High operating cost, threat to telecom sector – BTel boss

The rising operational costs and the risk of a customer loyalty crisis are posing significant challenges to Nigeria’s telecommunications sector. In this interview with TEMITOPE AINA, Managing Director/Chief Executive Officer of Briclinks Africa Plc, Mohammed Buhari, discusses the impact of the recent 50 per cent tariff increase approved by the Nigeria Communications Commission

How is the new tariff regime changing the dynamics of Nigeria’s telecommunications industry?

The new tariff regime in Nigeria’s telecommunications industry is significantly altering the landscape. We can see the recent approval of a 50 per cent increase in telecommunications tariffs by the Nigeria Communications Commission has sparked intense debate across the country, drawing strong opposition from various quarters, most notably the Nigeria Labour Congress. I will say, however, that the cost of providing telecommunications services has escalated exponentially. Looking at foreign exchange today and the current inflation, telecom operators who rely on imported equipment and infrastructure to maintain service standards are suffocating. Without this adjustment, the sector faces an inevitable decline in service quality and diminished investment.

As I always emphasise, at Briclinks Africa PLC we strive to balance market trends and changing conditions with our customers’ needs, ensuring we continue to create value for them.

Do you think the recent price hikes will trigger a customer loyalty crisis?

The recent price hikes in the telecom industry could indeed trigger a customer loyalty crisis. When prices increase significantly, customers often feel the pinch and may start looking for cheaper alternatives. This can lead to higher customer churn rates (discontinuing) as they switch to providers offering better value for money. It will be crucial for telecom companies to strike a balance between maintaining profitability and ensuring customer satisfaction to navigate this challenging landscape successfully.

With rising operational costs, what innovative strategies are telecom companies using to stay afloat?

At Briclinks Africa PLC, we have implemented several innovative strategies to manage rising operational costs while continuing to deliver value to our customers. We have adopted automation tools to streamline our operations and reduce manual interventions. This has significantly cut down on operational expenses and improved service delivery speeds. For instance, tools like chatbots and virtual assistants enhance customer service by providing instant support and handling routine enquiries.

What’s your take on the current regulatory landscape: facilitator or bottleneck?

The current regulatory landscape in Nigeria’s telecommunications industry can be seen as both a facilitator and a bottleneck, depending on the perspective.

The Nigerian Communications Commission and other regulatory bodies have implemented policies that promote competition, protect consumer rights, and encourage investment in infrastructure. These regulations have helped create a more transparent and competitive market, which benefits both consumers and operators. A good example is the introduction of the MVNO in Nigeria, giving consumers more options while encouraging investment and competition in the telecom sector. On the other hand, some regulations can be seen as bottlenecks, particularly when they impose stringent requirements or slow down the approval processes for new services and technologies. For example, regarding the enforcement of the National Identification Number and SIM regulations, I understand the rationale and its importance, but these organisations delay carrying out requests from operators, thereby causing frustration in onboarding processes.

Also, limited access to financing. High interest rates and limited access to long-term financing options can hinder our ability to invest in expanding and upgrading infrastructures. For me, it’s both a facilitator and a bottleneck depending on the situation.

How do you see global economic shifts influencing Nigeria’s telecom industry?

Global economic shifts have a profound impact on Nigeria’s telecom industry. Exchange rate volatility can affect the cost of importing telecom equipment and technology, leading to higher operational costs. Inflation and rising global prices for essential components and services, such as energy and network infrastructure, also impact our cost structure. Additionally, foreign investment flows are influenced by global economic conditions. While global economic shifts pose challenges, they also offer opportunities for innovation by staying agile and proactive in other to navigate these shifts and continue to provide reliable services to our customers.

Would ypu say we on the verge of a digital revolution, or is Nigeria’s telecom sector lagging behind?

Nigeria’s telecom sector is certainly on the brink of a digital revolution. We’ve made significant strides in recent years, with increased internet penetration, the rollout of both the 4G and 5G technology, and a growing emphasis on digital literacy and skills development. However, there are still challenges to overcome, such as infrastructure limitations in rural areas and regulatory bottlenecks. While we are making progress, it’s crucial to continue investing in infrastructure and ensure that all Nigerians have access to reliable and affordable connectivity. Among other factors, if we properly address these challenges, we can fully realise the potential of a digital revolution in Nigeria.

What’s the next big disruption in telecommunications that no one’s talking about yet?

One disruption that’s not getting much attention yet is the real-time data tracking and crowdsourcing initiatives. The Nigerian Communications Commission has partnered with Swedfund to launch the Crowdsourcing Quality of Experience project. The NCC-Swedfund partnership is a step in the right direction, offering a fresh approach to addressing Nigeria’s telecom challenges.

However, its success will depend on effective implementation, strong regulatory enforcement, and cooperation from service providers.

It can have a major effect, but this is contingent on the commitment of all stakeholders to ensure its success. If not, it might end up being another initiative that, despite good intentions, fails to bring about substantial change for consumers.

Another concern is whether the NCC can manage and act on real-time data effectively.

The success of this initiative relies on how well the NCC can process and respond to real-time data collected from users, but hopefully, they pull through successfully.

What role does infrastructure investment play in the future of Nigeria’s telecom industry?

Infrastructure investment is absolutely critical to the future of Nigeria’s telecom industry, and here’s why. It enhances connectivity. Investing in infrastructure ensures that more people have access to reliable and high-speed internet. This is essential for economic growth, as it enables businesses to operate more efficiently.

Also, by expanding network coverage to rural and underserved areas, infrastructure investment helps bridge the digital divide. This promotes inclusive growth and ensures that everyone, regardless of their location, can benefit from digital services.

Lastly, I will say that infrastructure investment is not just about improving telecom services but also about laying the foundation for a more connected, innovative, and prosperous Nigeria.

Briclinks Africa Plc recently reported a profit despite industry challenges—what’s driving this performance?

Our success boils down to a few key factors. Firstly, we have an incredibly talented and dedicated team that works tirelessly to drive our vision forward.

Secondly, we have strongly emphasised understanding our customer’s needs and delivering exceptional value through our products and services. We listen to our customers and adapt quickly to their feedback while still working in line with the Commission’s regulations. (Although this can be very dicey because of the strict nature of our regulations, we try our best.)

Lastly, we constantly seek new ways to improve our products and services. We’ve been able to stay ahead of the curve and meet the evolving demands of the market.

With the new tariff hike shaking up the telecom space, how are you recalibrating your revenue targets?

Despite the recent tariff hike shaking up the telecom space, we’re recalibrating our revenue targets by focusing on improving customer retention with better value packages in line with our regulators (the commission). We have also tried our best to cut operational costs as much as required, that is, streamlining our operations without affecting the quality of our services. This has really helped us stay competitive and keep our revenue on track.

Where do you see Briclinks Africa Plc in the next five years—any bold predictions?

In the next five years, I see Briclinks Africa Plc becoming a leading force in Nigeria’s telecom industry. We aim to achieve and also complete some of our goals already in progress. We will expand our services to underserved and rural areas, bridging the digital divide and bringing connectivity to every corner of Nigeria.

As one of the few, if not the only, MVNOs who is listed on the Nigerian Exchange, we have been urged by the Nigerian Exchange to embrace sustainability practices, which are already in progress. We are committed to sustainability practices, investing in green technologies and practices to reduce our environmental footprint and contribute to a cleaner, greener future.

We are also in the process of developing strategic partnerships with global tech giants as well as local businesses to drive growth, foster innovation, and expand our service offerings to every corner of the country.

We believe Briclinks Africa Plc will not only grow in size but also create a lasting impact in transforming Nigeria’s telecom landscape in years to come.

Amidst regulatory constraints and competitive pressures, do you see mergers and acquisitions as a strategic path for survival, and how would this reshape Nigeria’s telecom landscape?

I see mergers and acquisitions as an essential tool for surviving and thriving in Nigeria’s telecom industry. In this highly competitive market, it is not just about being innovative and competitive; it is about having a solid survival strategy.

M&A is a tool to combine resources, cut costs, and increase market share, which is crucial in staying ahead. By merging with other companies, especially like-minded companies, we can streamline operations and offer better services to our customers. This approach strengthens our market position and ensures long-term sustainability and growth.

With growing discontent over service quality, do you believe regulatory frameworks are stringent enough to protect consumers, or is there a need for more robust accountability mechanisms?

I recognise the growing concerns about service quality in Nigeria’s telecom sector. It is a critical issue that demands attention. Addressing this, we must consider the current regulatory frameworks and whether they are stringent enough to protect consumers.

Firstly, the Nigerian Communications Commission has established various regulations and standards aimed at ensuring service quality and consumer protection. These frameworks are designed to hold telecom operators accountable and promote fair competition.

While the NCC’s initiatives are commendable, there is room for more robust accountability measures, including periodic reviews of regulatory frameworks, both on the side of operators and consumers as well. It is essential to adapt to the evolving telecom landscape and emerging challenges.