The Impact of NCC’s Consumer Promo Ban

Five weeks after the Nigerian Communications Commission (NCC) slammed a blanket ban on all GSM service providers from running consumer promotions and lotteries on their respective networks, consumers and other industry stakeholder are already asking for a review of the decision.

For the consumers, not only have the opportunity to win fabulous prizes ceased, they have also been denied the bonuses, discounts and other freebies offered by the network operators. In to compound their woes, the quality of service, which forms the basis for the NCC action, has not witnessed an significant improvement.

In announcing the blanket ban on November 8, 2012, NCC’s Director, Public Affairs, Mr. Tony Ojobo had sated: “The commission carefully evaluated the complaints received especially against the backdrop of sustaining the integrity of the networks, the general interest of the consumers, the socio-economic impact of the promotions on operators and other relevant stakeholders, before concluding on the ban.”

Ojobo explained that the ban would affect all proposed and approved promotions and lotteries on which the commission had given approval further to the memorandum of understanding (MOU) entered into with the National Lottery Regulatory Commission (NLRC). He said the ban remains in force until such a time as may be determined by the commission.

But quite a number of rational subscribers and consumer rights activists query NCC for not applying the result of the series of quality of service checks conducted on the networks. According to Mrs Ebele Nwachukwu, a marketing communications consultant based in Lagos, NCC should have made the spirited effort to assess the network operators individually and determine their capability to handle consumer promotions. “It is in the spirit of liberalisation to promote healthy competition. We cannot be asking for foreign or local investors are yet be introducing policies that would stifle the business growth and fairness,” she said.

Indeed, in the discharge of its functions, NCC had previously commended some of the operators for meeting up to expectations in terms of quality of service. For instance, NCC announced that its Audit Report for March and April 2012 rated Airtel as the best operator for good quality of service. This is in spite of the protracted troubles the network had experienced, including ownership battles and re-branding which has led to its transformation from Econet Wireless to Airtel Nigeria, with Vodacom, Celtel and Zain in between, all within 11 years.

Just before NCC brought down the hammer on all the GSM operators, it had conducted yet another test on the networks. Known as the Nationwide Benchmark Drive Test, it was the first of its kind and it covered between July and September this year, which falls within the period the consumer promotions were heavy on the various networks. The survey concentrated on Call Completion Rate, which encompasses the major network KPI (call drop and congestion), involving MTN, Globacom, Airtel and Etisalat. The service providers were ranked in Lagos and the six geo-political zones of southwest, southeast, south south, north central, northeast and northwest.

The Drive Test report again vindicated Airtel in terms of quality of service. The operator was ranked No 1 in the three regions of south south (88 per cent), southwest (88 per cent) and northeast (78 per cent). In the other regions, Airtel came a close second – Lagos (88 per cent), north central (92 per cent), northwest (82 per cent) and southeast (75 per cent).

MTN, which started operation the same time with the then Econet Wireless (now Airtel Nigeria), finished third in north central (74 per cent), south south (71 per cent), and northeast (58 per cent); and fourth in the other zones – Lagos (72 per cent), southwest (72 per cent), northwest (59 per cent) and southeast (53 per cent).

Globacom launched commercial service two years after both MTN and the then Econet Wireless and broke into the market with the unique offering of per second billing at the time the pacesetters said that was not immediately possible.

According to the Drive Test report, Glo came third in Lagos (88 per cent), southwest (79 per cent), northwest (78 per cent) and southeast (59 per cent) and fourth in north central (78 per cent), south south (78 per cent) and northeast (53 per cent).

The latest GSM operator Etisalat, which has a four-year experience in the Nigerian market, also confirmed its standard, had earlier been rated best telecommunications service provider for good quality of service  by the NCC based on the Quality of Service Key Performance Indicator audit report released in February 2012.

In the Benchmark Drive Test, Etisalat polled behind Airtel in south south having recorded 86 per cent, southwest (82 per cent) and northeast (67 per cent). It also recorded first position in the other regions – north central (94 per cent), Lagos (92 per cent), northwest (90 per cent) and southeast (85 per cent) – with Airtel coming second in each of these areas.

“From such a quality of service check, analysts had thought NCC would apply its own prescription in dealing with the subscribers’ headache. Rather, the agency chose to come down hard on all the operators. The indefinite ban on all promotions and lotteries by network operators has continued to generate divergent opinions,” one industry analyst said.

Not a few subscribers believe that NCC should have taken the pains to sanction only those networks that have demonstrated lack of capacity to handle the increased traffic on the platforms as a result of the consumer promotions.

To Mr. Wale Thomas, a marketing communications consultant, the NCC is behaving like most establishments in Nigeria that would always look for the easy way out of any challenge. “Why would NCC institute a check on the network and refuse to implement the result of its own findings in dealing with culprits?” he asked. “The agency should have imposed the ban on networks that have failed to meet minimal standards rather than sweep all of them along.”

Commenting on the blanket ban, Mr. Moses Akapo, who operates a mobile phone dealership at the Computer Village in Ikeja, Lagos, advised the NCC to encourage the spirit of competition among the network operators, which would ultimately be to the benefits of the consumer. “If one or two network operators are found wanting and the NCC choose to impose the same penalty on all the licensees, it would be encouraging mediocrity rather than promoting meritocracy,” Akapo said.

In order to promote the spirit of competition, which will in the end promote customer satisfaction, a section of GSM subscribers and consumer rights activists believe that NCC should have applied its own reports in coming to the rescue of the consumers given the network congestion that led to the ban.

Mr Atilola Olanipekun, a financial analyst, said that the blanket ban would bring about huge challenges in the business environment and even for the consumer who the NCC seeks to protect. According to him, healthy rivalry and competition foster customer satisfaction.

The NCC ban may be sending the unintended signals to potential investors in the sector – that the agency can undo their marketing plans and their business goals in the long term as sales drive sustain revenue, from which these investors pay huge taxes and fees to all levels of governments.

For any investor, increasing sales revenue is critical to sustained business operations. Exploiting sales promotion is not criminal. Rather than send wrong signals to potential investors, the NCC should ramp up its consumer education campaigns to keep the consumer properly informed.

NCC should not throw away the baby with the bath water, which the sweeping ban may bring about.