The good, bad and ugly of NIN-SIM regulation, 5G auction

As the year 2021 gradually coasts to an end, one of the sectors of the economy most affected by government policies and inaction has been the information and communications technology/telecoms sector.

From the suspension of sales of new Subscriber Identity Module (SIM) cards to compulsory linking of the National Identification Number to existing SIM cards (NIN-SIM) policy at a time of pandemic and then ban on Twitter operations in Nigeria by the Federal Government, the sector got a fair share of government’s hasty policies.

On December 15, 2020, acting on the instruction of the Federal Ministry of Communications and Digital Economy, the Nigerian Communications Commission (NCC) issued a directive titled “Implementation of New SIM Registration Rules” to all mobile network operators, to deactivate all SIM cards, which have not been linked to a valid national identity card in 14 days with effect from December 16, 2020.

According to the NCC, the consequences of non-compliance with this directive include the blocking of any SIM without NIN from the networks and the possibility of withdrawal of operating licenses of network operators.

The FG gave December 30, 2020, for the about 200 million SIM cards to be linked to NINs, at a time COVID -19 was ravaging. Due to the rush at registration centres, so many Nigerians contracted COVID-19.

Painfully, the NIN-SIM deadline has been postponed about eight times now, with the latest being this Friday, December 31, 2021, for Nigerians to link their NIN to their SIM cards or risk blockade.

At the genesis of this exercise, one of the benefits championed by the Minister of Communications and Digital Economy, Prof. Isa Pantami, for imposing the exercise on Nigerians, at a time the pandemic was fiercest, was to curb the escalating insecurity in the land. Though the National Identity Management Commission (NIMC) has been able to add 30 million NINs within a year to the already existing 40 million, the killings, kidnapping and banditry have further escalated, especially in the northern part of the country. This development has further questioned the minister’s rationale for the exercise.

Besides, the telecoms operators, a quartet of MTN, Globacom, Airtel and 9mobile collectively lost about 15 million telephone lines. Taxes that should accrue to the FG within this period were equally stalled.

Ban on Twitter further dragged the sector
As earlier mentioned, the Twitter ban was also one of the high points of the year for the sector.

Whether the ban is lifted tomorrow or next, or never, the suspension of the microblogging platform, would be among events that shaped the information and communications/telecoms sector of the economy. The ban, which came as a rude shock to the sector, and Nigeria as a whole, would hit 209 days by December 31.

The Federal Government had announced the suspension of Twitter operations in the country on June 4, after the social media giant deleted a post by President Muhammadu Buhari for “violation of the company’s abusive behaviour policy.”

By June 5, the suspension was implemented by telecommunications companies as Nigerians woke up to a Twitter shutdown across all platforms.

The pangs of the ban since then have impacted businesses, especially the Small and Medium-scale Enterprises (SMEs) and governments at different levels. They continue to bear the brunt of the suspension while the economy takes a hit. It also brought untold hardship on Nigerians, especially those in the online community. Largely, the suspension suffocated citizens’ rights to freedom of expression.

In his Independence Day anniversary speech on October 1, President Buhari had sounded like all outstanding issues had been resolved, directing the lifting of the suspension if the organisation meets the government’s conditions. In fact, many headlines had misled readers to believe the unbanning was with immediate effect. But almost seven months now, Twitter remains banned with costs spiralling.

According to the NetBlocks Cost of Shutdown Tool, Nigeria’s economy loses N104.02 million ($250,600) every hour to the ban on Twitter, bringing the daily loss to N2.46 billion. By the end of this year, it would have been 5,016 hours in the 209 days since the social networking site was blocked, and about N514.1 billion would have been lost by the economy.

In November, Minister of State for Labour and Employment, Festus Keyamo, said Twitter had conceded to conditions, including having a formal office in Nigeria, presented by the Federal Government for the lifting of the ban on the microblogging site.

Though so many Nigerians appeared to have moved on, exploring other social media platforms, those who have not, might have to wait till January 4, 2022, perhaps, at the seventh month of the ban, to see if the government will change its mind enough to lift the ban.

ICT sector boasts of 17.9% contribution to GDP
In the light of the NIN-SIM imbroglio and at a time the year witnessed sluggish economic recovery, the ICT sector increased its contribution to the country’s Gross Domestic Product (GDP).

At a forum in Abuja, Pantami said the ICT sector contributed 17.92 per cent to GDP in Q2, 2021 compared to 14.91 per cent in Q1 2021 and 17.83 per cent in the previous year.

The Minister, who had described the record as “unprecedented” in the history of Nigeria, commended the efforts of the parastatals and agencies under his ministry, including the Nigerian Communications Commission (NCC); National Information and Technology Development Agency (NITDA); NIMC; Nigeria Communication Satellite (NigComSat) Limited; Nigerian Postal Service (NIPOST); Galaxy Backbone and the Universal Service Provision Fund (USPF).

“A report was presented to President Muhammadu Buhari about the performance of the ICT sector in Nigeria in so many areas, particularly in that report Mr. president read that the performance of the ICT sector in the second quarter of 2021 by contributing 17.92 percent to our nation’s gross domestic product (GDP) is unprecedented in the history of Nigeria and ICT as a sector.

“Then Mr. President minuted the content to me by just saying honourable minister, communications and digital economy, he underlined it and said well done. He signed and dated it. That is just the content of the letter — just well done. And I read it, I said this is just the message. And I think this is not just for Isa but rather for all the stakeholders.”

20 years of telecoms revolution
Interestingly, this year, Nigeria also celebrated 20 years of the telecoms revolution. The telecommunications revolution that transformed Nigeria in different ways coincided with the dawn of the new millennium.

A breakthrough in telephone infrastructure emerged in January 2001 when the sector was totally liberalised, paving the way for the licensing of private telecoms operators to offer telephone services previously the exclusive territory of the government-owned Nigerian Telecommunications Limited (NITEL) and its subsidiary, M-Tel, which had attempted to offer mobile, albeit analogue services.

The licensing of private operators was the result of a week-long spectrum auction, code-named Digital Mobile Licensing (DML) Auction, which took place in January 2001, in Abuja, and was conducted, by the NCC, under the leadership of Dr. Ernest Ndukwe, during the era of President Olusegun Obasanjo.

The auction exercise climaxed on January 19, 2001, with Econet Wireless, MTN and Communication Investment Ltd (CIL), announced as winners.

However, each company, having paid a non-refundable deposit of $20 million to enter the auction, was required to pay a balance of $265 million within 14 days, for the total license price of $285 million, to formally issue the licence – or forfeit the earlier deposit.

While Econet and MTN met the payment deadline, CIL failed to fulfil the obligation; and its license became encumbered – or forfeited. M-Tel, however, had its license awarded to it on a platter – being a government company at the time.

Thus, Econet and MTN paid $285 million each into the Federal Government coffers as Digital Mobile License (DML) fees. The licences were valid for 15 years, and the government raked in over $800 million at the time. They deployed commercial service in August 2001.

Today and notably, Nigeria moved from meagre 400,000 NITEL lines in 2001 to over 300 million connected telephone lines within the space of two decades. The sector has equally seen over $80 billion investments, both foreign and local within this period.

Nigerians as part-owners of MTN
Consolidating its 20 years of pioneering the GSM revolution in Nigeria, MTN offered Nigerians opportunities to become part-owners.

This is coming after years of hold on the Nigerian arm by the South African parent company. It decided to reduce its 78 per cent hold on the Nigerian arm to 65 per cent. It offered 575 million ordinary shares to the Nigerian populace. Precisely from December 1 to 14, interested Nigerians, especially the retail public were handed the opportunities to buy into MTN.

MTN Nigeria’s public offer was the first to be delivered digitally in Nigeria, sold to retail investors at N169 per share. The offer was the first from MTN since the 2019 listing on the Nigeria Exchange Limited (NGX) and the company took advantage of digital integration to ensure substantial participation from investors across Africa’s most populous nation.

Acknowledging the massive support from Nigerians over the years, MTN Nigeria Chief Executive Officer, Karl Toriola, said: “We are successful because of our customers. People who queued at the very early days of GSM to spend N20, 000 to buy SIM cards because it was a scarce commodity then, people who started making their calls under the umbrella, which we called call centres but gradually started to own their own mobile phones as the economy and GDP of this country improved and they started migrating from the small voice phone to now smartphones.”

5G auction produces MTN and Mafab Communications
For the telecoms sector, the icing on the cake, in terms of the event that shaped it, would be the successful auction by NCC and the Ministry of Communications and Digital Economy of the 3.5GHz spectrum for the Fifth-Generation (5G) network deployment.

This development came after various conspiracy theories that heralded the 5G network, both in Nigeria and other parts of the world, was adequately ironed out, with the fact remaining that there is no health hazard attached to the technology.

The 3.5GHz spectrum auction, which was conducted on December 13, at the Transcorp Hilton hotel, Abuja produced two winners in MTN and Mafab Communications. The two winners emerged at the 11th round of the bidding exercise. The two firms won the licence at a bid price of $273.6 million each, as against the initial $197.4 million reserve price. During the Assignment Stage, MTN offered an additional $15, 900,000 to lead and got lot one of the spectrums.

The Executive Vice Chairman, NCC, Prof Umar Danbatta had explained that the two winners entered into another stage of auction called the Assignment Stage, in order to determine the operator that would take a particular lot out of the two lots that were auctioned. He said the winners were expected to pay the full licence fee by February 24, 2022, and that the payment must be made in Naira denomination.

Indeed, the auction might have equally positioned Nigeria, among the countries that are ready for the next revolution in the global telecoms space. The Guardian