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00:00Meanwhile, it is countdown time to the deadline for the payment of upstanding debts by nine
00:06banks following the directive from the Nigerian Communications Commission to telecommunication
00:11companies to disconnect the unstructured supplementary service data codes of the affected financial
00:17institutions.
00:18Meanwhile, a proposed 30% to 60% telecom tariff hike is generating reactions.
00:25Tony Omopere, President of the Association of Telecommunications Companies of Nigeria,
00:29joins me now for more on these and around, and of course, talks around infrastructure
00:33investment.
00:34Tony, thank you for joining us today.
00:37Thank you for having me on.
00:38Happy New Year.
00:39Happy New Year to you too.
00:40Let's get right to it.
00:41The last time you and I had this conversation, I believe at that time, the CBN had just intervened
00:45on this issue of the U.S. as it could, and it looked like things were being resolved.
00:51But I guess that's still not the case.
00:54Why does this remain a bone of contention between the banks and the telcos?
00:59Well, I'm not sure if that is totally the picture because several banks have actually
01:05complied.
01:06So these nine banks are actually not all the banks in the banking industry.
01:11Several banks have complied and just the remaining banks that are still finding it's a challenge
01:15to comply to the directive.
01:17And a joint circular was actually issued by the NCC and CBN in December last year, giving
01:24this directive for these banks to comply.
01:27As you know, this has been an ongoing negotiation for several years, and I think the directive
01:32came into play in December, and several other banks have complied.
01:36So I think we hope that these nine banks will comply before the deadline so that consumers
01:43are not disrupted from services that they render.
01:46I mean, the talk suggests that there is a line of communication ongoing between all
01:52parties involved.
01:54Have these nine banks offered any explanation as to why there's been a delay?
02:01So far, nothing yet in particular has been mentioned, but I think some of these talks
02:08are still going on, how shall I say, between agencies.
02:15But like I said, several banks have already complied and this is just the remaining, many
02:20of the banks that are still having this issue to comply.
02:22Right, and now that the CBN and the NCC are involved, are you confident that going forward
02:29that this issue will not arise again, that there will be better communication channels
02:36and perhaps even a better system, the end-user billing system I believe that's being proposed
02:41will put an end to this issue?
02:45I believe so, because if you know, the circular that was circulated also had a framework for
02:50which this kind of bills will be generated and settled.
02:54So it's not just the circular to comply, but also a framework was put in place as regards
02:58to how banks will interact with the MNOs and ensure that this is a thing of the past.
03:04So once, I think the issue is just that the fact that this has been lying down for quite
03:09a number of years, so cumulatively is a big issue for some of these banks.
03:14But going forward, if these bills are settled as at when they are supposed to, it won't
03:18be something that will be so drastic or any bank will feel such a big issue in paying
03:24these fees, so to speak.
03:26Right, so hopefully this will be finally put to rest.
03:30Let's talk about the telcos themselves, and of course the top issue that has dominated
03:38the headlines as far as telcos are concerned is the proposed tariff hike.
03:43Now I want you to clear this up for us, what we've seen in the news is that telcos are
03:48proposing a 100% tariff hike, but we also know that the Minister of Communications and
03:53Innovation is proposing a 30 to 60% hike.
03:57So help us clear this up, help us understand which is it, and what exactly, what percentage
04:03of a hike telcos are proposing.
04:07Well ultimately the rise will be what has been approved by the regulator and the government.
04:14So in terms of what the percentage will be, we will just wait to see the outcome of all
04:22the engagements so far.
04:25Right now the issue is that even on the back of the news that this is something that's
04:30in the offering.
04:31You can see even from your news reports, MTN just recently succeeded in their CP issue.
04:36So this is necessary for this industry to continue to thrive, and the industry continues
04:42to need positive news.
04:44The fact that tariffs are going to be increased at all, I think is good news.
04:49The percentages are still being discussed.
04:52I think that a study was supposed to have been put in place to check the effect of the
04:55increase.
04:56We have already clamored that this increase will happen within the first quarter of this
05:00year so that some of these things will be able to benefit the consumer by the time the
05:06necessary infrastructure or investment comes in on the back of the rising tariffs.
05:10I know that this is still at a proposal level, like you said, but a 30-60% hike.
05:16If this happens, either 30% or 60%, to what extent will this move the needle for telcos?
05:21How much relief will you get in terms of how it affects your investments and how much you
05:28spend on operational costs, hedging against inflation, etc.?
05:35Personally, in my own view, I don't think it's that much of an increase, 30-60%.
05:41But be that as it may, the main issue is not just the increase now, but how can it be more
05:49fluent or fluid, so to speak.
05:52This issue that we have to have a long protracted period before we increase tariffs and things
05:59of that nature.
06:00These are private companies and they're subject to market forces.
06:03It shouldn't be something that should be held back or determined at particular periods.
06:12It's something that should be fluid.
06:14So I think the issue now should be, once we move past this 60-30%, whatever is approved,
06:20or 100% if the studies show that it's required, how can we ensure that tariffs could rise
06:27and fall if need be?
06:28Don't forget it's a competitive market.
06:30If there's more competition, some of these prices could come down.
06:35So it's not necessarily, the fixation should not be mainly on an increase of tariffs, but
06:40how can tariffs be managed appropriately to ensure that the consumer gets the benefits,
06:46the MNOs and continues to grow and invest, and the sustainability that the ministry and
06:52the regulator are pushing for the industry, it becomes more achievable.
06:56Right.
06:57Let's talk about the outlook for investments in the sector this year.
07:00Like you said, MTN has been successful in raising some money from its commercial paper
07:05programme, but in overall, broadly, across the industry, can we expect significant investments?
07:10What needs to happen for us to see significant investments into the sector?
07:17Well, for significant investment, we need more positive news as regards to the outcome
07:25of the, and the clamour for things that are surrounding the sector.
07:30For example, we know now that the critical national infrastructure is being put into
07:34place and the framework is being put, that's positive news.
07:37The fact that tariffs are being discussed and hopefully they'll be resolved very soon,
07:41that's positive news.
07:42So the outcome of, or the outlook for 2025 seems to be bright.
07:46As long as all these indices and these issues are resolved, that's why we keep on clamouring
07:50that they should be resolved in the first quarter so that people can have that confidence
07:53to invest.
07:54Don't forget, we still need to hit the broadband plans being set by the government and the
08:00regulator and we are still a bit far behind in terms of hitting those plans.
08:06So the outlook is, we are very bullish, we believe that once these issues and some of
08:12the other issues, which we already see indications that they are going to be solved, are done,
08:17then necessary investment will flow.
08:19Also government has already said they have interest in also being active in investing
08:24in the sector as well.
08:26So all those put into play, we see at least an upward trajectory 2025 going forward, but
08:34mind you, it's predicated on these issues being resolved.