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Deepening Local Content In Telecoms Sector

Two decades after the famous telecoms revolution that has seen the value of the sector rise to about $80 billion and Q3 2021 contribution of 11.94 per cent to the nation’s gross domestic product (GDP), indigenous content has remained insignificant. LUCAS AJANAKU writes on the need for Nigeria Office for Developing the Indigenous Telecom Sector (NODITS) to close the gap.

Twenty years after the liberalisation of the telecom sector  opened a floodgate of both local and foreign investments into the country, indigenous content in the sector has been nothing to write home about. Indigenous players have been playing on the fringes, manufacturing subscriber identity module (SIM) cards, airtime, plastic casings for mobile phones and such others.

In terms of local manufacturing of mobile phones, the big techs such as Huawei, Samsung, Apple, Tecno, and other China’s brands have dominated the space. There are about one of two firms that play in that area, their impacts are yet to be felt significantly.

Realising the need to improve the promotion of indigenous contents in the nation’s telecoms sector, President Muhammadu Buhari signed the National Policy for the Promotion of Indigenous Content in the Telecommunication Sector (NPPIC) in March, 2021. That led to the creation of NODITS in July 5, 2021, which is a special purpose vehicle (SPV) designed to stimulate the creation and development of top quality indigenous content in the telecommunication sector. NODITS was subsequently domiciled in the Nigerian Communications Commission (NCC).

The Executive Vice Chairman and Chief Executive Officer (EVC/CEO), NCC, Prof. Umar Danbatta, has urged NODITS on the need to ensure effective delivery of its mandates with respect to the promotion of indigenous contents in the nation’s telecoms sector, adding that the office was very critical to effective mainstreaming of local content development in the nation’s burgeoning telecoms sector.

Prof Danbatta said the development of NPPIC, facilitated by the Minister for Communications and Digital Economy, Prof. Isa Ali Pantami, is essentially aimed at driving the desire of the current administration and the NCC to ensure that indigenes become more active participants in Nigeria’s telecoms sector.

The EVC said, as an SPV under the purview of the Commission, NODITS would be expected to get involved in development of new guidelines and regulations bordering on indigenous content, local manufacturing of telecom equipment, outsourcing services, construction and lease of telecoms ducts, succession planning in the telecoms sector, among others.

He also urged the NODITS team to adhere to regulatory and ethical principles held in high esteem by the management of NCC. “The Commission’s commitment to maintaining high standards, ethical conduct, and superior performance is a priority of the management, hence by extension, NODITS should reflect the established values, guiding principles, strategic awareness and the goodwill associated with the NCC,” he said.

Besides, the EVC said NODITS would be involved in working with various stakeholders towards reducing capital flight, as local manufacturers would be encouraged to participate in the design and manufacturing of devices. This vision will also ensure that manpower requirements towards making indigenes active participants in the Nigeria’s telecoms development are met.

“In essence, NODITS will be expected to initiate strategic programmes and projects that will stimulate the growth of the telecoms sector through an approach that is visionary, focused, sustainable and based on incentives to indigenous telecom stakeholders” EVC said added.

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Prof Danbatta congratulated the pioneer team of the new Office, saying they were carefully selected by NCC management based on their background, dedication and integrity. He urged the team to work harmoniously within the Office and with other relevant stakeholders to fast-track seamless delivery of its mandates, as clearly spelt out in the NPPIC.

Team Lead, NODITS, Babagana Digima, said what the mission of NODITS is “to deliver on the objectives of the National Policy for the Promotion of Indigenous Content in the telecom industry and the Executive Orders 003 & 005,” its vision is “to harmoniously integrate indigenous content in the Nigerian telecoms sector.”

The Executive Order 003 mandates all the Ministries, Departments and Agencies (MDAs) to always grant preference to local manufacturers of goods and service providers for procurement; while Executive Order 005 seeks the promotion of Nigerian content in contracts bordering on science, engineering and technology.

Some of the activities being carried out by NODITS within the last five months of its creation, Digima said  include visiting the National Information Technology Development Agency (NITDA); visitations to various Subscriber Identification Module (SIM) manufacturers; engagements with Mobile Network Operators (MNOs); ongoing training of 60 young entrepreneurs, and developing industry relevant proposals for incentivising Information Communication Technology (ICT) companies by the Federal Government, among others.

Digima said NODITS has, so far, identified partners it would be collaborating with towards achieving its mandates. They include the NCC, NITDA, Standards Organisation of Nigeria (SON), Ministry of Communications and Digital Economy, Nigerian Investment Promotion Commission (NIPC), Nigerian Contents Development and Monitoring Board (NCDMB) and the Raw Materials Research and Development Council (RMRDC).

Others are the Bureau of Public Procurement (BPP), Industrial Training Fund (ITF), National Agency for Science and Engineering Infrastructure (NASENI), National Automotive Design and Development Council (NADDC), Nigerian Exports Zones Processing Authority (NEZPA), Nigeria Extractive Industries Transparency Initiative (NEITI), and Ajaokuta Steel Company (ASC).

Digima called on his team at NODITS to work with dedication and purpose towards building a telecoms sector where ingenious players are actively participating in creating values for the overall development of the digital economy. “A chain is only as strong as its weakest link. I want us to build a strong and resilient office that will be fit-for-purpose, withstand the test of time and which the telecom industry will look back at and appreciate like the great pyramids of Egypt. All of us will be the designers, thinkers, architects, and builders in this great NODITS journey,” he added to 15 years loans, and equity participation,” he said.

The Chief Executive Officer of Swift Telephone Network, Oluwole Adetuyi, agreed no less with Ibisi. He said for the indigenous operators to grow, the sector would require access to funding for from financial institutions at low-interest rates.

Ibisi said indigenous players need seed funds, increased subsidies, incentives for local device manufacturers (including duty waivers for equipment and components), pioneer status for indigenous players in manufacturing, services, research and development, and innovation fund.

He said in other climes, they make some funds available to indigenous players.

For instance, Ibisi said in the USA, there is a $65 billion Broadband Fund, which comprises $42.45 billion for a new Broadband Equity, Access and Deployment program focused on connecting un-and underserved areas; a $1 billion grant programme targeting middle-mile infrastructure; and $14.2 billion for an affordable connectivity subsidy programme.

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According to him, in the UK, there is a £30 billion broadband expansion program, while Germany has $14.5 billion Digital Infrastructure Fund and $10 billion for broadband expansion.

Speaking to the New National Broadband Plan (2020-2025) which needs $5 billion for implementation, Ibisi said national backbone and metro fibre of 80,000km would cost $1.5 billion; 4G roll out targeting 2,500 base stations is expected to gulp between $1-2 billion; 5G roll out with 6,000 base stations is pegged at $500 million; local manufacture of devices to cost $100 million.

He recalled that there have been power and aviation funds via the BoI of about N300 billion, with seven per cent interest rate, and between 10 and15 years tenure.

According to him, there has been a $37 billion Infrastructure Fund of the Infrastructure Corp of Nigeria (InfraCorp), managed by four asset managers with $2.4 billion seed capital from the Federal Government. He added that there was also the Nigerian Content Intervention Fund (NCIF) supervised by the Bank of Industry.

“We need similar fund as NCIF with seven per cent interest rate, 10 to 15 years loan and equity participation; equity participation by InfraCorp; subsidies and grants, and pioneer status for five years (Tax Waivers and Duty Waivers),” Ibisi stressed.

Swift Telephone Network chief said easy access to foreign exchange (forex) is needed at Central Bank of Nigeria (CBN) approved rate. He added that it will not be a bad idea if a special intervention funds for the telecoms sector is created by the apex bank as has been done to other sectors.

He said tax waivers, as well as provision of grants and subsidies to telecoms operators, would help the small players grow, adding that reduction and harmonisation of right-of-way (RoW) charges across states and local government areas would also be in the interest of growing local content in the sector.

He urged the NCC to put in place a strong local content policy because of the need to create more jobs, increase FDIs, improve technology adoption, enhance security; improve revenue and forex earnings.

Adetuyi said most PNLs and local telecommunication companies in Nigeria fall into the SME category, accounting for 60 to 70 per cent of jobs in most developed economies.

He said the in the telecoms sector, these categories of network operators also account for a large share of entrants and exits.

”If Nigeria must play in the unfolding IoT market that is in excess of $20 trillion, it must use its local companies with smaller legacy loads to drive faster technology adoption,” he said.

According to him, there must be urgent reforms, which must promote a regulatory environment conducive to the development of smaller firms as part of the consideration for growth; lesser regulatory burdens on small operators, and NCC should allow the use of Nigerian numbers on a global scale as it is with the USA, the UK Canada, and numbers.

Divisional CEO, ipNX, Segun Okuneye, said interventionist policies needed in the industry.

He said considering the current relatively slow pace of infrastructure development in the country, interventionist policies by the government have become necessary in order to give telecoms operators the required leverage to resolve challenges that impede their ability to deliver seamless services to subscribers.

Source: Nation

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