Independence as an effective pillar to regulation in the Nigerian telecommunications sector

Fufore, Abbas Mohammed
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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).
Telecommunication, Nigeria