In an interview with Nairametrics, Gbenga Adebayo, Chairman of the Association of Licensed Telecoms Companies of Nigeria (ALTON) – which comprises Nigeria’s largest GSM operators: Glo, 9Mobile, Airtel, MTN Nigeria, and Ntel – discussed a wide range of issues including the telecommunications Financial Inclusion Committee, outlook for the industry in 2019, and challenges telecommunication firms face in Nigeria.
What, in your opinion is the most pressing issue telcos are facing in Nigeria?
Telecommunications is a capital-intensive, fast-paced and dynamic sector. Technological advancements and Nigeria’s gradual transition to the digital era is driven largely by broadband infrastructure provided by the telecommunications industry.
However, telecom operators are facing increasing challenges in this digital era. Threats from Over-The-Top players (OTTs) such as WhatsApp, Skype, Google, social media messaging applications (Facebook messenger, etc.) who provide communications services locally without local operating licenses or being subjected to local regulations and taxes (like telecom operators). These create an avenue for the erosion of traditional telco revenues.
In addition, the sector is also not insulated from Nigeria’s economic challenges as the weak macroeconomic conditions have led to reduced disposable income, adversely impacting Average Revenue per User (ARPU) and increased cost of accessing foreign exchange to sustain investments in the sector.
One of the most significant challenges is particularly in relation to multiple taxations and increased regulatory interventions. Telecommunications operators are increasingly challenged by regulations, guidelines, rules and directives issued by government agencies with insufficient understanding about their operations. This results in unintended consequences which stifle innovation and business growth.
While the sector is not averse to regulatory interventions, such interventions should (where necessary) be minimal and leave room for self-regulation. An impact assessment should precede regulatory interventions and such interventions should contain the barest minimum required to address a deficiency.
Policies introduced should be market-friendly and regulatory frameworks as well as approval processes should be simplified and not cumbersome. Given the potential of the sector to increase its GDP contribution (which currently stands at about 10%), ALTON advocates for a special focus on the sector by the Presidential Enabling Business Environment Council (PEBEC) to improve the sector’s business environment and ensure sustainable economic gains for the country.
What are your thoughts on the new Value Added Services (VAS) rules released by the NCC?
The VAS aggregator-licensing framework essentially redesigns the VAS delivery ecosystem and redefines stakeholders’ roles in the VAS ecosystem. We acknowledge and appreciate the NCC’s desire to remedy the prevalence of complaints of unethical practices in service delivery.
However, the framework far exceeds the mischief it seeks to address and delves into market structural issues. It restricts the participation of some of our members in the VAS sector despite the fact that the Unified Access Service License permits them to do so.
You’ll recall that, in 2006, the NCC introduced Unified Access Service Licensing (UASL), to align with global best practices in efficient licensing processes as endorsed by the International Telecommunications Union (ITU).
Thus, rather than have a multitude of individual licenses for digital mobile services, fixed telephony services, gateway services etc., regulators began to issue a single (unified) technology and service-neutral license; this authorised operators to deploy services using any type of communications infrastructure and technology capable of delivering the desired service. This Licensing Framework allows UASL holders to provide VAS.
In view of the fact that the licensing framework formed the basis of operators’ decision to invest in the UASL and their valuation of it, it is quite clear that any subsequent regulatory interventions, which affect the scope and terms of the UASL, should involve open conversations with license-holders.
The implications are quite worrisome when viewed in the light of how digital content delivery (which is at the heart of VAS and from which telcos have been excluded) forms a significant chunk of telco growth and a significant development opportunity, especially as revenue from voice and SMS continues to decline.
According to research by Ovum (a world-renowned, market-leading data, research and consulting firm), data and digital services represent the main growth prospects for operators in Africa and should be central to their strategies. The restrictive nature of the NCC’s VAS aggregator licensing framework, therefore, portends serious danger for the investments, operations and their aspirations of the industry.
Given that the NCC’s regulatory intervention is premised on commendable objectives, as well as the fact that there is room for improvement in the existing VAS delivery experience, our recommendation is that a more open conversation and consultative engagement process be put in place by the NCC. This will ensure that the NCC is able to achieve its objectives and secure the confidence of all stakeholders in the VAS delivery experience without mortgaging the long-term future of the service sector and indeed that of the entire industry. ALTON has made its position known to the NCC on this issue and it is our expectation that it will review its decision in the overall interest of the industry.
Big telcos are going into Fintech (9pay) these days, what future does this portend for small players in the industry?
As mentioned earlier, data and digital services represent the major prospect for future growth for telecommunications operators on the continent and should be the key focus area. The possibilities and opportunities span a wide area, which includes the development of services & content, distribution and co-branding. Paga, a notable Fintech company recently celebrated hitting 10 million customer mark after 6 years of operation. This is indicative of huge growth potentials in the Fintech space, which is still at its nascent phase.
Accordingly, and in view of the fact that the regulatory framework applicable to that sector is emerging, our view is that smaller players should look to opportunities for collaboration and partnerships with bigger organisations, in order to leverage the economies of scale for their long-term sustainability. As such, innovative deployments such as 9pay are a step in the right direction and a welcome development.
With MTN’s recent challenges with the government, do you worry about operators halting their investments?
Policymakers and regulators need to be more mindful of how their activities affects investors/investment. Existing and prospective investors are primarily motivated by empirical evidence. Where there are indications of an insecure, hostile or uncertain business climate, there is a high likelihood that investors will (at the very least) adopt a watchful approach to making further commitments until indicators are more favourable and provide greater comfort or assurance. It is important to note that Angola, South Africa, Egypt and Ghana are all competing for the same foreign direct investments that Nigeria seeks to attract, thus the portrayal of Nigeria as a friendly investment destination is imperative.
How has ALTON liaised with state governments to ease the challenges faced with right of way?
The National Economic Council resolved that state governments would adopt the same Right of Way (RoW) regime set by the Federal Government where RoW is N145 per linear metre. Despite this resolution, very few states (if any) have reflected the resolution in their pricing and this has affected the ability of telcos to roll-out affordable broadband infrastructure across the Federation.
ALTON has been extensively involved in engagement and discussion with relevant stakeholders on this issue. Right of Way remains one of the main cost drivers for building out broadband infrastructure, as it accounts for not less than 50% of the total cost of fibre deployment in the various states.
As such, our focus has been on securing the reduction or outright waiver on RoW costs on Federal, State and Local Government roads and ensuring a streamlined and fast-tracked RoW approval regime.
We commend states that have been supportive of ICT investments through the adoption of business-friendly RoW and we will continue to engage others to present our concerns and position. We acknowledge the leadership role that the NCC has played in the engagements with the State Government and hope it is sustained until the issue is conclusively addressed.
Do telecommunication firms have any pending legislation before the national assembly?
The current principal legislative instrument for the sector is the Nigerian Communications Act (NCA), which became law 15 years ago. In the intervening period, the telecommunications industry has experienced significant changes e.g. the advent of digital services, the introduction of OTT players, Value Added Services, etc. — these were not accounted for, under the current legislation. It has, therefore, become imperative for the current legislation to reflect these realities.
This is why our members have painstakingly made comments towards the review of the NCA, and we commend the National Assembly’s ongoing review of the NCA.
It is our expectation that the legislation upon finalisation will reflect current industry peculiarities; be business-friendly, innovation-focused; and will ultimately promote investments in the ICT industry. We have submitted our comments to the legislature on the Act and will continue to engage the legislature on the review.
While internet connectivity in Nigeria is one of the cheapest in sub-Saharan Africa, many Nigerians feel it can go much lower. What are the factors preventing telcos from doing so?
Retail data rates are determined by a variety of factors. As such, a conversation around whether or not these rates are expensive must occur within the context of service delivery and the associated factors.
Some of the critical factors to be considered are infrastructure deployment costs and the cost of accessing funds. From an infrastructure standpoint, RoW fees and broadband spectrum fees are key cost elements which are factored into data pricing, and typically, prohibitive RoW charges and spectrum fees affect retail rates of data services.
In the same vein, the high cost of accessing funds also contribute to the price levels for data services as the sector is not isolated from the general economic climate.
Ultimately, the price for data services could go down as the economic climate improves and the cost of doing business reduces.
What is ALTON’s take on the newly released guidelines on payment service banks (PSBs) by the CBN?
ALTON is of the view that the exposure draft on Guidelines for Licensing and Regulation of Payment Banks in Nigeria is a step in the right direction for deepening financial inclusion in Nigeria.
The framework is a paradigm shift as the CBN is seeking to permit MNOs (through subsidiaries) participation in the delivery of financial services to end users by leveraging their assets and resources, in order to enhance financial inclusion in Nigeria.
Despite our agreement in principle with the general features of the Draft Guidelines, we advocate for changes to some provisions capable of creating barriers for potential PSBs.
Some of these include:
• Recommending that the focus area of PSBs be expanded to cover all financially excluded persons across Nigeria living in both rural and non-rural areas;
• A downward review of the minimal capital requirement to N2 Billion to free up additional funds for aggressive investments;
• The requirement to provide evidence of a minimum capital deposit during the AIP phase can be deferred to the final license phase to provide comfort to the promoters.
• That PSBs be allowed to maintain 40% of PSB deposit liabilities in Federal Government Securities while the residue of 60% can be in bank placements.
• That CBN grants a BVN capture waiver for the opening of the PSB account and allow Tier 1 KYC requirement to be an acceptable standard.
• CBN considers collaborating with the NCC to allow MNOs to use subscriber information to satisfy the KYC requirement for PSBs, upon receipt of customer consent.
• CBN reconsiders its decision on differential pricing and arm-length dealing and permits PSBs and parent companies to devise an arrangement whereby the former can leverage the assets and resources of the latter to provide low-cost financial services to end-users.
• CBN collaborates with the NCC to address concerns around the fear of the preferential use of network infrastructure, allegations of denial of use of infrastructure; and poor service quality provision by MNOs, as highlighted by some stakeholders at engagements.
How will individuals and small businesses be able to key into the Telecoms financial inclusion committee roadmap?
Given the broad range of services which the CBN has now enabled (e.g. super-agent/distribution, payment service banks, micro-finance banking), we are of the view that there will be opportunities for individuals and enterprises to collaborate towards the ultimate goal of achieving the Federal Governments financial inclusion objectives.
The Telcos’ Financial Inclusion Committee was recently constituted by the industry to articulate, steer and provide guidance on how telcos’ can participate in driving financial inclusion initiatives and approaches which can deliver desired results for all stakeholders. We will, therefore, be making further pronouncements in this regard in due course.
What is your outlook for the coming year? What new developments are pertinent to the industry?
As 2019 is an election year, we anticipate a cautious/watchful disposition from investors in Q1 and even up to Q3 2019. Business owners will want to get some degree of clarity and certainty as to the direction/outcomes of the election and the economic agenda of the government in power prior to making any significant investment decisions.
Nevertheless, there are quite a number of impending developments which will enhance the impact of the telecommunications industry. 5G remains the most exciting development to look forward to.
Although discussions on 5G have accelerated in 2018, the roll-out of the service will be a multiyear journey. 5G technology will drive the adoption and accelerated developments of innovative solutions such as autonomous vehicles, Internet of Things and also media – VR and AR.
In Nigeria, telcos will continue to find ways to expand their 4G coverage while they start exploring new revenue streams in IoT and media. Investments in streaming services will be encouraged by the increased speed 4G provides.
Here is the exciting 2021 list of the richest football clubs in the world
Here’s Forbes 2021 list of the most valuable clubs in the world.
Billionaires are fond of investing in sports franchises. This is because there is a lot of money in it and the income stream is pretty consistent. Authoritative wealth watch magazine, Forbes yesterday released its official list of the most valuable clubs in the world.
It also gave a summary of the business side of the football world which we found quite interesting.
Nairametrics did a thorough review of the list and highlighted the parts which we believe will resonate well with our readers. Let’s get to it!
Top 10 richest clubs in 2021 by value
Tottenham hotspur comes in at the 10th position with a valuation of $2.3bn. The English club is owned by Joseph Lewis and Daniel Levy. They generated $494m last year.
Paris St Germaine comes in at 9th position with a valuation of $2.5bn. The French league 1 giants generated more money than arsenal last year. They generated $599m. PSG is owned by an investment group, Qatar Sports Investments.
Arsenal football club, another London side club comes in at 8th position with a valuation of $2.8bn. The club is solely owned by Stan Kroenke, an American Businessman who invests in sports and media. Arsenal generated $430m in 2020 making it the 8th most valuable club.
Chelsea football club comes in 7th on the list with a valuation of $3.2bn. The London side club has retained its longstanding owner Roman Abramovich, a Russian Oligarch. Chelsea generated $520m last year.
Manchester City (4bn)
Manchester City, an English club with a long history of billionaire owners comes in at 6th position. The very successful English club generated total revenue of $609m last year. The club is valued at $4bn and is owned by Sheikh Mansour bin Zayed Al Nahyan.
Liverpool comes in 5th at a $4.1bn valuation. The English club is the second wealthiest in England with a generated revenue of $619m. The club is owned by a joint partnership between Billionaire, John Henry and Tom Werner.
Manchester United (4.2bn)
Manchester United is the wealthiest English club on the list. The club is valued at $4.2bn, taking up the 4th position on the list. The club has been owned by a Jewish business family, the Glaziers for years. They are the largest shareholders and practically own the club. They generated $643m last year.
Bayern Munchen (4.215bn)
Bayern Munchen comes in at the third position with a value of $4.215bn. The German giants have bossed the German league for years. They generated $703m last year, coming in at the 3rd position.
Real Madrid (4.75bn)
Real Madrid Fc comes in at the second position. The football club which had previously dominated this list was edged out by bitter rivals, Barcelona. Real Madrid is valued at $4.75bn and the club is also owned by the club members. Real Madrid generated $729m, the same amount of revenue as Barcelona last year.
FC Barcelona (4.76bn)
Fc Barcelona is the most valuable football club in 2021 with a market value of $4.7bn. The club sits gallantly in the first position.
The Spanish giants generated a massive $792m in revenue last year and succeeded in holding on to their key player Lionel Messi. They also edged out Real Madrid and Man Utd who have dominated this list for 16 years. FC Barcelona is owned by the club supporters. It has no major shareholder or billionaire financier. The club has over 160,000 members forming its governing body.
What you should know
- 6 of the 10 richest clubs in the world are owned by billionaires; the rest are owned by club members and an investment group.
- In the last 16 years, the world’s richest football clubs list has been topped by only two clubs – Real Madrid and Manchester United.
- Football clubs generate revenues through advertisements, sponsorship deals, jersey deals and ticket sales. These are the 4 major revenue streams of a football club.
- The top 3 teams on the list – Fc Barcelona, Real Madrid and Bayern Munchen generated a combined revenue of $2.3bn in 2020.
UBA Business Series to equip SMEs with Performance Management Strategies for Organisational Growth
UBA has been assisting with essential tips to help businesses ensure that they stay afloat and remain thriving.
As part of its commitment to support the growth and sustainability of Micro, Small and Medium-scale Enterprises (MSME) in the continent, Pan African financial Institution, United Bank for Africa (UBA) Plc, is set to organise the next edition of its UBA Business Series.
The UBA Business Series which is a monthly event, is an MSME Workshop as well as a capacity-building initiative of the bank where business leaders and professionals share well-researched insights on best practices for running successful businesses, especially in the face of the difficult operating environment that dominates the African business landscape.
Through this initiative, UBA has been assisting with essential tips to help businesses re-examine their models and strategies and ensure that they stay afloat and remain thriving.
The topic for the next edition of the series is ‘ Managing Performance for Business Growth,’ and it will be held on Wednesday, April 14, 2021, via Microsoft Teams. At this session, the Managing Director, Secure ID Limited, Mrs Kofo Akinkugbe, will be sharing useful tips and insights on the key strategies of performance management to boost business growth.
Akinkugbe is the founder of SecureID Nigeria, a MasterCard, VISA and Verve certified Smartcard Personalization Bureau and Digital Technology company. She currently serves as the Managing Director/CEO, Secure Card Manufacturing, – a Smartcard manufacturing plant producing high-security identity cards and documents for the Banking, Telecoms and Public sectors across Africa and beyond.
The capacity-building event is a virtual session which is open to all – including business owners and leaders – and will be held on Wednesday, April 14th, 2021, at 2pm WAT. Interested participants can register via http://bit.ly/UBASMEWorkshopMarch2021
UBA’s Head, SME Banking, Sampson Aneke said of Akinkugbe, ‘with her vast experience garnered over the years from various sectors, she will help business owners understand how performance management strategies can be effectively implemented to ensure business growth’.
He emphasised UBA’s commitment and deep passion for small businesses, which according to him, remains the engine of any developing economy adding, “We know small businesses are the backbone of the economy in every country. In many climes, businesses with fewer than 100 employees account for 98.2% of all businesses. This no doubt captures the importance of SMEs to a thriving economy which is why UBA is committed to seeing them flourish.”
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Friesland Campina Wamco Nigeria Plc announces AGM, proposes dividend of N6.74 per share.
- ETI appoints Akin Dada as Group Executive, Corporate & Investment banking.
- Union Homes REIT proposes final dividend worth N465.03 million for shareholders.
- GT Bank Plc holds FY 2020 investors presentation.
- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.