Independence as an effective pillar to regulation in the Nigerian telecommunications sector
Date
2012-09-19
Authors
Fufore, Abbas Mohammed
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Abstract
Regulator independence has been widely acknowledged by a large
segment of experts as significant for the growth and development of
the telecoms industry. However, the impact of regulatory
independence on industry growth has not been prominently analysed
from the perspective of developing countries. This study was therefore
conceived and designed to determine whether the degree of
independence of the Nigerian Communication Commission (NCC) has
had any effect on the growth and development of the telecoms
industry in Nigeria. The parameters for regulator independence
examined include; stability of tenure, relationship between the
regulator and the various arms of government, fiscal and
organisational autonomy, regulator legitimacy as well as the regulator
authority to regulate. While the parameters for growth examined
include: access to service, usage of service, geographical spread, and
quality of service, competition and pricing. A connection between the
degree of regulator independence and industry growth and
development was subsequently established.
A descriptive method of analysis was adopted using the TRE technique
of assessment and the study confirmed that the NCC is
fairly/reasonably independent. Furthermore, evidence from both
primary and secondary sources indicated a remarkable but modest
growth and development in the Nigeria telecoms industry from 2001 to
2010. The study found that Nigeria’s communication sector
development was positively affected by the degree of independence of
the regulator and government policy choices in the 1990s.
The result of this study may be an indicator of the success of the
telecoms market liberalisation programme embarked upon by the
Nigerian government.
ii
The telecoms market liberalisation facilitated the entry of many
telecoms companies providing various services as a result of which
Nigeria attracted considerable foreign investments making the country
one of the fastest growing and biggest telecoms market in Africa.
As a consequence of this development, the mobile sector of the
telecoms industry has seen triple digit growth rates for five years in a
row since competition was introduced. A number of additional players
have also entered the market under a new unified licensing regime
which is expected to boost the country’s underdeveloped Internet and
broadband sector. Third generation mobile and wireless broadband
services are being rolled out at a rapid pace. All this development is
supposedly as a result of the creation of an independent regulator, the
Nigeria Communication Commission (NCC).
On the other hand, this study shows that regulatory independence by
itself is not a sufficient condition to promote sector growth. This is
because, despite the fact that the study found the regulator (NCC) to
be fairly and reasonably independent, Nigeria remains at relatively
moderate levels of market penetration ― around 50% ― as reported
by Baez and Kechiche (2010, p.5).
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Keywords
Telecommunication, Nigeria