Xenophobia: How reprisal attacks, infrastructure vandalisation affect Nigeria’s $38bn telecoms market

In the last two decades, telecommunication has grown in leaps and now forms the superstructure of modern lifestyle, social and economic practices.

Virtually all the financial transactions, mobile money and mobile banking are made possible by the infrastructure and platforms provided by the telecom industry.

The current vibrant social media industry is also made possible by the platforms provided by the telecom industry. The telecom and ICT industry currently contributes about 10 per cent to the GDP of this country.

Adverse practices towards telecom

The positive impact of telecommunications, going by these measures, cuts across social lives, families, businesses, governance, security, and even international relations.

This means that adverse practices towards telecom will hurt the industry and impact very negatively on the economy. Recently, acts of wilful destruction of telecoms infrastructure, cutting of fibre optic cables and general vandalism have become so rife that it is becoming very worrisome.

Sealing up of base stations are becoming common place irrespective of its social implications, including that of cutting off subscribers from communicating with loved ones. Each time any of these happens, the primary effect is that the quality of service drops and the country’s over $38 billion telecoms market loses a fraction of its value and comes under threat.

That is what seems to be at play in the reprisal attacks against the renewed xenophobic attacks on Nigerians in South Africa. Industry practitioners are worried that the outcome of these reprisal attacks could mean more harm to the Nigerian economy, considering the level of destruction and losses recorded by the victims at the end of the day.

Although some of them believe that the protesting Nigerian youths may have genuine reasons for protesting against the attacks in South Africa, they also expressed concerns that the current threats to close down South African businesses in Nigeria including MTN, DSTV and Shoprite among others, seems to have too many consequences for the economy.

For instance, four days after the National Association of Nigerian Students, NANS, took their protest to MTN office in Maitama, Abuja and other South African establishments, Hi-Tech checks reveal that the offices are yet to open shop for the usual day to day business activities. This could be probably due to fear of attacks.

Meanwhile, many customers are regularly seen clustering in vain, around the premises, in hopes of being attended to.

Infrastructure vandalisation

A frontline telecom analyst, Mr Nduka Odibo, who described the situation as horrible, said that it could take Nigeria quite some time to recoup the loss of any telecom company not opening its shops for days either as a result of infrastructure vandalisation or threat of it.

“We must understand that telecommunications is a catalyst for economic growth and with the precarious nature of our economy today, the least we could avoid is allowing these operators to close shop. Be it MTN, Globacom, Airtel or Etisalat, anyone that closes shop for days, adds to the lull in the economy and we can’t afford that. I was at Abuja a few days ago and the sight of once-busy MTN offices, now deserted did not give me any joy at all; not because of MTN but for the revenue, Nigeria could be losing as a result. We must learn to do away with acts that can affect our economy negatively” he added Odibo said that if the trend is allowed to continue, it would not only affect services of the affected companies but will surely affect the economy negatively, leading to loss of millions of naira.

Revenue Nigeria could be losing

“I don’t think that continued Xenophobic attacks in both South Africa and Nigeria will favour any of the two economies, so there is urgent need for the various actors to act fast to save the economies from imminent losses” he advised.

However, despite the challenges, MTN Group has also pledged confidence in the Nigeria telecoms market, promising to even inject more money into the sector.

The company which says it has invested well over $16 billion in Nigeria in the past 15 years and contribute an estimated 4.5 per cent to GDP, said it would continue to be an integral part of the Nigerian economic and social fabric. It promised to continue to invest in digital services, including e-commerce, digital media, mobile financial and lifestyle services, urging the Nigerian Communications Commission, NCC to avail it of more spectrums to be able to play optimally in the country’s digital mobile place. Group Chairman/Chief Executive, MTN, Mr. Phuthuma Nhleko, who led a delegation to the NCC headquarters in Abuja, said: “We have a very long way to go and so ask for spectrum which is the oxygen and life blood to navigate this long and tedious investment journey; without spectrum, the sector will suffocate.”

He specifically requested for more spectrum allocation and a release of that of Visafone, the CDMA company whose equity shares MTN acquired in 2015.

Financial services

He also canvassed for a more level playing field “despite being dominant player”. He said MTN has made its mark in voice and data services and that more services like mobile financial services are underway.

In his response, Prof. Danbatta welcomed the delegation and assured them that the Commission will always play by the rules and support every operator within the ambits of the law.

“I like to state that our word is our covenant. When we take decisions, we are concerned about the stability of the industry and there is no way we can guarantee it without considering the dominant status of MTN and its obligations and if the dominant status is becoming stringent, we are open to engagement, we will be guided by what is happening in the market, to ensure the growth and development of the sector”.

He said, “the sector has contributed very well to the National Gross Domestic Product (GDP) and has shown remarkable resilience in this recession.”

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