Resolving the Telecommunications Interconnectivity Battle in Nigeria

INTRODUCTION

In the world of telecommunications, which involves the transmission of one or more signals 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-cable, and fiber-optics), wireless (fixed and 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; Hz) and digital (measured in bits per second bps) transmission modes. 

Obviously, the CONSUMER determines the TYPE  (whether 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 telecommunication OPERATORS (or service providers) provide the technological means for a fee, in a manner that is profitable to them, and yet that is 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, and tax revenue for government), 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 that 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); four mobile national wireless licensees (most of them issued the licenses in February 2001);  and 22 fixed wireless licensees  (regional licenses issued in July  2002), and over ten Private Telephone Operators (PTO) which provide Wireless local loop (WiLL) in various cities around the country. Prior to the entry of the new operators, NITEL landlines were of the order of 800,000 lines, of which 500,000 were operational, serving possibly no more than 250 – 350,000 households and business/commercial units.  Today, the total number of landlines and mobiles has risen to about 3 million in two years, and the potential is estimated to 42 million lines in just a few years time.

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); 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 further discussions here if we confine our attention to PTP, and if we consider A and B to be two human consumers wishing to transmit voice. [But again, please note that telecommunications generally involve voice, data, video, Internet and fax transmission.]

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, nor does it matter what type of transmission he or she is sending?

 Note that if A and B MUST be subscribers to the same operator in order to talk to each other, then there is in fact ZERO NATIONAL INTERCONNECTIVITY, and essentially what we would have is a undesirable telecommunications network comprised of separate PNLs (Private Network Links.)  In that situation, for A to talk to B, C, D and E who are each subscribed to different operators, he must carry five different transmission/receive T/R equipments – one to talk/receive within his own network and the others to talk to each of B, C, D and E on different operator subscriptions.  Situations like this (i.e. multiple handset possessions) 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 bilateral interconnectivity between themselves and Globacom and NITEL have the same arrangement between themselves, then a 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 negotiated dual interconnectivity arrangement with each other, then we would technologically have full interconnectivity.  (See Figure 1)  The potential for a maximum number of N combination 2 of such bilateral negotiations exists.  [In mathematical statistics N combination 2 is equal to N factorial divided by 2 factorial divided by (N-2) factorial - where here N is the number of operators in the network wishing interconnectivity. “N factorial” is the multiplication together of all numbers from 1 to N.   If N is 5, then there are 10 paired negotiations; if N is 6, then there are 15 paired negotiations etc. ]  From Table 1, with a potential for 27 different landline, mobile wireless and fixed wireless operators, we would have 351 bilateral negotiations in a free-for-all environment!

However, from Figure 1, it is also clear that if the N operators are connected in an outer ring (connections with double lines), then with just N interconnections, provided one is prepared to jump from switch to switch past different operators, full interconnectivity can also be achieved.  At another level of interconnectivity, if for example,  there are 2 National Carriers and N-2 other operators, then if we presume that the national carriers are interconnected to each other, and that all the operators are connected to each of the national carriers (but not to each other), then there will be 2(N-2)+1 connections.

Note that the mere existence of CONNECTIVITY does not address the issue of Quality of Service QoS – for example as in frequent unavailable network signals, long time-to-connect,  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 available 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. 

With recent accusations, allegations and denials flying within the telecommunications community inside Nigeria over this issue, one cannot ignore the suspicion that this elbowing tactic is actually occurring.

THE AMERICAN EXPERIENCE CONTRASTED

In 1934, the first Communications Act of the USA was enacted, which read, in summary:

QUOTE

http://www4.law.cornell.edu/uscode/47/151.html

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

UNQUOTE

 Interestingly, it was not until sixty-two years later that 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 DE-REGULATION:

 QUOTE

http://www.aabss.org/journal2002/Mouritsen.htm

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.

 UNQUOTE

With respect to Nigeria, a National Policy on Telecommunications was first produced in 1995; it was approved and published in 1998, launched in October 1999, then finally revised by presidential committee then re-launched in May 2000. However, a Telecommunications Act was not signed into law until July 2003, repealing Decree 75 of 1992 under which the Nigerian Communications Commission (NCC) was originally set up.  Decree 75 had the following stated objectives:

QUOTE

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.

UNQUOTE

The  broad objective of the new Nigerian Telecommunications Act 2003 is to

QUOTE

"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.”

UNQUOTE

Further information on the National Policy on Telecommunications from which it is derived is pertinent:

 

QUOTE

POLICY OBJECTIVES

General

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…………

Interconnection

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.

UNQUOTE

  Thus we see that in some sense Nigeria in 2003 is almost in the same position as the USA was in 1934, except that now we are prematurely focusing too much on de-regulation, and hence possibly unbridled competition between the operators! 

 

SUGGESTING SOME SOLUTIONS FOR NIGERIA

The moral of the comparative stories USA v. Nigeria above is that while there is wisdom in not repeating the mistakes of early entrants into any technological market, yet late-comers must be careful not to imbibe hook, line and sinker the evolved policies of those early entrants, since the aims and technological environments of both players are in general different.   Thus a developing country with serious telecommunication needs for universal access (in terms of affordability and flexibility, etc.) and universal service such as Nigeria  cannot and must not wait for the marketplace to take its course –  i.e. by just letting paired negotiations occur between all of the operators interminably as they see fit.  Rather, government and its regulatory agent the NCC must be pro-active and ensure that at least three things happen, some of them as depicted in Figure 2:

1. The country, and particularly the interconnection between the two national carriers NITEL and Globacom, must be fitted with a national fiber-optic backbone for landline transmission of information, preferably at OC-192 (10 Gbps), OC-256 or OC-768 (40Gbps) speed.  [OC-X stands for Optical Carrier Level X, for fiber-optics signaling.] The Europe-Africa-Asia SAT-3/WASC fiber-optic international link with a gateway landing in Lagos is currently controlled by NITEL and is seriously underutilized (NITEL was connected to it in 2002).  It should be shared with other operators as a national mandate.   [The more well-known coax E1 lines are 2.048 Mbps (30 simultaneous voice conversations at 64 kbps per channel), while T1 lines (the American equivalent) are 1.544 Mbps (24 voice channels).]

2. A National Numbers Registry clearing house (or zonal houses) with a tandem switch capable of handling several different transmission protocols should be established and maintained either by NCC, or preferably by a consortium of ALL of the operators.  Each operator can then determine the capacity of its own connection to this clearing house, rather than base it on negotiations between pairs of operators. Calls made to the clearing house originating from any customer subscribed to any operator can then be switched to the appropriate destination. Such a method will make cost-based interconnection charging simpler, rather than the current haggling between the operators, and will make it easier and  less expensive for new entrants (who otherwise might be encumbered with unbalanced bilateral negotiations with so many incumbent operators) to enter into the market.

3. All analog transmission in the national telecommunications network should be upgraded to digital mode in the shortest possible time and as a matter of national priority – paid for from tax on profits from the operators, or by operators themselves through tax incentives - and equipments, particularly switches, changed accordingly.

 In addition to the above, two additional factors must be borne in mind: 

4. As the telecommunications explosion continues in Nigeria in particular, and in Africa in general, trained personnel will have to be developed locally to manage the industry, else both equipment AND personnel will have to be imported from abroad at considerable cost.  This is where the Digital Divide Institute of the NCC (scheduled to open in January 2004 in Abuja); the continental NetTel@Africa program for capacity building and knowledge exchange in ICT policy, regulation and applications; and the involvement of our universities in these same multi-disciplinary capacity-building efforts, are crucial.

5. Telecommunications cost to the consumer will be prohibitive when compared with other countries if our national electrical power infrastructure remains poor and our electric supply erratic.  There is no doubt the burden for the supply of diesel generators and backups in far flung areas of the country by mobile telecommunications operator is an unusual cost, although judging from recent profits announced by some of the GSM operators, this has not affected the bottom line of the operators themselves.  [For example, in the year April 1, 2002 to March 31, 2003, MTN made a pre-tax earning of $89.7 million on a revenue of $568 million.] Thus a significant portion of tax revenue from telecommunications operation in Nigeria should be re-routed to the provision of better electricity infrastructure in the country.

In conclusion, the broader world of information and communications technologies (ICT) has exciting prospects in the Nigerian market, and will attain great heights even quicker if all technological i’s and t’s are properly dotted and crossed respectively.

 Dr. Mobolaji E. Aluko is professor of Engineering at Howard University in Washington, DC, USA, and  a member of the Implementation Task Force for NetTel@Africa (Nigeria) Program under the aegis of  the Nigerian Communications Commission (NCC). He is also a member of the board of NITPA (Nigerian Information Technology Professionals in the Americas.).  He is President/CEO of Alondex Applied Technologies, LLC, a USA-based innovative technologies company. Contact him on alukome@jidaw.com

 

 

 

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