Dedicated to Nigeria's socio-political issues
October 3, 2007 - December 2, 2007
ResolvingThe Interconnectivity Battle In Nigeria:
Mobolaji E. Aluko, PhD
Burtonsville, MD, USA
Sunday, November 16, 2003
In the world of telecommunications, which involves the transmission of one or more of voice, data (high-speed and low-speed), video, Internet and fax over short and long distances, there are three competing and complementary technologies: wired (copper, coaxial, fiber-optics), wireless (fixed, mobile) and satellite. Here, we eschew for now the valid divisions between terrestrial and extra-terrestrial technologies; between radio and microwave wireless transmission; and between analog (measured in frequency units of hertz) and digital (measured in bytes) transmission modes.
Obviously, the CONSUMER determines the TYPE (voice, data, etc. or a convergence of all of them) of transmission that he or she wants and at what speed (and clarity/resolution where necessary). In any given country, the current OPERATORS provide the technological means for a fee, presumably in a manner affordable, simple, flexible and transparent to all consumers so as to enhance their economic productivity and/or personal pleasure. In order to ensure that existing multiple operators play fair and square and act responsibly among themselves and to the consumers, and that they also act within articulated national interests (including national security), a single national REGULATOR (with possible regional subsidiaries) inevitably exists.
With respect to today’s Nigeria, Table 1 outlines the major telecommunications actors. It shows in our country of about 120 million people, NCC is the national regulator; there are currently two national operators (NITEL was the incumbent monopoly since 1963 until Globacom kicked in August 2003), and four mobile wireless licencees (most of them issued February 2001); and 22 fixed wireless licencees (issued in July 2002).
Prior to the entry of new operators, NITEL landlines were of the order of 800,000 lines, of which 500,000 were operational. Now, the total number of landlines and mobiles have risen to about 3 million in two years., and the potential is estimated to 42 million lines.
That would be a telecommunications explosion.
THE INTERCONNECTIVITY PROBLEM
Transmission requires at least two points, A and B (point-to-point PTP, as in traditional telephony), but could be point-to-multipoint (PMP; as in broadcasts) or multipoint-to-point (MTP; as in video-teleconferencing). The origins/destinations A and B could be persons or geographical locations or a mixture of both. We lose no generality in our discussions here if we confine our attention to PTP, and consider A and B as two human consumers wishing to transmit voice. [But again, please note that telecommunications involve voice, data, video, Internet and fax.]
Consequently, the interconnectivity problem within Nigeria is simply stated as follows: how can A and B, separated possibly by thousands of kilometers within Nigeria, transmit voice to each other without each having to be subscribers to the same operator? More importantly, how can we ensure FULL NATIONAL CONNECTIVITY such that if A is the originating consumer, it does not matter technologically (even if financially) which of ALL the other operators that B is a subscriber to?
Note that if A and B MUST be subscribers to the same operator to talk to each other, then there is in fact ZERO NATIONAL INTERCONNECTIVITY, and essentially what we would have is a telecommunications network comprised of separate PNLs ( Private Network Links.) For A to talk to B, C, D and E who are subscribed to different operators, therefore, he must carry at least four, possibly five different transmission equipments – to talk within his own network and to talk to each of B, C, D and E on different operator subscriptions. Situations like this are currently occurring in Nigeria, not really because of zero national interconnectivity, but due to experience-based zero trust in the existing limited interconnectivity.
Between zero national connectivity and full national connectivity is what I would term LIMITED DUAL INTERCONNECTIVITY, where private arrangements between pairs of operators exist for full connectivity between each pair. If for example Econet and MTN have dual interconnectivity between themselves and Globacom and NITEL have the same arrangement between themselves, then a mobile call within and between Econet and MTN – or between Globacom and NITEL – would be fine, but not between Econet or MTN and Globacom or NITEL.
Note that conceivably if EVERY PAIR had a dual interconnectivity arrangement with each other, then we would technologically have full interconnectivity. (See Figure 1)
The potential for a maximum of N combination 2 of such paired negotiations exist – or N factorial divided by 2 factorial divided by (N-2) factorial - where N is the number of operators. If N is 5, then there are 10 paired negotiations; if N is 6, then there are 15 paired negotiations etc. However, from Figure 1, it is also clear that if the N are connected in an outer ring with just N interconnections, then provided one is prepared to jump from switch to switch past different operators, full interconnectivity can also be achieved. If there are 2 National Carriers and N-2 operators, then if we presume that the carriers are interconnected to each other, and all the operators are connected to each of the national carriers (but not to each other), then there will be 2N-3 connections.
Note that the mere existence of CONNECTIVITY does not address the issue of quality of service – for example as in unavailable network signals, busy signals or dropped calls. For example, the line between MTN and Econet may be “fat” or “thin” depending on the number of trunk lines between their exchange offices. Thus, a dominant operator may deliberately limit the SIZE of interconnection between it and other operators in order to attract even more customers to its own network. One suspects that this is happening in the Nigerian scenario.
In 1934, the first Communications act of the USA was enacted, which read, in summary:
Sec. 151. - Purposes of chapter; Federal Communications Commission created
For the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, for the purpose of promoting safety of life and property through the use of wire and radio communications, and for the purpose of securing a more effective execution of this policy by centralizing authority heretofore granted by law to several agencies and by granting additional authority with respect to interstate and foreign commerce in wire and radio communication, there is created a commission to be known as the ''Federal Communications Commission'', which shall be constituted as hereinafter provided, and which shall execute and enforce the provisions of this chapter
Sixty-five years later, a new 1996 Telecommunications Act of the USA was enacted, depicting a move from REGULATION (after universal access and universal service had been achieved in the country) to DEREGULATION:
The stated purpose of the Act is: "to provide for a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening up all telecommunications markets to competition" (Conference Report, Telecom Act, 1996).
Proponents of the Act asserted that it would "stimulate the rapid deployment of an advanced National Information Infrastructure and catapult the United States into a dynamic new digital information economy (Conference Announcement, 1997, introduction).
Congress, however, designed the Act to address two more basic structural issues of telecommunications, i.e., "technological convergence" and Legal balkanization." Congress assumed that technological innovation is better fostered in the environment of converging media than through to isolated innovation within particular media. Congress intended the Act to establish three policies formulated to correct these perceived structural limitations:
(1) Eliminate existing industry barriers to entry
(2) Remove FCC control over market entry
(3) Limit "harmful competition" (Krattenmaker,1966, p. 49).
From the foregoing it is clear that the intent of Congress in passing the Act was to make information technologies available to the public at reasonable costs through open markets and free competition.
With respect to Nigeria, a National Policy on Telecommunications was produced in 1995, was approved and published in 1998, launched in October 1999, revised by presidential committee then re-launched in May 2000. A Telecommunications Act was then signed into law in July 2003, repealing Decree 75 of 1992 under which the Nigerian Communications Commission (NCC) was set up. Decree 75 of 1992 had the following objectives:
The mission of the NCC is to regulate the supply of telecommunications services and facilities; to promote fair competition; to set performance standards for telephone services; as well as to encourage the development of other sectors of the economy through the development of the telephone industry.
The Decree sets forth the functions of the NCC as follows:
· economic and technical regulation of the privatized portions of the telecommunications sector;
· determine the standards for safety and quality of telecommunications services;
· regulation of telecommunications services;
· provide advice and assistance to the entire industry;
· facilitate entry into market for services;
· promote competition within the telecommunications industry and advise the Minister of Communications thereof;
· protect the public interest;
· protect customers from unfair practices;
· develop performance standards and indices regarding the quality of telecommunications services;
· issue telecommunications licenses; and
· monitor holders of licenses.
The broad objective of the Telecommunications Act 2003 is to
" create and provide a regulatory framework for the Nigerian Communications industry and all matters related thereto and for that purpose and without detracting from the generality of the aforementioned.”
Further information on the National Policy on Telecommunications from which it is derived is pertinent:
The overriding objective of the National Telecommunications Policy is to achieve the modernization and rapid expansion of the telecommunications network and services. This will enhance national economic and social development, and integrate Nigeria internally as well as into the global telecommunications environment. Telecommunications services should, accordingly, be efficient, affordable, reliable and available to all……………..
Imperative of Competition
The Federal Government of Nigeria will actively liberalize the telecommunications market and encourage the participation of the private sector at all levels. Accordingly, the Nigerian Communications Commission (NCC) will be charged with the responsibility of issuing licenses to all telecommunications operators, assignment of frequencies and numbering, and establishing and enforcing regulations that ensure fair and equitable competitive practices among all telecommunications operators…………
The achievement of the goals of market-based competition in telecommunications requires that every operator has mandatory access to technically adequate and economically efficient interconnection with all other operators, especially those operating long distance and local access facilities. It is the responsibility of the NCC to ensure that such interconnection is available on a non-discriminatory and cost-oriented basis to all licensed operators. The Commission shall therefore establish a transparent set of Interconnection Rules, which shall encompass at least the following requirements:
* Every operator must allow all other operators full interconnection to its network at technically feasible and convenient points of interconnection, such that traffic may originate on one network and terminate on another, or otherwise pass across networks, without interference, signal deterioration, delay, or restriction
* Any payments for interconnection or access services between operators should be based on the actual costs of such interconnection, and must be applied in a non-discriminatory and competitively neutral manner.
To the extent possible, the Commission shall mandate the voluntary negotiation of interconnection agreements among operators, in keeping with the above principles. The Commission shall nevertheless review all existing interconnection agreements to ensure that they meet these conditions, international best practices and consistent with other interconnect agreements in the industry.
For those situations where negotiated agreements are unduly protracted, the Commission shall serve as arbitrator of interconnection terms and conditions.
It shall establish a standard set of default interconnection terms that shall serve as the basis for defining operator relationships, subject to modification in the course of negotiations. The NCC shall also publish clear and appropriate studies and standards for any cost analyses required to support the development of equitable interconnection charges. Where adequate cost information is not readily available, the Commission may examine comparable interconnection pricing policies and price levels from international experience to establish fair benchmarks for operator interconnection charges in Nigeria.
Thus we see that in some sense Nigeria in 2003 is in the same position as the USA was in 1934, except that now we are prematurely focusing too much on deregulation, and hence possibly unbridled competition between the operators!
SUGGESTING SOME SOLUTIONS FOR NIGERIA
A developing country with serious telecommunication needs for universal access (in terms of affordability and flexibility, etc.) such as Nigeria cannot and must not wait for the marketplace to take its course – ie just letting paired negotiations occur between all of the operators interminably as they see fit. Rather, NCC must be pro-active and ensure that at least three things happen as depicted in Figure 2:
In conclusion, the broader world of information and communications technologies (ICT) has exciting prospects in the Nigerian market if all technological i’s and t’s are properly dotted.
I rest my case.
2. Telecommunications Act of 1996 (USA)
3. APEC Principles of Interconnection As Implemented in the United States as of August 1999
Table 1: Telecommunications Actors in Nigeria
120 Million individual Nigeria citizens
Federal, State and Local Governments
Commercial Businesses and Industries
Nigerian Communications Commission (NCC) [enabled by Decree 75 of 1992]
Wired Communications Providers in Nigeria
NITEL (Incumbent National Operator) – Licenced 1st November 2002; expires 31st October, 2022
Globacom (Second National Operator, SNO) – Licenced 1st September 2002; expires 30st August, 2022
Mobile Wireless Communications Providers in Nigeria
Econet (0802-); Licenced 9th February 2001; expires 8th February 2016
MTN (0803-); Licenced 9th February 2001; expires 8th February 2016
MTEL (0804-); Licenced 9th February 2001; expires 8th February 2016
Globacom (0805-); Licenced 1st September 2002; expires 30th February, 2017
Fixed Wireless Communications Licencees/Providers in Nigeria
All Licences effective July 1, 2002, expire June 30, 2007
Odua Investment Company Ltd [Ekiti, Ondo, Ogun, Osun, Oyo]
North West Communications Ltd [Ogun]
Swift networks Ltd, Formerly Izaga Networks Ltd [Lagos]
Cyberspace Ltd [Delta, Lagos]
Gold-Jay Enterprises Ltd [Edo]
Rainbownet Ltd [Abia, Anambra, Ebonyi, Imo]
Wideways Nigeria Lta [Enugu]
Choffan Communications Ltd [Anambra]
Modern Telecom Ltd [Rivers]
Sirius Wireless Ltd [Rivers]
Global Communications Network Ltd [Bayelsa]
Pime Global Services Ltd [Akwa-Ibom]
Netco Services Ltd [Bayelsa, Abuja]
Megatech Software [Akwa-Ibom, Plateau, Kano]
Mega Tech Engineering Ltd [Kano]
Horizon Broadcasting & Telecommunications Ltd [Kano]
Musty Digital & Security System Ltd [Jigawa, Niger]
African Telecommunications Network Ltd [Nassarawa]
BIG Communications Ltd [Benue]
Bentel Networks Ltd [Benue]
Startech Connection Ltd [Kaduna, Kano, Plateau, Abuja, Nassarawa]
UBA Capital & Trust Ltd [Cross River, Rivers, Delta, Ebonyi, Imo, Lagos, Ekiti, Osun, Kaduna, Abuja, Kogi, Kwara, Niger, Gombe, Bauchi, Borno, Adamawa, Taraba, Yobe, Zamfara, Jigawa, Katsina, Kebbi, Sokoto]
FIGURE 1: POSSIBLE PAIRED CONNECTIVITY DIAGRAM BETWEEN OPERATORS
FIGURE 2: SUGGESTED FULL CONNECTIVITY WITH NATIONAL NUMBERS REGISTER SWITCH CENTER(S)/CLEARING HOUSE(S)
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