‘90% Of Telecom Operators May Close Shop In 5 Years’ – Barr. Oke

90 per cent of homegrown telecom operators may close shops within the next five years, a telecom legal and regulatory expert, Barr. Ayoola Oke has said.

Ole, who spoke on the issues affecting the local operators Thursday in Lagos, said the bigger telecom operators are suffocating the local ones.

Oke described the industry as subdivided into three tiers, with tier 1 for big network operators Mobile Network Operators (GSM); Starcomms, MTS 1st Wireless, Intercellular, Startech and the likes belonging to tier 2 and smaller operators such as Internet service providers, PNLs, International Data Access Service Providers, Swift Telephone networks, Rainbownet and the likes for Tier 3.

He further stated that almost all the operators that were active and vibrant 14 years ago are now dead or struggling, leaving the tier 2 space almost empty, noting that tier 1 operators face no competition or incentive to improve.

He said none of the local operators in Tier 3 have been able to grow to become Tier 2 operators because they are dying, adding that the country would be left with a tier 1 Oligopoly if the homegrown operators eventually die out.

Oke, who is the former special assistant, cited the instance of bigger operators asking smaller operators to pay for termination rate in dollars rather than the country’s legal tender which is the naira and consequently leading to their disconnection.

He said: “It is not a prophecy. If certain regulatory steps are not taken and things not done the way they should, more than 90 per cent of homegrown local telecoms operators will probably all die out in the next 5 years like what happened to tier 1 operator in the past 14 years and that will be terrible for the country and consumers.

“From the way the industry is structured now, the bigger operators are suffocating the industry.”