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Elections will affect telecoms investment — Nnamani

Elections will affect telecoms investment — Nnamani

The Managing Director and Chief Executive Officer, Medallion Limited, Mr Ikechukwu Nnamani, talks about the impact of the coming elections on the telecommunications industry and other sundry issues in this interview with IFE OGUNFUWA

What is your impression of the telecommunications industry in 2018 and what should we look forward to in 2019?

I would say that 2018 has been a difficult time for the telecommunications market because of its ups and downs. 2019 should be better. The election campaign clearly affected the telecoms industry like every other industry. You know, anytime it is election period, about half of the year is spent on election-related issues and this year also would be affected until June. Though this is expected and not out of place. 2018/2019 should be looked at as a politically unstable year and apart from telecoms, business and everything are affected. But I am very optimistic that once the elections are over, a lot of things would pick up and we would see many new prospects.

What specific areas do you think will be affected by the election year?

Just investments; every time there is an election, investors are jittery because they don’t know how it would go. They don’t know if there would be policy summersault. Some invest based on specific government policy and as you are not sure the policy would continue, you wouldn’t want to make more investments. There could also be electoral violence that would disrupt the government. People are scared about that. All these affect investments in the election year.

Has a solution been deployed to address the interconnect debt in the telecoms industry?

It is still a work in progress; I sit on the board of the Association of Telecommunications Companies of Nigeria and I know that very recently ATCON was asked to come up with some solutions, which we offered to the regulator, as a way to address the interconnect debt. The regulator is trying to get the operators to pay up and is a work in progress but we believe that even if the whole amount that was reported as the interconnect debt is paid, it is still going to accumulate.

So ATCON has proposed that an electronic settlement scheme for the industry be adopted such that the process is automated and not within the control of individual operators to decide when they pay because we are predominantly a prepaid environment. The subscriber is paying the bill so why can’t the operators extract a part of that? That is what the recommendation is based on. It’s still a work in progress.

Is this debt in any way affecting business activities?

Of course, for operators that offer services or are being owed, it makes it difficult for them to operate.

Imagine you are being owed N10bn but you have to go to the bank to borrow at a high interest rate just to be able to stay in business. Of course, it is going to affect you. Furthermore, it doesn’t create investor confidence because they would be concerned about how you would be able to recover the money even if you generate the revenue. So, that is definitely having a negative impact on the business climate.

There were reports and predictions in the last two years that revenue from voice calls would fall. Have you seen the confirmation of these reports?

Not really. I don’t think the revenue is falling; I would rather say that our subscriber base has increased and is on the increase. If the revenue is going to fall, I have not noticed it happening. The key point is the subscriber base is still increasing and the volume of calls is increasing still. The revenue, by default, is on the rise.

We still have data centres concentrated in commercial areas like Lagos, Abuja and Port-Harcourt. What is hindering the spread of data centres to other states in the country?

I think it is still a new area; data centres have just very recently started gaining grounds and people are trying to focus on the bigger cities. Ultimately, it would spread. I am a believer that it is important to localise content and not just at the national level as we keep saying, bring content back to Nigeria, but at the regional and state-capital levels. It takes time and costs money to build data centres. These are the things that are playing out whenever you notice delays or anything of such. Ultimately, there should be some good business in that regard.

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