NCC tasks telecom operators on restructured business model

The Nigerian Communications Commission (NCC) has urged telecommunications operators to restructure their business model, to boost their revenue.

The Executive Vice-Chairman, NCC, Prof. Umar Danbatta, gave the advice on Wednesday in Lagos, at the Vanguard Economy Forum on Telecoms.

The forum had as its theme, “Unlocking the Revenue and Growth Opportunities in the Telecoms Sector in a Changing Business Model and Digital Technology Environment: Role of Regulator, Operators and OTT Service Providers.”

Danbatta, represented by Bako Wakil, Head, Technical Standards and Network Integrity, NCC, said there were dynamics in the telecommunications industry in terms of infrastructure investment and industry growth.

He said that there were dynamics in the revenue, technological advancement and the impact of Over-The-Top (OTT) applications in telecommunications space.

According to him, most industry players, years back, focused on traditional voice services.

“Voice revenues are in decline and profits are also suffering from decreasing termination rates in many jurisdictions.

“OTT services such as WhatsApp, Snapchat, Facebook, Messenger and Skype are fast replacing traditional voice and SMS as the primary method of communication for consumers.

“The business environment is becoming more complex, and the business models that were created in the past are no longer sustainable, as telecommunications companies are presently seeing the gradual erosion of their average revenues per user (ARPU).

“As a result of the increasing complexity of the operating environment of our industry, telecommunications companies, who grew on the back of traditional voice and data traffic, are realising that value is moving into other stages in the telecommunications ecosystem.

“The value is moving into completely different markets as consumption patterns change; and these consumption patterns are changing rapidly.”

Danbatta said that there was the need for the telecommunications industry players to understand the ongoing trend.

“It is necessary for industry players like Telcos, vendors and Value Added Service (VAS) licensees to consider taking steps to change their business models, in line with current and projected industry trends, as may be required,” he said.

Danbatta said in order to remain in business and thrive, there was the need for telecommunications companies and vendors to think outside the box.

According to him, there is need for them to create innovative partnership and low cost business models with themselves and other players in the business ecosystem.

“This will create a win-win situation for all players, and enable them to remain in business and thrive, despite the industry’s complexities,” Danbatta said.

The Editor, Vanguard Newspapers, Eze Anaba, said that the event aligned with Vanguard’s effort to meet the knowledge and information needs of its audience.

Anaba noted that the conference was necessary to service the readers’ appetite for added value.

“In reality, what we are doing today is an extension of what it has been for well over 30 years.

“Our focus on telecoms is borne out of the growth opportunities of the sector and its contributions to the GDP,” he said.