ON ACCESS Case Studies Contd..

• Study of the USF in the following countries was
  conducted Bolivia, Brazil, Chile, Colombia,
  Guatemala, India, Indonesia, Malaysia, Nicaragua,
  Pakistan, Peru, Uganda, South Africa and Vietnam.
• Findings
• 6.2b collected from fixed and mobile operators.
• Fixed Operators allocated over 40 of their
  contribution.
• Mobile Operators allocated less than 5 of their
  contribution.
• Impact of USF has been poor in all countries
  except Columbia and
  Uganda.
• Key factor in Uganda success is that Mobile
  Operators were central to the the project and
  were located 100 of the countrys USF.
• If the USF levies from the Mobile Operators had
  been reinvested in mobile deployment in rural
  areas, an additional 230 million people would
  have had Access.

Universal Access How Mobile Can Bring
Communications To All (GSMA Study)
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KEY UNIVERSAL ACCESS FRIENDLY FEATURES OF MOBILE

• Relatively expeditious and easy deployment of
  network infrastructure in remote locations.
• Can facilitate voice telephony, data access over
  owner transmission platforms.
• For the consumer, integration of such service
  segments results in
• price discounts,
• variety of service offerings.
• Ease of subscriber entry to network as SIM
  activation and replacement is now achieved in
  less than 5 minutes.
• Can be deployed for wholesale use in locations
  where private ownership of handsets is
  constrained by economic reasons.

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FACILITATORY STAKEHOLDERS

• 1. Operators
• - Mobile, Fixed, etc
• 2. Government
• - MOC, NCC, USPF

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INTERPLAY OF STAKEHOLDER IMPLEMENTATION
STRATEGIES
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INTERPLAY OF STAKEHOLDER IMPLEMENTATION
STRATEGIES CONTD

TOTAL COST OF NETWORK OWNERSHIP Determined By
External And Internal Factors. EXTERNAL
- License / Spectrum / Numbering Fees.
- Taxes and Levies. -
Availability of infrastructure (power, roads,
etc). - Transmission
expenditure. INTERNAL - Cost of
construction, operation and maintenance of the
network.
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INTERPLAY OF KEY STAKEHOLDER IMPLEMENTATION
STRATEGIES CONTD

• CONSUMERS BARRIER TO NETWORK ENTRY Either Cash
  Or Service / Product Offering Related.
• CASH
• - Ultra low cost handsets to be introduced by
  GSMA in conjunction with some Suppliers.
• - Affordability of lines (as low as N100.00).
• - Retention of subscriber on network
  irrespective of income level e.g Celtel for
  Life.
• - Affordability of tariffs - getting lower.
• - Availability and affordability of Top Ups -
  denomination - free e-vouchers.
• - Availability of per second tariff
  plans.
• SERVICE / PRODUCT OFFERING
• - Family and Friends Tariff Plans.
• - Free on-net calls.
• - Public phone services.
• - Various mobile data solutions from enhanced
  SMS based data sourcing, GPRS, EDGE, 3G
  deployed at Community Information Centres
  support UA
• e.g the Grameen Phone Project
  in Bangladesh.

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STRATEGIC LEARNING POINTS

• Cohesion and proper co-ordination within
  Government critical for operators buy in to the
  Universal Access Project.
• Successful implementation of strategy by one
  stakeholder determined by level of support
  derived from the other stakeholders Apparent
  symbiotic relationship.
• External factors impacting total cost of network
  ownership can be modulated through favourable
  regulatory policy regimes higher expenditure
  costs will either
• discourage mobile operators from further roll
  out or
• be passed on to the consumer if service is rolled
  out.
• Reduction on network operating and maintenance
  costs imperative for mobile operators when
  building a business case for expansion to
  underserved/low density areas. Operators are
  beginning to
• Co-locate and share infrastructure among
  themselves
• Review network design to ensure optimal use of
  resources such as spectrum and numbers.

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STRATEGIC LEARNING POINTS Contd

• Universal Access friendly products, services and
  solutions now being developed by mobile
  operators.
• Mobile telephony, best platform for
  implementation of Universal Access in Nigeria.
• The development of Universal Access friendly
  products, services e.t.c. will be further fast
  tracked with the active support of the Government
  and the NCC through favourable policies and
  regulatory practices.
• Cost savings due to favourable policies and
  regulatory practices will be deployed towards
  further roll out and innovative service
  offerings.

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SUGGESTED BEST PRACTICES /
CONCLUSION

• The National Rural Telephony Programme should be
  subsumed under the USPF.
• Each stakeholder should perceive the other as an
  equal partner in the Universal Access Project.
• All Operators should contribute to the USF by
  duly paying Annual Operating Levies.
• Market Access Gap and True Access Gap should be
  determined and strategy for addressing these gaps
  developed.
• Establishment of realistic and feasible Universal
  Access targets.
• Industry Consultation on use of USF, size of
  levies and USPF operational strategy critical for
  credibility of UA process NCCs Biu UA Pilot
  Project of 2005.
• Subsidies should only be granted to efficient and
  tested operators.
• USPF administrative costs should be kept at a
  minimum to ensure funds are not eroded.
• Regulatory fees (numbers, spectrum, AOL) and
  State/Local Government levies paid by operators
  should be reviewed downward to reflect only the
  administrative cost of issuance.

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Thank you