Telecoms firms are challenging the right of state governments to impose operational levies and fines on them. STANLEY OPARA looks at the issue
No doubt, telecoms assets are spread across the 36 states of the federation and the Federal Capital Territory. By law, the NCC is saddled with the responsibility of regulating the industry and its diverse players.
All things being equal, the role of the NCC as the sole regulator is seen as unquestionable and paramount. But happenings in the industry have shown some degree of side regulation by other government agencies, especially at the state level.
This scenario has lasted for a long while, and has continued to dominate discussion as some see this as multiple regulation of the industry.
Some believe that the critical nature of the industry and its complexity have warranted the duplication of regulatory roles and the likes; while in some quarters, it is believed that the perceived profitability and boom of the industry has been the attracting factor for some states.
The telcos have on many occasions protested against the various levies, fines and penalties by the state governments following the attendant cost implications on their operations.
With the states still maintaining the status quo and reeling out the operating conditions for operators, there have been calls from them (operators) to the regulator and the Ministry of Communications Technology to harmonise the levies and put things in perspective.
Now, states play a major role in determining the amount payable for acquiring the Right of Way to station telecoms infrastructure. In some states, telecoms firms pay levies for stationing base stations and mounting towers.
Operators have in the last few years listed the challenges confronting and limiting their ability to deliver effective quality services as multiple regulation and taxation; illegal access denials and site shut-outs.
Others are lack of incentives to drive service penetration to remote and rural areas; rent seeking charges for permits and approvals necessary for deployment; and insecurity.
The Minister of Communications Technology, Mrs. Omobola Johnson, said at the last quarter of 2013 that her ministry and the Works ministry had developed new Right of Way guidelines for federal roads to enable the operators to have unencumbered means of laying fibre optics, which was critical for infrastructure development and quality of service.
To remove arbitrary charges and eradicate multiple taxation impeding telecoms development across the nation, she said for the first time in the history of Nigeria’s telecoms revolution, her ministry had got state governors and relevant authorities at the state and federal levels to address the issue and adopt measures to remove such charges in order to enhance service delivery across the nation.
Using Lagos State as a case study, the minister noted that at a meeting behind closed doors with Governor Babatunde Fashola of Lagos State, the ministry facilitated a landmark agreement to remove constraints to the installation, rollout and deployment of base stations and fibre optic cables in the state.
She said the state government at the meeting agreed to reduce taxes and levies by over 40 per cent, and the Right of Way fee was reduced from N3,000 to N500, a reduction of over 85 per cent.
But some days ago, the minister also complained that getting state governments from different political parties and interests to implement federal policies on broadband could be another challenge before the Ministry of Communication Technology and other stakeholders in developing infrastructure.
Although the National Economic Council, which include the state governors, had agreed to crash the cost for the Right of Way, the state governments, she hinted, were currently not showing the required commitment in the area of implementation of the agreement.
Johnson noted that in the case of Lagos State where the ministry had recorded a landmark achievement for the Right of Way, it had to work with the ministries of Work, Science and Technology and urban regulatory authority.
The minister said, “When it comes to implementation, there is no commitment from the states.
“It becomes difficult to implement a policy when we have to work with different state governors from different political parties and with different agenda as well as different players in the 36 states of the country.”
Describing as huge the task of getting all 36 state governors to key into the general technology plans of the Federal Government, she said, “What most states are concerned about is the need to increase the revenue base of their states.”
To this end, the President, Assocaition of Telecoms Companies of Nigeria, Mr. Lanre Ajayi, said another problem that the telecommunications industry was saddled with was the desire of the Federal Government, state governments and local governments to regulate the telecommunications industry.
Heavy taxes imposed on telecom companies at the federal, state and local government levels, he explained, had become major obstacles slowing down network expansion, thereby compromising quality of service.
He said, “In the case of telecommunications, it is the Federal Government that has the exclusive right to regulate the industry which led to the establishment of the NCC backed with an Act to effectively perform that function. However, events in the recent past suggest that other federal agencies as well as state and local governments are now making efforts to usurp the NCC’s functions in the telecommunication industry.
“It has become a common practice for any government agency, federal or state, to solicit for one levy or the other from operators while some demand that operators must secure approvals from them, which come with very high fees, before they can build infrastructure.
“The list of taxes and levies from state and local governments include but not limited to planning permit fee, tenement rate, business premises registration fee, effluent discharge fee, Environmental Impact Assessment fee, advert rate and site analysis report fee.”
Late last year, the Lagos State Urban Furniture Regulatory Unit warned that the December 31, 2013 deadline given for the evacuation of all hollow pipe telecoms masts in the state would be enforced.
It threatened to commence comprehensive evacuation from January 1, 2014 should owners of the masts fail to evacuate them after December 31.
The need for the replacement of the hollow pipe telecoms masts with galvanised steel masts, according to the General Manager, UFRU, Mr. Joe Igbokwe, was as a result of the incessant collapse of the masts at the slightest wind storm, killing innocent people and destroying property.
Igbokwe, who expressed dissatisfaction over the attitude of masts users in the state, had said they refused to adhere to the directive of the state government since the warning was issued months ago.
Some days ago, the Lagos State Government threatened to impose a fresh sanction in the form of fine on all telecoms operators that failed to submit the accurate list of their masts.
Igbokwe said, “The state government is worried by the discrepancies in the figures of masts submitted by some of the operators, and the refusal of other operators to submit any list.”
The UFRU is the Lagos State agency responsible for the supervision of all installed infrastructure in the state, including telecoms masts.
Igbokwe said the UFRU would henceforth embark on the numbering of all telecoms masts in the state, and warned that any operator whose figure varies from the actual number of masts it operates in Lagos, would attract a penalty of N5m per mast.
Giving reasons why operators have to submit lists of telecoms masts in the state, Igbokwe said the idea would help the state to monitor and supervise all existing and new masts in the state.
According to him, the recent agreement reached between the operators and the state has reduced the cost of existing masts permit to N600,000 and new masts permit to N850, 000 per mast.
Each mast has a yearly renewal fee of N30, 000.
To this end, the Chairman, Association of Licensed Telecoms Operators of Nigeria, Mr. Gbenga Adebayo, said the telcos and state governments often clash over issues regarding the regulation and permits for the Rights of Way, site building approvals and compliance management.
He, therefore, urged state governments to remove all barriers to network rollout and network expansion and eliminate all issues around high approval charges and multiple taxation.
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