Association laments effect of FOREX scarcity on telecom sector

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The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has lamented that the scarcity of FOREX is biting hard on the telecommunications sector.

ALTON Chairman, Mr Gbenga Adebayo said on Monday in a statement in Lagos that the exemption of telecommunications from items to be accorded priority in the allocation of FOREX by the banks had adversely impacted on the industry.

Adebayo said that the scarcity of FOREX had increased the operating cost of providing services in the industry.

He said that in the absence of local substitutes for its plant and machinery, the service providers were constrained to source FOREX from interbank market at higher rates.



According to him, the rates are higher compared to sectors like manufacturing, aviation and agriculture accorded priority in FOREX allocation at reduced rates by the Central Bank of Nigeria (CBN).

“Owing to the prevailing economic situation in the country, ALTON members cannot transfer the increased cost burden to the consumers, thereby contracting profitability and ability to make further investment to drive growth in the industry,’’ Adebayo said.

He said that the prevailing scarcity of FOREX had created unfavourable credit terms, making it very challenging for ALTON members to honour their obligations to foreign vendors as at when due.

Adebayo said that this had occasioned delayed payment to equipment suppliers and other foreign vendors who had now resorted to imposing unfavourable payment terms on service providers in Nigeria.



He said that some of the foreign vendors had issued `Notice of Disconnection of Service’ which could disrupt service availability with attendant impact on customers’ experience.

“This further underscores the need for an urgent action to be taken toward addressing the lingering scarcity of FOREX facing the industry,’’ the chairman said.

He said that the FOREX problem had led to delayed implementation of Network Enhancement and Improvement Initiatives.

According to him, ALTON members made commitments intended to ensure the implementation of National Quality of Service (QoS) Fixing Project.

Adebayo said that the project was a coordinated network investment plan supervised by the Nigerian Communications Commission (NCC) at designated locations nationwide over a period of time by the operators to ensure improved QoS.

He said that the continuity of this initiative was dependent on obtaining FOREX to import equipment required to carry out the intended National QoS Fixing Project.

According to him, if proactive measures are not taken to ensure easy access to FOREX, the project is likely to be adversely impacted, to the detriment of the citizenry and economy.

He said that if the issue of FOREX scarcity was not addressed, it was bound to affect the National Broadband Plan.

“The government in 2013 published a National Broadband Plan (2013 to 2018) intended to ensure the deployment of pervasive and ubiquitous broadband infrastructure nationwide.

“The plan is to facilitate the realisation of a fivefold increase in broadband penetration from six per cent as at 2012 to 30 per cent by 2018.

“On this note, the commission divided the country into seven zones and has licensed two Infrastructure Companies (InfraCos) for Lagos and North Central Zones to deploy metro fibre optic network.

“The commission recently published a notice on the commencement of the process for the licensing of remaining five InfraCos on Open Access Model for the deployment of optic fibre infrastructure broadband network in the other zones.

“The zones are the North East, North West, South South, South East and the South West of the country,’’ the ALTON chairman said.

According to him, it appears that the prevailing scarcity of FOREX has adversely impacted the deployment of metro fibre network, as the earlier licensed InfraCos are yet to make significant progress in their respective licensed locations.

He said that there was the need for strategic support to service providers by ensuring easy access to FOREX to import required equipment and undertake the pending projects.

Adebayo said that the support would ensure that operators fulfilled outstanding obligations to foreign vendors without further delay for the continued growth and development of the industry. (NAN)

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