ABUJA, (Sundiata Post) – The Nigerian Communications Commission (NCC) has carefully developed a monitoring and compliance plan effective this last quarter of 2017 to periodically conduct stress tests on its telecommunications licensees in order to ascertain their viability as going concerns under the extant laws of Nigeria.
The stress test is in line with the mandatory implementation of the Code of Corporate Governance which the Commission has championed in the last three years to help it entrench corporate governance and sustainability principles, while promoting inter-generational equity in the conduct of telecoms business.
Chairman, Board of NCC, Senator Olabiyi Durojaiye told LEADERSHIP at the weekend that the Commission under the current administration “would not like to witness the folding up of any of our major telecoms service providers whom we regard as the geese that lay the golden eggs for our country.”
He said by putting in place the monitoring and compliance mechanism, “it is important to reiterate at this point that the essence of the exercise is not to ambush and sanction erring licensees, but to encourage wilful and deliberate compliance with the principles of the Code. To this end, the Commission has instituted a reward system, which is aimed at recognizing and celebrating compliant licensees.”
The mandatory compliance framework was introduced amidst a receding economy triggered off by a combination of factors such as falling oil prices, embarrassing public and private sector corruption, huge internal and external debts, weak income per capita/per head, excess of imports over exports resulting in adverse balance of trade and of international payment, huge expenses in combating and refurbishing Boko Haram damages in the North-East and infrastructural deficit and restiveness in the Niger Delta.
Durojaiye said by July 2016 inflationary pressures, spiked by successive negative growth in the Gross Domestic Product (GDP), effectively slipped the economy into recession. At the telecoms industry level, the picture was not any better.
“A closer examination showed that the industry was dealing with gradual and steady decline in Year-on-Year Gross Earnings, Average Revenue Per User (ARPU), particularly in the voice segment of the market, occasioned by the ubiquitous and predatory new media (Over the Top (OTT) providers), poor Quality of Service indices, as well as rising debt/expenditure profile. All of these combined to foist an oppressive operating environment on industry players” he said.
Over the years, the Commission has made remarkable progress in the technical regulation of the industry, but was also concerned about the absence of a formidable regime to guide the ethical conduct of its licensees across various market segments and value chain. The introduction of the Code was designed to address this yawning gap.
According to experts, the events of the recent past in the industry such as the failed takeover of Etisalat Nigeria (now 9Mobile) by 13 lender banks, underscore the urgent need for stakeholders to implement the time-tested governance principles in the conduct of their businesses. From deliberate violation of licence conditions to serial breaches of contractual obligations, the industry has never been this threatened, the experts said.
Speaking further, Durojaiye said “the industry is on a threshold, and requires a paradigm shift from the traditional corporate governance principles of Board/Management strategic initiatives, stakeholder satisfaction and financial auditing to a more robust enterprise risk management framework that speaks to value propositions such as reputation, quality and quantity of human capital, protection of human and labour rights, among others.”
Meanwhile, Executive Vice Chairman, Nigerian Communications Commission (NCC), Professor Umaru Danbatta has averred that to sustain business confidence and faith in the service providers to provide seamless services to their customers, it is expedient that telecoms sector operators comply with this Code of Corporate Governance.
“Whereas the code prescribes sanctions for non-compliance but the code also contains reward system for consistent compliance indicating that enforcement and sanctions is not the raisond’état for promulgating the code. To promote that stakeholders’ concept the code encourages companies who meet the prescribed parameters in terms of operational size and to leverage inherent investment and capital access enlist on the Stock Exchange” he added.
Danbatta who spoke in at the South East zonal sensitization workshop for telecommunications stakeholders in Enugu, Enugu State asserted that the code will reassure existing and would-be investors that their investment is safeguarded by high ethical regime of performance standards. “It bears reiterating that though most high profile sector operators are privately owned, but the general public and society have very high stakes in them and thus justifies the application of the code.
“The unfolding challenges of Etisalat now renamed 9Mobile being a good example of that relevance, NCC has a duty to protect all parties. Only recently the House of Representatives of Nigeria at a Public Hearing convened to inquire into the health of the sector disclosed that the sector was owing about N143 billion in taxes to government.
“Without prejudice to the sanctity of the ball pack sum quoted, the fact that such huge sum could be owed say a lot about the standard of corporate governance in our sector. Better disclosure policy would in our opinion not allow such huge debt to accumulate” he said, adding that SIM registration difficulties NCC is having with operators could be addressed with strict compliance the code.
Source: http://sundiatapost.com/2017/11/20/ncc-plans-financial-stress-test-for-telecom-operators/