ALTON cries out, high levy may kill telecoms industry in Nigeria

The Association of Licensed Telecommunications Operators of Nigeria (ALTON), on Monday said that an upward review of the Annual Operating Levy (AOL) could collapse the telecoms industry. Mr Gbenga Adebayo, the Chairman of ALTON, made the remark in an interview with the News Agency of Nigeria (NAN) in Lagos. Adebayo said the insistence of 2.5 per cent AOL by the Nigerian Communications Commission (NCC), was not the best for the industry.

He said that increased levy was not good for the industry, especially as the operators were presently battling with local governments on additional taxation. According to him, an upward review of the levy will amount to additional burden on the service providers.

“’The worry now is that both the regulator and the government are not thinking that the industry can collapse, and there is no industry or institution that is immune from failure. So, telecoms may have had the success it had over these years, but it is not a reason to say that it cannot collapse. So all these issues of review of AOL, reduction of interconnection rate, issues of multiple taxation, we think they are small issues.
“They translate to major bottom line results,” he said. Adebayo said the telecoms industry was fragile, hence NCC should be very careful in every decision it took on the industry.

He said that smaller players in the industry were finding it difficult to cope, as some were in huge liabilities, which were very hard to refund. The ALTON chief said technology was not favouring commerce, as today’s technology provided almost everything free of charge. Today, you can make calls via the internet, you can exchange text messages via the internet, almost at no cost,” he said.

Adebayo said operators had invested in equipment, in facilities, in power system and manpower development, hence, when almost all the telecoms services were rendered free of charge, operators lose revenue. He said that the industry was facing policy, regulatory, environmental and technology issues, which the telecoms umpires needed to look into.
The ICT expert said that beyond the immediate gains, there was the need to look at the future implication of what was being done in the industry. NCC had, at a Public Inquiry on the Levy Regulations in Abuja, said it would not reduce the 2.5 per cent AOL being charged on telecoms operators. The Executive Vice- Chairman of the Commission, Dr Eugene Juwah, said it was illogical to reduce the AOL, since NCC did not receive any money from the government. Juwah said the charge was a levy on the turnover of operators.

“’It is the money that enables the commission to execute projects in the Universal Service Provider Forum (USPF), and it used to run the regulatory office. I think the issue of decreasing the percentage of the levy will not be logical for now. It is the money that sustains the regulators and the money is used to execute projects that the regulators do through the forum,” he said.