Regulating Nigeria's telecoms industry

In the wake of Etisalat Nigeria's financial troubles, the Nigerian House of Representatives has directed the country's communications commission to begin an integrity test and audit of the telecommunication sector to prevent the industry from a collapse. Anthony Eke, Acting Divisional Head of Infrastructure and Transport at Diamond Bank, recently discussed the health of Nigeria's telecom sector in an interview on CNBC Africa. During the interview, Eke shed light on the implications of Etisalat Nigeria's name change and the involvement of banks in the operations of telcos in the country. Eke emphasized that a change in the name of Etisalat would not significantly affect the operations of the telecom company, considering the strong brand presence it has built in the country. He noted that the brand's strength lies in its offerings and services rather than just its name. Eke mentioned the possibility of other reputable brands like Vodacom entering the Nigerian market, which could potentially bring a new wave of competition and innovation. However, he also highlighted the cautious stance that investors might take due to recent regulatory challenges and uncertainties in the sector. One of the key points raised during the interview was the concern over the involvement of banks in the operations of telcos. Eke expressed skepticism about the ability of banks to effectively run telecom companies, citing potential job losses and financial implications. He pointed out that telecom licenses are issued based on the owner's qualifications, and a takeover by banks could lead to operational challenges. Eke stressed the importance of regulatory bodies like the Nigerian Communications Commission (NCC) in ensuring the continuity of operations and stability in the industry. Furthermore, the discussion revolved around the financial considerations of a name change for Etisalat Nigeria. Eke acknowledged that rebranding comes with significant costs, especially in a time of declining revenues and market uncertainties. However, he suggested that a gradual transition to a new name could mitigate the financial impact and ease the burden on the company. Eke also addressed the concerns raised by investors regarding the regulatory environment and market risks in Nigeria's telecom sector. In conclusion, Eke highlighted both the challenges and opportunities present in Nigeria's telecom industry. While the sector has shown resilience and growth in the past, recent events such as the MTN fine and regulatory changes have raised concerns among investors. Despite these challenges, Nigeria remains an attractive market for telecom companies, with opportunities for expansion and innovation. The coming weeks will be crucial in determining the trajectory of the industry and the role of stakeholders in ensuring its sustainability and growth.