23 December 2012

Nigeria: How Promo Ban Serves Subscribers' Interest

Lagos — The advent of Global System for Mobile Communications (GSM), everyone agrees, has been a revolution. Nigeria finally joined the GSM world after its less endowed neighbouring nations. The milestones of the 11 years since its launch have been monumental. The lifestyle of the citizens is remarkably affected by the GSM experience such that many of them can hardly live without their phones. Even those in the lowest rung of the economic ladder also parade multiple phones.

The telecommunications industry is the most vibrant sector of the economy and the second biggest revenue earner for the government, next only to the oil and gas sector. The economic benefits are felt by big and small businesses and the consumers alike. Any policy that therefore affects the industry one way or the other will also have ripple effects on the large majority of the populace. That is the case with the November 8, 2012 ban imposed on consumer promotions and lotteries on all GSM networks.

The Nigerian Communications Commission (NCC) said it wielded the big stick in the interest of the consumers. Indeed, the networks had experienced incredibly low quality of service prior to the ban. According to the regulatory agency's Director of Public Affairs, Mr Tony Ojobo, "The commission carefully evaluated the complaints received, especially against the backdrop of sustaining the integrity of the networks, the general interest of the consumers, the socio-economic impact of the promotions on operators and other relevant stakeholders, before concluding on the ban."

The sweeping ban on consumer promotions and lotteries is to endure until the NCC is satisfied that the networks could cope with the pressure such campaigns mount on their systems.

Industry analysts have, however, questioned the decision on the ground that it is the same NCC that had handed a clean bill of health at various times to some of the network operators. For instance, while announcing its Audit Report for March and April 2012, the NCC had declared Airtel as the best operator for good quality of service. It said that Airtel Nigeria, a brand that has been troubled by ownership battles and frequent name changes since the launch of the GSM revolution in Nigeria, recorded impressive performances when compared with the commission's target on four crucial parameters namely Call Set-up Success Rate (CSSR), Call Completion Rate (CCR), Drop Call Rate (DCR) and Traffic Channel Congestion (TCH). Subscribers and consumer rights activists are now wondering why such a highly rated network will now be banned by the same regulatory authority that gave it a high accolade only a few months ago.

The latest GSM operator Etisalat, which has a four-year experience in the Nigerian market, had earlier been ranked best telecommunications service provider for good quality of service by the NCC based on the Quality of Service Key Performance Indicator audit report released in February 2012.

Two months before the blanket ban, the NCC had also conducted a Nationwide Benchmark Drive Test on the networks of the four major GSM operators - MTN, Globacom, Airtel and Etisalat. It was the first such test and it concentrated on Call Completion Rate, which encompasses the major network KPI (call drop and congestion). The service providers were ranked in Lagos and the six geo-political zones of southwest, southeast, southsouth, north central, northeast and northwest.

The result shows high percentages for all the networks with Airtel leading three regions - southsouth, southwest and northeast by percentage ranging from 78 per cent to 88 per cent. Airtel came second in the other regions recording between 75 per cent and 92 per cent. Etisalat was rated number one in northcentral, Lagos, northwest and southeast scoring between 85 per cent and 94 per cent and second behind Airtel in southsouth, southwest and northeast with between 67 per cent and 86 per cent rating. MTN finished with between 53 per cent and 74 per cent in all the regions, while Globacom scored between 53 per cent and 88 per cent.

Mallam Abubakar Bello, a consumer rights activist, believes that the ban on consumer promotions and lotteries has not been justified given the experience of subscribers ever since. "The network has not stopped experiencing congestion. Indeed, the situation is even worse than it was prior to the ban. It therefore means that the problem with the network is not consumer promotions. The NCC should look elsewhere and not deny the consumers the benefits they are entitled to as customers of the GSM providers."

It is noteworthy that these consumer promotions have changed fortunes of its winners forever. Anyone who understands the African family system and its close bonds will appreciate how the change in fortune of one member of an African family unit impacts everyone connected to that family unit. The misfortune of one family member ultimately cascades down through the entire family unit as everyone pools together to help alleviate such misfortune. Simply put, empower one African and you empower an entire clan. This is unlike the nuclear family settings that dominate Europe and North America.

According to another GSM subscriber, Olamide Alao, a Lagos-based civil engineer, NCC's decision has eroded a veritable source of income for the Nigerian consumer who views such consumer promotion as a good way to have direct benefit from the telecommunications companies for using their services.

Brands have exploited consumer promotions to reward their customers and to acquire new customers. For the customers, it is a means of connecting with the brand. It's a period of bonding for both the customer and the brand conducting the consumer promotions.

Surveys have revealed that the Nigerian consumers have isolated complaints about the quality of service which is largely due to the level of infrastructure deployed to service a particular area. Indeed, the Association of Licensed Telecoms Operators of Nigeria (ALTON) has stated its position that the recent challenges on the networks can be blamed on man-made and natural disasters rather than consumer promotions and lotteries. Chairman of ALTON, Mr. Gbenga Adebayo, said that the natural disasters were caused by flooding in some southern parts of the country, while the man-made disasters were caused by spontaneous attacks on telecoms facilities in some northern parts of the country by gunmen in September this year.

"The impacts of the attacks had since limited the ability of millions of Nigerian subscribers to access telecommunications services, because the incidents affected over 250 telecoms sites that lost connection and many suffered significant damage beyond repairs," Adebayo told journalists recently.

The Nigerian consumer is apparently still drawn to sales promotions which is a veritable means of economic empowerment. The bulk of Nigerians affected by the NCC's actions are mid/low income earners who benefit immensely from the bonuses, discounts, freebies and financial rewards attached to these consumer promotions.

For many Nigerians, the telecommunications industry has changed their lives in positive ways. For some it has been through the provision of jobs, better-paying jobs, increased income through dealers or just an opportunity to make some small additional money through the sale of phone accessories or recharge cards. For even more Nigerians, their connection with the telecommunications companies is through daily usage of their services which has resulted in small fortunes for them. These small fortunes have come in the form of customer rewards in consumer promotions held by these telecommunications companies.

Being the most vibrant sector of the Nigerian economy and a major revenue earner for the country, the decisions of the regulatory agencies must be, therefore, informed by the interest of the overall majority.

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