Lost in Space: Nigeria’s Telecoms and ICT Policy

By

Abubakar Atiku Nuhu-Koko

aanuhukoko@yahoo.com

 

 

President Umaru Musa Yar Adua (UMYA) has in the past 60 days or so scored some positive policy achievements even though he has been hastily nick-named Baba Go Slow by the impatient Nigerian polity, who are eager to start enjoying the sweetness of their “Servant-Leader.” For example, he successfully resolved the labour-led national strike action against the fuels price and Value Added Tax (VAT) rate increases that heralded his ascendancy to power; he successfully tackled and resolved the lingering four months old national strike action embarked upon by the Academic Staff Union of Universities (ASUU) that resulted to closure of federal universities; he successfully reversed the controversial auctioning of the Kaduna and Port Harcourt refineries and above all, he also, finally inaugurated his cabinet – all these were done after painstaking decisions albeit, slowly but producing the right results.

 

However, there is another hot spot that needs his urgent attention. That hot spot is located in nation’s crucial telecommunications sector. The news from a news media outlet reported on Monday, 30 July 2007 that the Chairman of Nigeria’s House of Representatives Ad-hoc Committee on GSM and Telecommunications, Hon. Leo Ogor (PDP Delta) threatened to start the process of removing Engr Ernest Ndukwe, the Vice Chairman and Chief Executive Officer (CEO) of the Nigerian Communication Commission (NCC) over the way he Ndukwe, has handled NigComSat-1 Ltd’s application for license to provide End-to-End communications services in the country.

 

This development however, did not come as a surprise to many Nigeria’s telecommunications industry watchers. The reason is that the sector is fast degenerating and returning to the dark days from which it was only recently rescued and salvaged by the immediate past administration of former president Obasanjo. For example, GSM services are degenerating by the day while the prices charged do not match the value for the money spent in obtaining the services. The state of GSM services today is similar to what is obtain from Power Holding Company of Nigeria in terms of electricity supply. Least we forget, the reform in the telecoms sector is one of the tangible legacies left behind by former president Obasanjo after eight straight years of his presidency.

 

At issue is whether one of the new “infant” State-owned enterprises conceived and delivered by the former president Obasanjo’s administration can engage in providing retail-level end-to-end telecommunications and internet services to the Nigerian public or customers. That new baby is no other than Nigeria’s long awaited first commercial Orbital Satellite Telecommunication Company that goes by the acronym “NigComSat-1 Ltd.”

Least we forget, “NigComSat-1” is Nigeria’s US$311m custom-made acquired Space Science and Technology coming after another acquired Orbital Satellite named “NigeriaSat-1.” Launched from Plesetsk Cosmodrome in Russia in September 2003, NigeriaSat-1 is Nigeria's contribution to a network called the Disaster Monitoring Constellation of Space bound Satellites that share information with each other when disaster monitoring is needed. The Disaster Monitoring Constellation satellites, which cost less than $10m each, have been built by a British-based company, Surrey Satellite Technology. It is therefore one of former president Obasanjo’s prestigious projects which were commissioned using foreign loans.

 The recent controversy between the authorities of NigComSat-1 Ltd, which was commissioned in May 2007 and Nigeria’s Telecoms regulator – the NCC, started when the NigComSat-1 Ltd bosses expressed desire to offer cheaper retail-level telecommunications and internet services in the competitive Nigerian Telecoms and Information and Communications Technology (ICT) market that includes Global System of Mobile (GSM) telecoms services. The authorities of the NigComSat-1 Ltd appropriately applied for a 3G licence from the NCC in order to enter into the very lucrative telecoms and internet markets. Initially, the NCC asked NigComSat-1 Ltd to queue up as there are also other applicants on the waiting list for the only one License yet to be assigned or auctioned.

However, the NigComSat-1 Ltd bosses will have none of that from the NCC bosses as the NigComSat-1 Ltd bosses feel that the only remaining 3G licence should just be assigned to them as a matter of priority and in the sprit of national interest being a government-owned commercial entity. The NCC argument against NigComSat-1 Ltd attitude and behaviour was that “Due Process” must apply in all cases irrespective of public or private ownership. That is, the NCC insists that NigComSat-1 Ltd must queue up behind others who have similarly applied for the only remaining 3G Licence. This means that the procedure to be followed in giving the Licence will be open competitive bidding.

 

The counter argument by NigComSat-1 Ltd against the NCC “belligerency” as the NigComSat-1 Ltd bosses perceived the issue was that there was a Presidential approval for spectrum and frequency allocation already given by the former president Obasanjo to that effect before he left office and as such, NigComSat-1 Ltd does not require participation in any open competitive bidding in order to be assigned the 3G Licence to operate commercially at the retail end-to-end market - “Due Process” notwithstanding!

 

The next line of argument the NCC bosses put against the bosses of NigComSat-1 Ltd was that under the existing Regulatory Provisions of the NCC, NigComSat-1 Ltd cannot provide retail end-to-end telecoms and internet services. It can only provide wholesale commercial services to the existing licensed telecoms and internet services providers. However, the NigComSat-1 Ltd bosses countered this line of officialdom by insisting that it was within its bound to provide such services and pointed that the NigComSat-1 Ltd’s “Company memorandum and Article of Association clearly empower it to provide end-to-end solutions alongside satellite owner.” They have since punched a hole to the NCC’s officialdom argument by citing the case whereby another private Telecoms company that the NCC granted a license (i.e., Mubadala, a company wholly owned by the government of the United Arab Emirate) to operate telecommunications services in Nigeria is about to launch its own satellite to be managed by Al YahSat.

 

These arguments and counter arguments have assumed a nasty coloration as the exchanges have tended to become personalised as one party is already accusing the other of engaging in selfish and deceitful grandstanding. For example, the NigComSat-1 Ltd bosses have accused the Vice Chairman/CEO of the NCC, Engr. Earnest Ndukwe of personal conflict of interest on this matter. This is a serious indictment that the Presidency, National Assembly and other relevant agencies of the government need to urgently investigate in the national interest.

 

Understandably, one of the reasons why the NigComSat-1 Ltd bosses are desperate in wanting to enter into the very lucrative retail markets of the Telecoms and internet services is to be financially solvent in order to repay the over US$300m secured from the Chinese government for designing, fabricating, launching and commissioning of the communications Satellite. The NigComSat-1 satellite was manufactured by the China Academy of Space Technology (CAST) and carries 28 transponders to cover the whole of sub-Saharan Africa, addressing its needs for telephony, broadcasting, direct-to-home television, Internet and other services. Its design is based on China's latest satellite platform - the DFH-4 satellite platform. The satellite is designed with a mission life of 15 years and weighs about 5,100 kilograms.

 

Nevertheless, the main problem facing the bosses at NigComSat-1 Ltd is the issue of financial sustainability and relevance as it faces bleak future regarding its ability to repay the loan contracted to design, develop, fabricate and commission the Satellite. This worrisome development concerning the future of NigComSat-1 is further compounded by its inability to be internationally competitive. For example, just recently, the bosses at the National Space Development and Regulatory Agency of Nigeria (Nasdra) requested for a whooping $100 million from the Federal Government to buy shareholding in the Regional African Satellite Communications Organisation (RASCOM), a pan-African satellite organisation that plans to provide Africa with similar satellite services like those of NigComSat-1 Ltd for relaying telephone, data and TV signals.

 

Rascom, which represents the interests of some 38 African telecoms operators and other investors, had in 2000 formed a commercial entity, RascomStar-QAF, which plans to launch the first African satellite covering the whole continent later this year. Ironically, in justifying the request for funding, Nasdra bosses cited a potential threat to marketing capacity on its own already launched Nigcomsat-1 and hopes to assuage this by buying stakes in the pan-African venture. To achieve this, Director-General, Nasdra, Dr. Victor Borroffice, while making the request to government, cited the challenge posed in selling Nigcomsat-1's capacity because of perceived competition from the continental spread of Rascom. This is where the problem lies. How come the bosses at Nasdra did not factor this issue into their permutations before committing Nigeria into going solo on the NigComSat projects? This is a pathetic situation and no wonder the NigComSat-1 Ltd are desperate and can resort to all sort of blackmails to have their way.

 

Apart from the bitter bureaucratic bickering going on among these two federal government owned agencies, the serious national concern that President Yar Adua need to address in this very vital economic sector is the public policy muddling going on in the sector and if urgent policy rethink and actions are not done, the integrity and dynamism of the sector will be seriously undermined. In one of my previous analysis of the public policy crisis facing the sector, I pointed out some key areas that need serious Presidential attention. I will re-visit them in order to place the ongoing degeneration of exchanges between the authorities of NCC and NigComSat-1 Ltd., respectively in proper public policy perspective.

 

First, there are serious policy and functional overlap between the following federal government ministries and agencies under them: Federal Ministry of Science and Technology, its parastatal – the National Space Development and Regulatory Agency of Nigeria (Nasdra) and the Federal Ministry of Communications and its parastatal – the Nigerian Communications Commission (NCC). These governmental bodies are involved in the development, management and regulation of the telecommunications and information, communications and technology (ICT) sectors. However, in recent times, they have been working at cross-purposes, thus creating unnecessary friction For example, the Federal Ministry of Science and Technology is gradually intruding into the statutory functions of the Federal Ministry of Information and Communications by owning Telecoms and ICT infrastructures and providing wholesale (and soon retail level) Telecoms and ICT products and services. Thus, the Federal Ministry of Information and Communications is in conflict with the Federal Ministry of Science and Technology in the areas of Telecoms and ICT development, provision and regulation.

 

Therefore, there are a lot of policies that are at cross-purposes; conflicting and or duplicative in these public bodies and agencies. For instance, the Federal Ministry of Science now owns all the latest and newest Nigeria’s Communications and non-communications Satellites – taking control of all the newest public owned Space bound Telecoms and ICT infrastructures and also venturing into some land-based Telecoms and ICT infrastructures, products and services. For example, the following agencies and enterprises are all linked to the Federal Ministry of Science and Technology: i.) National Space Development and Regulatory Agency of Nigeria (Nasdra), ii.) NigeriaSat-1 (launched in 2003) and the public company established to run it and NigeriaSat-2 (to be launched in 2009), iii.) NigComSat-1 launched in 2007, iv.) Nigerian Information Technology Development Agency (NITDA), v.) Galaxy Backbone Plc, - which is the controversial national internet backbone and portal and vi.) Computers for All Nigerians Initiative (CANI), among others. These outfits have one thing or the other to do or share with the Federal Ministry of Information and Communications.

 

Nevertheless, the Federal Ministry of Information and Communications has been asked to relinquish through the instrumentality of privatisation, all it’s previously developed and owned Space bound and Land-based Telecoms and ICT infrastructures. For example, the privatisation of the Nigerian Telecommunications Limited (Nitel) with its flagship South Atlantic Telecommunications/West African Sub-marine Cable (SAT3/WASC) and other associated sophisticated telecoms assets, including its subsidiary GSM outfit – M-Tel Ltd. Therefore, one can easily notice a policy inconsistency at work here. For example, as mentioned above, on the hand, the federal government is vigorously pursuing privatisation of public sector telecoms assets and on the other hand, it is at the same time vigorously and busy establishing fresh new ones under another ministry: another area of conflicting and or contradictory public policy in the nations telecoms and ICT policies. This is where a Presidential review and intervention is urgently needed in order to put the chaotic situation in order.

 

Second, the nation need to be informed about the correct status of the working environments and inter-ministerial overlaps in the relationships between the Federal Ministry of Science and Technology and the now re-branded Federal Ministry of Information and Communications. This is to allow for presidential intervention in order to salvage the mess going on.

 

Third, public Policy wise, we need to know who does what, how and why as far as Telecoms and ICT development, promotion and delivery in Nigeria are concerned. We need to know who owns what, how and why in terms of Telecoms and ICT infrastructures. We need to know if NigComSat-1 Ltd can provide end-to-end retail services in addition to bulk whole sale services and how. We need to know the status of the controversial Galaxy Backbone Plc more especially in relations to the mandates of NigComSat-1 Ltd, NITDA and the Petroleum Technology development Fund (PTDF). We need to know if the existing privatisation Act exempts these newly established government-owned enterprises from going under the hammer.  Therefore, by the time these basic issues are resolved, a proper picture will emerge as to the correct and true positions of the following controversial agencies, programmes and projects: NITDA, Galaxy Backbone Plc, NigComSat-1 Ltd, and NigeriaSat-1 and other similar or related programmes or projects on the drawing boards.

 

In conclusion, it is sad to say that most of these creations that were done in the name of putting Nigeria into the 21st Century ICT revolution were basically political creations founded on national vanities rather than commercial logic. For example, multiple and or duplicative programmes, projects and agencies were created serving the same purposes and or providing the same products and or services. Compare and contrast the mandates and mission statements of Galaxy Backbone Plc, NigComSat-1 Ltd and NITDA and you would see the functional similarities are naked clear. Furthermore compare and contrast the mandates and mission statements of NigComSat-1 Ltd and the privatised Nitel Ltd and you would see a mirror image of Nitel Ltd in NigComSat-1 Ltd. Also compare and contrast mandates and mission statements of Galaxy Backbone Plc and Nitel Ltd and you would see the functional similarities are also naked clear.

 

Mind you, there are two Galaxy internet Backbone companies existing side by side in Nigeria today. There is the controversial Federal Government-owned (PTDF bankrolled) Galaxy Backbone Plc and there is another one pioneered by Nigeria’s ICT Czar, former Jigawa State Governor Ibrahim Saminu Turaki: Jigawa State-owned Galaxy Information Technology and Telecommunications Limited (GITT Ltd), with Head office at number 22 Adetokumbo Ademola Crescent, Wuse II Abuja – Nigeria (http://www.galaxyitt.com).

 

These so-called ICT initiatives were concocted because they are money guzzling programmes and projects in order to satisfy personal egos, create jobs for the boys and award foreign currency denominated fat contracts and foreign loans syndications. Paradoxically however, the bosses at Nasdra belatedly confessed to the fact that Nigeria will be better in terms of ICT products and services by buying into the Regional African Satellite Communications Organisation (RASCOM), a pan-African satellite organisation that plans to provide Africa with similar satellite services like those of NigComSat-1 Ltd for relaying telephone, data and TV signals. Ironically however, when it was commissioned the bosses told the World that “through NigComSat-1, Nigeria is expected to receive $400m from African countries for their international telephone traffic alone. It is expected to trigger further convergence in ICTs and cause a reduction in subscription rates of ICT related services.”

 

President Yar Adua has a number of options before him: to continue with them as full public-sector initiatives and continue to foot the bills – business as usual option; or ignore the call for more cash into these white elephant projects and allow them to survive or die as normal commercial business entities; or to shut them down and hand them over to the BPE to be auctioned to the most eligible and qualified Nigerian business moguls and oligarchs or foreign interests. Nigeria will be better served by picking and choosing from a wide variety of efficient private providers of Telecoms and ICT products and services in the globalise Telecoms and ICT markets without having to waste colossal amounts of hard currencies obtained via foreign loans in order to meet our national needs for ICT and Telecoms products and services. With the availability of services from private services providers at global, regional and national levels, offering increasingly capable alternatives and options, the only reasons to continue to keep these projects in public domain are political vanity, personal egos and jobs for the boys; shrouded under the cover and smokescreens of national security and national pride.