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RURAL TELEPHONY RIP-OFF

By NBF News
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Efforts by the Federal Government to make phones available to rural dwellers have not been achieved despite spending over more than $200 million. Investigations have shown that a decade after the take-off of the Rural Telephony Project (RTP) to provide over 636,256 Code Division Multiple Access (CDMA) lines in the 776 Local Government Areas and the Federal Capital Territory (FCT), not a single line is working.

The Federal Government had borrowed the $200 million from the China Export Import (EXIM) Bank and provided 15 per cent counterpart funding of N5 billion, which became a subject of controversy after questions were raised over the manner of its disbursement.

The problems, beseting the projects can best be described as hydra-headed. For instance, officials of the Ministry of Communications had spilled the beans, saying the Federal Government had paid N5 billion to the three Chinese companies handling the RTP - ZTE Corporation, Huawei and Shangai Bell without signing the required financial agreements for the project.

According to the Chief Technical Officer (CTO) of the ministry, Chike Uwazie, since the payment of the counterpart funding without any formal agreement, the Federal Government cannot access the $2.5 billion from the China EXIM bank. Hence, the delay in the take-off of the second phase of the project, even as there are no operational lines to show for the success of the first phase. Rural telephony is simply access to either GSM or fixed lines in the remotest part of the country and those in that part would have a feel of what communication is all about rather than travelling 20 or more kilometres to access communication devices.

There is no gainsaying the fact that the advent of GSM in Nigeria has recorded a resounding success. However, rural telephony is still a major challenge because several reasons have been given by operators on why some rural dwellers may still be unreached 10 years after. The plan by the Nigerian Communications Commission (NCC) to bridge the gap in rural telephony deployment by offering Fixed Wireless Access (FWA) telephony licences on regional basis does not appear to be the key to the problem.

The NCC programme appears many years ahead of its time for a developing country like Nigeria. The reasons it may not achieve remarkable success are many. First, the so-called regions are the existing states, as politically and geographically expressed in the present 36 states and Abuja, giving a total of 37 regions. Nigeria's teledensity – the number of phone lines per 100 people – has seen an almost 10-fold growth in the last 10 years. Research has shown that out of Nigeria's roughly 76.53 million phones, about 13 million are in rural areas. Almost half of the nation's phones are mobile while growth in fixed phones is tapering off.

For instance, the telecom regulator recently disclosed that mobile phones cover only about 20 per cent while roughly 14 per cent of the 607,491villages in the country have no phones. Among those that have, a high percentage is out of order at any given time. It was further revealed that while mobile phones were increasing rapidly, the growth of phones in rural areas is nothing to write home about.

It would be recalled that in 2008, the Federal Government handed down two-week ultimatum to the five prospective operators to embark on 'further due diligence' for the National Rural Telephony Project (RTP).

According to NCC boss, Dr. Eugene Juwa, 'rural telephony has always been a ministerial programme. NCC was not really involved in it but we have a universal service provision fund (USPF) that addresses services in the unserved area of Nigeria. We have been carrying out our own programme and establishing internet services communication centres, establishing transmission lines and supplying ICT products like computers and internet access to communities.'

A one time communications minister, Mr. Femi Anibaba, explained when he was summoned on the N5.3 billion rural telephony contract scam by the then House Committee on Communications, under the chairmanship of Mr. Jerry Manwe, that he had asked 'what rural telephony was doing at the National Assembly and they said it was to score a point. I don't want to indict anybody. Let the National Assembly and the executive work together…' In its response, the House of Representatives Committee on Communications expressed dissatisfaction on the project, which has gulped so much money without results.

'We are not satisfied with the Rural Telephony Project. We have moved round and found that sites have not been acquired but money has been paid to Chinese contractors. You have made mistakes and rushed the second phase. We are warning you and we have warned you before. Nobody intimidates the National Assembly. We are doing what our people asked us to do,' the committee reminded Anibaba.

In his explanation, the Director of Rural Telephony, Sani Ahmed , said it was the former president Olusegun Obasanjo that gave the go-ahead to embark on the second phase of the project immediately he returned from the official visit to China. 'I think they impressed it on him to start initiating the agreement in the MoU he signed, hence, he asked us to go ahead with the second phase,' Ahmed said.

It was gathered that the summons to former Information and Communications Ministers, Frank Nweke Jnr. and John Odey, to appear before the committee to clear some grey areas on the project were not honoured. Also, several invitations by the Dave Salako-led House Committee on Communications to the contractors to explain why the project is yet to take off after taking billions of tax payers' money have not yielded any results as they refused to honour any of the invitations.

The committee chairman identified the contractors as ZTE, Huawei and Shangai Bell. China National Machinery (import and export) is said to be the contractor handling the second phase of the RTP that will provide CDMA to 558 Local Government Areas as the first phase involved the provision of CDMA to 218 Local Government Areas.

Salako revealed that every civil servant in the Ministry of Communications fingered in the failed project would be brought to book along with the contractors that collected the monies and absconded. The civil servants, he said, were the ones that convinced Obasanjo to award the project to the contractors in question, who were paid for undisclosed services without the knowledge of the National Assembly.

After the hearing and investigations by the Manwe-led House Committee on Communications, it recommended to the House that the Ministry of Communications officials and Due Process Office be prosecuted, including the management of NCC over the unauthorised spending of the N5.3 billion without approval of the National Assembly.

This contravened sections 162 and 81 of the constitution of the Federal Republic of Nigeria and, according to the committee, 'Non-adherence to budgetary provisions as stipulated by Section 19 of the NCC Act 2003 is unacceptable.'

However, it was after the sixth recommendation that the management of the NCC be reorganised and prosecuted that the House became divided. While some members wanted the recommendation to be implemented to follow its earlier example (sacking some of its principal officers for spending money that was not budgeted for), members like Leo Ogor, Igo Aguma, Chuma Nzeribe and Halim Agoda, including Cyril Maduabum, Ita Enang and Emmanuel Jimeh, faulted the committee for incorrect recommendations. 'It appears to me that the committee members went for the leg instead of the head,' Maduabum said.

Apart from the review of the 2003 Communications Act that was upheld, it was also recommended by the committee that the work of communicating the unserved areas in the RTP be transferred to NIGCOMSAT through its satellite for effective service. However, the history of the NIGCOMSAT project undertaken by the China Great Wall has been that of draining the nations of its scarce resources.

When Dora Akunyili was appointed Minister of Information and Communications, she made moves to revisit the failed rural telephony project after she called for briefing from the individuals and government departments involved in the project. This information was a prerequisite for the take-off of the second phase of the project.

'Whatever happened in the project was not within the life of this administration. It is only after the minister had obtained proper briefing that she will take a stand on the project,' Sunday Dare, special adviser to Akunyili had said. After tinkering with several adhoc committee proposals on the way forward on how to provide communication for the over 50 million Nigerians living in the unserved rural areas, the Federal Government in 2009 transferred the first phase of the project to five indigenous telecommunications companies.

They are G-cell Wireless Limited, Hezomic Limited, Key Communications Limited, Suburban Broadband Limited and Voicewares network Limited. Under the new arrangement, Suburban Broadband won the bid to manage the FCT and Kaduna Zones with $140.5 million while Key Communications won the Ibadan zone with a $38million bid. Voiceware Networks bidded and won the Enugu zone with $30 million; Hezonic also bidded for Enugu zone for $30million. G-Cell Wireless on its own bidded and won the Bauchi zone with $20 million. But since the takeover, nothing has changed as the project remains in the doldrums.

Daily Sun findings revealed that both G-cell and the other companies that won the bids to manage the RTP in the geo-political zones are members of the New Generation Consortium, the firm that emerged the preferred bidder for NITEL with a $2.5 billion bid. Unfortunately, it was unable to pay the bid security even after the extension of the deadline.

The President of Association of Telecommunications Companies of Nigeria (ATCON), Titi Omo-Ettu, lamented that government's involvement in the project was ill-advised because it gave room to much wastage. He advised government to cancel its investments in the project to 'prevent certain wastage,' and encourage network providers to delve fully into the project.

Indeed, nothing could be farther from the truth, as the former Chairman of the House of Representatives Committee on Communications, Jerry Manwe, had described the project as a drain pipe which was going to be probed. But he was later removed as the chairman before the committee could embark on the probe.

Instructively, the Federal Government had tried to encourage telecommunications providers to reach the under-reached and unserved areas through the Universal Service Provision Fund (USPF). Forty per cent of the 2.5 per cent Annual Operating Levy (AOL) paid by the telecommunications companies to the NCC is paid into this fund, which is meant to subsidise the cost of reaching these economically unattractive areas by the network providers in providing infrastructure for their services.

However, much as they tried to access these monies, the digital mobile operators have received little or nothing to encourage them invest in the economically unviable areas of the country due to unnecessary bureaucratic bottlenecks and politicians, who struggle for control of the fund.

In 2007, Celtel, now Airtel, invested in rural telephony when it introduced GSM payphones called Jembi Public Calling Office (PCO) expected to create over 60,00 jobs, especially in the rural areas and boost the economies.

Experts believe that in providing rural and community telephony, provision of the services at the most reasonable and affordable rates is the goal, not profits. However, it appeared that many of the operators may not be interested because they may not get their money back in terms of profit.

Chairman, Digital Sense Communications, Mr. Remmy Nweke, explained that reasons that operators have developed cold feet in rural telephony project might not be unconnected with security and power is top, coupled with the inability of government at the local councils to provide friendly environment.

He noted that rural dwellers are not enjoying benefits from telephony and this should be tagged a national worry.

'This is where agency like the National Information Technology Development Agency (NITDA) has many roles to play by implementing the IT policy to the letter, especially by offering incentives to service providers in line with USPF championed by the new Ministry of Communications Technology.'

At the state and local government levels, governments in their quest to advance the economic benefits, accruing to their communities must not overlook the importance of their presence in fundamental quality of life-enhancing sectors such as rural and community telephony. Government participation is not necessarily an outright ownership and operation of such services. It includes the foresight to understand the limits of governments and, where necessary, joint investment with private sector operatives to make sure that key rural and community telephony is available to rural and community consumers.

The President, Joint Action Committee for ICT Awareness and Development (JACITAD), Mr. Prince Osuagwu, also reiterated that rural telephony should have been implemented long ago but several hiccups known to the operators seemed to have hindered it. His words: 'The advent of GSM has demystified the myth that telephones are strictly for the rich. It has also proved that there is market everywhere, be it urban or rural dwellings. I think the operators also understand that, being the reason some of them have invested heavily on infrastructure that would take their services beyond the buzz of the urban trappings.

'I am also not unmindful of the fact that a special focus, more efforts and dedicated concentration are also required to get adequate communication with all its relevant trappings and benefits to potential rural markets. I believe that was the reason the government, through the NCC, flagged off rural telephony initiative, which, I believe, is still there today for the operators to access.

'From what I gathered, there were supposed to be incentives and some tax holidays for operators, who would brace the storm to set shops in targeted rural areas. But why this is not getting the desired response from appropriate quarters beats my imagination because I know that besides taking the operators' businesses wider, it makes a strong CSR statement for any operator that can take advantage of that initiative.'

Recently, a network operator doled out 50,000 phones for rural dwellers but stakeholders in the ICT sector called it a ruse. They noted that such operator has left undone what it was supposed to do and chose the shortcut, which may still land both in square one.

Osuagwu stressed that rural telephony project or initiative should be a serious project.

'I do not know what the operator you are talking about meant to achieve with 50,000 phones for rural dwellers. Neither do I have real knowledge of how it wanted them distributed and where. In any case, it was a nice gesture if it had researched and found out that a certain community was lacking communication and decided to provide some leverages for them.

But the first problem is not the mobile phones, rather it is making communications available and accessible to them,' he stated. He, however, opined that 'acquiring the equipment may not be much of a problem for rural dwellers but a consistent education on the benefits of communication and how to derive such benefits from telephony. If this is clear to them, trust them to fend for themselves. That is not to say that subsidies on equipment, like the mobile phones, SIMs and others, would not be an added advantage, but the first things should be done first.'

Nweke, on his part, posited that the donation could be a marketing strategy that would not do much for whoever embarked on it, saying, 'precisely, what would that do for a population of 150 million people? Maybe covering a small village, although it has a future if the villagers have means of powering it.' Although in October 2010, MTN took a major initiative to reach the unserved areas of the country through the Rural Telephony Scheme (RTS) when it signed a MoU with its technical partners, Huawei Technologies, the project is expected to cost about $40 million in the first phase. The second phase has also been completed about June, 2011.

One of the telecoms operators also analysed Nigeria as a nation that is not conducive for any business, owing to several factors militating against it. He stated that 'the environment here challenges every business. Everybody is challenged by some of the realities of our environment. We have seen organisations with great resources also struggling with meeting their obligations. NEPA has been around forever and it is still struggling to meet its obligations.

The problem of investing in Nigeria is not necessarily the finances but the problem often is putting the investment on the ground. If I am going to put a base station in certain parts of the country, the roads are not motorable at certain seasons and heavy duty trucks cannot go there. In some other parts of the country, the town planning is in disarray that it becomes impracticable for one to put a base station there.' However, Mr. Wale Goodluck , the Corporate Services Executive of MTN Nigeria, noted that MTN Nigeria had identified what a lot of people see as a challenge.

'In terms of creating rural access, we have seen this as an opportunity. Last year, we launched a big rural telephony initiative, working with a strategic partner, Huawei, and I am happy to tell you today that a significant number of those base stations are on air, they are carrying traffic. We have put in place a very indigenous rural solution that is mindful of the circumstances of services in our rural community. We are the first to do this, it is something that is receiving a lot of attention from other operators in Africa and in other parts of the world. We have achieved a successful rural telephony programme and we are sharing our knowledge,' he added.

Asked about the number, Goodluck said 'over 130 rural telephoning base stations are live and carrying traffics today.' As for the Chief Executive Officer of Airtel Nigeria, Rajaan Swaroop , a lot still needs to be done to make headway as far as rural telephony is concerned. Lamenting that millions of Nigerians, especially those in the remote areas, are yet to enjoy the largesse of the GSM revolution in the country, Swaroop disclosed that there was still need for massive investments, infrastructure upgrade coupled with resounding legislations to make headway as far as rural telephony is concerned. He hinted that his company would be investing billions of dollars this year to register its presence, especially in the rural areas.

The second national carrier (SNO) Globacom recently partnered with Microfone Telecoms, a subsidiary of the Nigerian Capital Development Fund (NCDF), and 50,000 lines were supplied to rural areas across the country. The project, according to both companies, would create thousands of jobs for people in the countryside while increasing the nation's teledensity.

Under the partnership, Microfone will establish Village Public Phone Centres to bring telephony to rural communities while Globacom will provide an initial 50,000 SIM cards with airtime, riding on the Infinito platform of the network, enabling users to make calls for as low as 25 kobo per second. Globacom would also provide a customer service desk to cater, specifically for the lines on the scheme.