NCC charges MNOs, ISPs on alternative energy as diesel cost spikes

• Danbatta insists no hike in telecoms tariffs, claims FOREX will be available soon
• ALTON claims service downtime is a general issue, says no discriminatory pricing

As telecoms operators battle with rising energy costs, especially diesel, the Nigerian Communications Commission (NCC) has called on mobile network operators (MNOs), Internet Service Providers (ISPs), Towercos, among others to switch to alternative power source in the meantime.

Noting that the Federal Government is doing everything within its means to solve the energy crisis in the country, the Executive Vice Chairman of NCC, Prof. Umar Danbatta, said renewable energy, including solar have been recommended to MNOs, ISPs, among others to deploy, pending when diesel cost comes decline in the cost of diesel .

Findings showed that towercos and other telecoms service providers have been battling high energy costs in the country for about three months. With this rise, The Guardian gathered some of the towercos are rationing diesel at their sites to ensure services remain on. This rationing appears to have contributed to the drop in service quality, both voice and data in some particular areas.

Confirming the energy crises, statistics from the National Bureau of Statistics (NBS) showed that the average price per litre paid by consumers for automotive gas oil (diesel) rose the highest within the second quarter, with the average retail price of diesel increased from N539.3 in March to N671.1 in May.

States including Ekiti, Osun and Oyo witnessed the highest growth in price at N716.15; N716 and N703.33 respectively. The states with the lowest average retail price are Yobe (N560), Bauchi (N560) and Delta (N624.44).

Zone analysis showed that the average price of diesel was highest in the South West (N730.60), whereas the North East had the lowest price of N639. At many petrol stations in Lagos, the price of diesel ranges between N700 and N815 per litre.

But Danbatta, at a post-event interview in Lagos, yesterday, said: “MNOs and ISPs have been urged to look for alternative sources of energy for now so that services can remain afloat. They need to come up with new business cases. You cannot rely on the same business case and expect a different result. We need to be innovative, collaborative, engage each other and find how we can solve the challenges before us so that the growth of the sector is not stalled. I am for alternative energy supply so that we can ensure that the sector remains vibrant and continues to provide services for Nigerians at affordable cost.”

The NCC EVC reminded that the energy cost cuts across all the sectors of the economy, stressing that aviation, transport, manufacturing sectors and homes are feeling the impact as well, “we must find alternatives to stay afloat as an industry.”

On the planned increase in telecoms services cost, the NCC EVC reiterated that it is difficult to just increase tariffs in the sector, stressing that “Doing such will amount to doing things anecdotally. We normally do things scientifically at NCC. We engage the services of consultants that are experts in the area of cost based studies to study each and every segment of the sector and come up with recommendations as to whether there is a need for an increase in the cost of services in that particular segment. Even before we come out with any determination, we usually ensure stakeholders’ contributions. Before you can force new tariffs on citizens, you must subject the matter to a stakeholder meeting because consumers must have a say in the matter.”

He disclosed that last week, stakeholders met with Minister Pantami, “who assured that the ministry is meeting with the Central Bank of Nigeria to ensure FOREX is available to operators in the sector to ensure services remain afloat.”

In a telephone conversation with The Guardian, the Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON) Gbenga Adebayo, said service downtime is a general issue, not necessarily having to do with diesel cost or rationing.

Adebayo said some variables are responsible for service downtime depending on the part of the network where the user is at a point in time, stressing that it could be fibre cut, vandalism, closure of particular sites by government, which has subsequently affected other sites. “One will not be right to place downtime on high cost diesel or short supply. The problem of high cost of diesel is mostly impacted by Towercos and did you know that they provide these services to the operators with lots of them on long term contracts.

The issue to be worried about now is how the towercos will survive because they are the one mostly impacted by this high cost. So, if they need to service the industry, their concerns are also industry concerns. Most of them signed a Service Level Agreement with the telcos on a long term basis, which equally attract sanctions on default without them preparing for some of the experiences in town now.

“So, I am not blaming the immediate problem on high cost of diesel, but on general factors affecting quality of service, but expressing concerns about the towercos, which are committed to supporting the industry without any consideration for the crises now. No doubt, the situation calls for concern as it affects the entire country and the telecoms sector is not insulated from the economy.”

According to him, despite the challenges, services will be available and rendered on a non-discriminatory basis, available at all time and at every places and at the same rate as before.

The ALTON boss however, called on the Federal Government to attend to the challenges the economy is facing as fast as it can, so that the country can continue to move forward.