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Telecoms: Substandard equipment worsens service quality

By BusinessNews Staff on April 6, 2014

The poor quality of services being offered by telecoms firms in the country is not likely to improve anytime soon due to the proliferation of substandard equipment the service providers are using.

Investigations by our correspondent revealed that some of the service providers were patronising equipment vendors that offered cheaper prices, as against those with more expensive but qualitative equipment.

The dwindling revenue streams and diminishing capital outlay in the industry, it was learnt, were putting huge pressure on the firms to drive down their cost of operation by all means.

The patronage of cheaper equipment vendors, it was also gathered, had huge implications on the overall engineering cost, which was a significant cost for the telecoms operators.

Owing to the successful deployment of the cheap set of equipment and the accompanying short-term benefits, operators that had yet to adopt the model were fast considering it, our correspondent also gathered.

Most of the operators have embraced outsourcing and managed services models for their engineering processes as part of the cost minimisation strategies in the face of dwindling revenues.

Nearly all the firms being engaged by the operators are foreign vendors. Some players in the industry recently expressed their displeasure over the engagement of some of the foreign vendors they described as “less competent.”

The President, Association of Telecoms Companies of Nigeria, Mr. Lanre Ajayi, who spoke to our correspondent on the subject matter, said outsourcing could get sour when cheap vendors were engaged as they would always sell cheap products.

He, however, described the outsourcing and managed services model as a good development for the telecoms industry as it focused on making the operators to concentrate on their areas of core competencies.

Ajayi said, “Outsourcing engineering services cannot be faulted, but the concern is about the competence levels of the companies being outsourced to. Are they really qualified for the jobs?

“Most of the companies engaged are foreign and some indigenous companies that have the competences are not happy. They feel they should be patronised.

“I think we should start to address this. The Federal Government should come up with a local content law as is the case in the oil sector. There must be an enabling policy framework.”

The Nigerian Communications Commission recently expressed worry over the abuse of terms of contracts between the telecommunications companies and their vendors, which has led to the defrauding of third-party partners including the governments in the form of tax payment.

The Director, New Media and Information Security, NCC, Dr. Sylvanus Ehikioya, said the government was losing a lot of revenue in the form of taxes payable from proceeds of the contractual arrangements between the telecoms firms and the equipment vendors as a result of non-disclosure or partial disclosure of contractual considerations.

Ehikioya added that the existing Computer Professional Registration Council of Nigeria’s code, which is meant to regulate such contracts and their contents, was grossly being abused by the operators.

“We’ve discovered that the vendors want to evade tax by inappropriate valuation of products and contracts,” he explained.

The board of the Nigerian Communications Satellite Limited recently said that the proliferation of foreign ICT vendors in Nigeria was dangerous and must be corrected fast.

The Chairman of the board, Prof. Turner Isoun, maintained that the foreign ICT vendors proposing and supplying security solutions to Nigerian infrastructure organisations posed serious threats.

[Punch]

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