Nigeria’s declining internet users

Recent data from the Nigeria Communications Commission (NCC) indicates the beginning of a worrying trend in internet access in Nigeria. The data showed that internet users in Nigeria declined from 91.3 million in January 2017 to 90 million in February 2017. It means a huge drop of 1, 275, 573 internet users in one month alone. This is worrying. If we are to guess, we may attribute the huge drop to the biting economic times in the country that has seen a huge drop in the living standards of Nigerians and a diversion of resources towards food and other essentials for survival.

However, researches globally have shown that increased access to bandwidth stimulates economic growth. More specifically, access to bandwidth increases productivity, leads to greater price transparency and efficiencies in the supply chain. It also lowers communication costs, leads to development of major new industries including telemedicine and connected homes, results in higher levels of education through access to online resources, leads to more efficient work and use of public infrastructure through telecommuting, and leads to more efficient labour allocation through better job advertising. The trend the world over therefore, is to drive competition in the data segment, and consequently lower prices to achieve universal coverage and access.

But not so with us in Nigeria. The telecom sector regulator, the NCC, last year wanted to officially and compulsorily raise the price of data by ordering the major telcos to charge a minimum of N0.90k/MB. Before then, some telcos were charging as low as N0.21k/MB. It took the angry reactions of Nigerians to force the NCC to backpedal.

But the NCC is yet to relent. Although it had officially suspended the increase, it has continued to rationalise the move and is only waiting for an opportune time or a more silent way to effect the increase without the publicity that heralded its failed attempt the last time.

The argument by the NCC that “the decision to have a price floor was primarily to promote a level playing field for all operators in the industry, encourage small operators and new entrants” is bunkum: How can you increase data price by as much as 300 percent for telcos who have a 99% share of the market just to protect small operators with about 1% of the market? Is that not punishing the majority of the country just so that some small operators in the industry can survive?

Data obtained from the NCC website shows that out of a total 90, 029, 182 internet users in Nigeria in February 2017, 89, 998, 873 were on GSM networks, while only 30, 309 were on CDMA networks. From the above, majority internet users use the GSM networks. It beggars belief that the NCC was attempting to throw millions of Nigerians under the bus, derail Nigeria’s economic and educational progress and growth just to pander to the whims of some people who rely on regulatory help to enter an overcrowded market or survive a competitive environment!

What message is the NCC sending to telcos and investors that have carefully planned and invested billions of dollars to land cables (passing through different continents) just to be able to deliver cheaper data to Nigerians? Is it not sending a subtle message to companies and investors that long term strategy in Nigeria is virtually useless and that all that matters is just politics, knowing someone in government or the regulatory institution that will turn things in your favour?

This somehow confirms Prof Stigler’s view that sometimes regulators end up being captured by the firms in the industry they sought to control.

Sometimes, beyond being captured, it may be about the competencies of people appointed to regulatory institutions. In other climes, leading industry experts are usually appointed to regulatory institutions and such institutions are at the cutting edge of knowledge and innovations in the industry. But this is not so in Nigeria. Here, appointment to regulatory institutions are seen as providing job for the boys and firms or companies being regulated, sometimes, out of genuine concern, have to finance the training of regulatory personnel to, at least, help them to even understand some concepts and dynamics in the industry.

Whatever the case is, it is clear the NCC is out of sync with happenings in the global telecommunications space and is badly in need of reputable and or competent personnel to be able to effectively discharge its duties.

Nigerians and campaigners for universal internet coverage in Nigeria must not relent or be quick to declare victory. We are privy to subterranean moves to force the increase in data prices. Eternal vigilance, as they say, is the price of freedom!