Will new KPIs boost quality of Nigeria's telecom services?

The Nigerian Communications Commission has recently introduced a new set of Key Performance Indicators (KPIs) to improve the Quality of Service provided by telecommunications companies in the country. This move comes in light of the growing concerns surrounding the performance of operators in the sector. Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria, shared his insights on the new KPIs and the investment landscape in the telecom industry during an interview with CNBC Africa. The telecom sector in Nigeria has long been plagued by high operational costs, with energy expenses being a significant challenge for operators. While the recent increase in petrol prices may seem alarming, Emoekpere highlighted that most telcos primarily rely on diesel, which has already been subject to fluctuating costs. The liberalization of diesel prices has been a long-standing issue for the industry, and the current petrol price hike is expected to have minimal direct impact on telecom operations. In addition to energy costs, foreign exchange (FX) losses pose another burden for telecom operators in Nigeria. Despite government interventions, the Naira has struggled against the US dollar, reaching a rate of about 1,630 in recent weeks. Emoekpere discussed how companies are navigating this challenge by restructuring contracts and localizing funding sources. While FX volatility remains a significant concern, operators are proactively adjusting their strategies to mitigate risks. While the telecommunication and information services sector has shown resilience in contributing to Nigeria's GDP growth, there has been a decline in investment inflows. Emoekpere emphasized the need for incentives to attract more investment into the industry and ensure its sustainability. He suggested measures such as tax exemptions and tariff adjustments to encourage businesses to allocate resources to the Nigerian market. With a growing population and market potential, strategic investments are crucial to capitalize on future opportunities. One of the key developments in the telecom sector is the implementation of the Quality of Service Regulation 2024, aimed at improving the performance of telco providers. Emoekpere shared his perspectives on the targets set by the regulation, including a 50% compliance requirement with penalties for non-compliance. While acknowledging the significance of these goals, he underscored the substantial investments needed to meet the stringent KPIs defined in the regulation. Achieving high service quality levels, especially in terms of network availability, demands robust infrastructure and consistent power supply, posing operational challenges for operators. As the industry navigates the evolving regulatory landscape and strives to meet the new KPIs, stakeholders are closely monitoring the sector's performance. With the deadline for the NIFC linkage approaching, telecom companies are facing a series of challenges that require strategic planning and investment. The road ahead for Nigeria's telecom sector entails a delicate balance between regulatory compliance, operational efficiency, and investment attractiveness.