Nigerian telecoms firms’ alleged load shedding, quality of service and consumers’ QoE

*Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecoms Operators of Nigeria, affirms though ‘there is nothing like shedding loads’ by telecoms companies, the high operating costs, and ‘delay on the part of the government’ to allow network operators to increase service tariffs may compel Telcos to adopt load shedding to reduce costs for survival of the telecoms industry in the country

Gbenga Kayode | ConsumerConnect

Contrary to certain piece of information making the rounds in the public space regarding Telcos’ service ‘load shedding’ or ‘load reduction’, the Nigerian telecoms companies under the auspices of the Association of Licensed Telecoms Operators of Nigeria (ALTON), have denied that Telcos had begun load shedding over economic challenges facing them in the country’s ecosystem.

Earlier, reports had indicated that the telecoms operators had begun to implement load shedding with attendant negative implications on their Quality of Service (QoS) and consumers’ Quality of Experience (QoE).

The purported resort to load shedding is also construed by many to mean a direct response to the Nigerian Communications Commission’s (NCC) supposed reluctance to address their latest requests for approval of tariff hikes.

The concept of load shedding refers to a deliberate shutdown of telecoms services in a part or parts, generally to prevent the failure of the entire system when the demand strains the capacity of the system.

ConsumerConnect reports the network operators, citing the rising cost of operations, including the increased prices of diesel, infrastructure maintenance, and a depreciating naira, recently urged the NCC, the foremost industry regulator, to approve tariff increments in order to alleviate their financial burdens.

There is reported increased “prioritisation of network service in high-revenue areas”, which some consumers noted could account for the reason why service quality of network operators may be good in certain areas and poor in others across Nigeria.

As regards the rife claim of load shedding across the country, checks revealed that several telecoms consumers also have believed that the Mobile Network Operators (MNOs) must have activated load shedding in some locations in the country.

No load shedding yet, but MNOs ‘may adopt the method’ if…, says Engr. Adebayo

In reaction to purported load shedding by Telcos in the telecoms ecosystem recently, Engr. Gbenga Adebayo, Chairman of ALTON, has clarified the current stand of the Association’s members to adopt load shedding in a move to cope with the stifling economic realities in the country.

ALTON is a body corporate, duly registered under the laws of Federal Republic of Nigeria as an Incorporated Trustee, and officially recognised by the Government of the Federal Republic of Nigeria and the Nigerian Communications Commission as the official industry body for all providers of telecommunications and subsidiary services in the West African country.

Adebayo, who denied that the Nigerian telecoms companies had begun load shedding in an interview, however, noted that there is a possibility of load shedding, if current economic situation persists in Nigeria.

The ALTON Chief had told Sahara Reporters: “It is untrue, there is nothing like shedding loads by companies.

“What we said was that the current wave and atmosphere was not friendly for business environments.

“We have complained about sustainability of telecommunications businesses and spoken about the need to review policies including interventions but we have not gotten to the stage of load shedding.”

Adebayo, however, stated that “with the high operating cost, and the delay on the part of the government to allow operators to increase prices of telecoms services, operators may adopt the method of load shedding in the sector.

“We may decide to give network to some areas, while others may not have network, just to cut down operating cost for survival of the industry.”

He also restated: “We don’t pray we get to that stage but if the issues raised persist, load shedding may occur.

“We have had similar cases in the electricity sector, there was a time we used to have 18 hours of electricity in this country but that is no longer the case even though the government started doing things like Bands A, B and C.”

Besides, Adebayo identified taxation as one of the issues affecting the sector as of now.

“Although I commend the President for signing the critical infrastructure bill recently, protecting the critical infrastructures of the country.

“Taxation is another issue we are facing. No industry can survive the level of taxation in the country at the moment. It is unsustainable.”

On the whole, he emphasised that the claim of nationwide “network disruptions” caused by load shedding is false.

Forex blues and dwindling investment in telecoms sector, by Telcos

In respect of the extant operational challenges in the telecoms industry, MTN Nigeria Communications, for instance, with a subscriber base of 79.7 million as of December 2023, reported a first Loss After Tax of N137 billion since its 2019 listing on the Nigerian Exchange (NGX) Limited, in 2023.

The Telco reportedly incurred Foreign Exchange (Forex) losses to the tune of N740billion in its books.

Similarly, Airtel Africa, which had 50.9 million subscribers in Nigeria as of March 2024, reported a Loss After Tax of $89 million for its full year ended March 2024, primarily due to Forex headwinds in Nigeria and Malawi respectively.

The telecoms company lost $1.26 billion to derivative and Forex exposures with $770 million attributed to the Naira’s devaluation, according to report.

Against the backdrop of dwindling investment in the telecoms sector of the economy of recent, Carl Cruz, Chief Executive Officer (CEO) of Airtel Nigeria, reportedly affirmed the devaluation of the Naira, moving from N420/Dollar to N760/Dollar in a month’s time, to about N1500/Dollar … had, indeed, “affected telecoms industry, which relies heavily on importation of infrastructure to grow the sector.”

Likewise, Karl Toriola, CEO of MTN Nigeria, at a recent stakeholders’ forum, in Lagos, said network operators are reluctant to invest, due to high operating costs and the devaluation of the Naira, among other issues that have marred the growth of the telecoms sector.

Toriola noted the telecoms sector in Nigeria is now in an intensive care unit (ICU) gasping for breath, while calling on the government to intervene.

The MTN Nigeria CEO said: “The sector is facing a lot of challenges of which if an urgent action is not taken, it will dry up.

“The truth is that investors are not going to come to invest in the sector if the fundamental issues are not addressed.

“To rescue the sector from collapsing, there is a need to increase prices of telecom services.”

NCC’s response to Telcos’ repeated requests for tariff increments?

In regard to Telcos’ repeated appeals to the Nigerian Communications Commission for them to jack up prices of telecoms services in the ecosystem, stakeholder have suggested the telecoms regulatory Commission has remained “silent” on the burning issue, thereby causing frustration and uncertainty among industry players.

As the situation has escalated, with telecoms operators reportedly warning that if the regulator does not grant their request for tariff hikes, they may be forced to adopt load shedding—a strategy that would involve rationing network availability during certain periods.

If this happens, it is believed that such a move can lead to service disruptions in mobile and Internet services, affecting millions of Nigerian consumers who rely on these essential services for communication, business, and access to essential information in the country’s telecoms ecosystem.

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