Consumer Protection in Relation to Quality of Service in the Telecommunications Sector in Nigeria

ABSTRACT

Consumer protection seeks to promote a fair, accessible and sustainable market place for consumer products and services. In the telecommunications sector, which is the focus of this work, consumers experience problems in different areas such as poor quality of service that has resulted in increased dropped calls, unsolicited text messages, credit depletions and poor Internet connectivity, among others. The licensing, privatisation and liberalisation of telecommunications companies in Nigeria heralded full competition in which the sector is now dominated by private corporate entities formed essentially for the purpose of making profit. This has exposed consumers to exploitation and denial of the right to good quality service. The Nigerian Communications Act,2003 which regulates the telecommunications sector established the Nigerian Communications Commission. Pursuant to its mandate, the Commission issued the Nigerian Communications Quality of Service Regulations 2013which set basic minimum quality level for all operators among other things. The Regulations seek to ensure that service providers adhere to minimum performance standards and indices relating to the quality of service supplied to consumers. This work seeks to assess the legal and institutional framework for consumer protection in relation to quality of service in the telecommunications sector, identify the challenges of enforcement of quality of service standards and ascertain the improvements that can impact on the quality of service in the Nigerian telecommunications sector. The study found that there is a hindrance to consumer access to redress through the NCC as the Commission does not have offices in most parts of Nigeria, as such, consumers at the grassroots may not be able to seek redress. Also, service providers are seriously lagging in reaching the required performance index set by the Commission and the enforcement procedures adopted by the commission are not adequate which have led to non-achievement of effective consumer protection and good service quality. The work recommends stricter enforcement of relevant regulations by the regulator, amendment of existing statutes as well as improved consumer education.

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the study

In recent years, the capacity and speed of telecommunications (telecoms) networks have grown exponentially. The capacity and speed of telecoms networks have multiplied over the years and this is not unconnected with technological growth and developments. The basic tools for these technological growth and developments are telecommunications. It cannot be overemphasized, therefore, as the saying goes that the world is fast becoming a global village of which telecoms is a key player. Telecoms is the engine of the world economy with transactions in billions of dollars being done over the telephone and the Internet. The Telecoms sector is one of the sectors that continue to grow and develop despite the economic situation in the world. The sector is developed regardless of geographical position, government and the state of economy. Telecoms is one of the most important infrastructures essential to the socio-economic wellbeing of any nation. The globalization of world economy has further amplified the importance of telecoms to the economy. The phenomenal growth of Global System for Mobile Communications (GSM) since its introduction in Nigeria in 2001 confirms the fact that telecoms has impacted much in the society. Due to the pivotal roles of telecoms in the economic growth and development in Nigeria, contemporary issues regarding quality of service evidently arise, which need urgent attention to ensure the effectiveness, efficiency and contribution telecoms to the world economy. The resultant effect of this is the need to reform telecoms sector, hence, the liberalisation and privatisation of the telecoms sector.

Notwithstanding the need for reforms and regulatory frameworks for telecoms, the embryonic nature of quality of service implementation in Nigeria and some other developing economies have posed serious challenges towards the protection of telecoms consumers in Nigeria. Nigeria is the most populous country in Africa with a population of about 167 million and an area of approximately 923,768sq km. The potentials in Nigeria are numerous, the same way China can be compared to Nigeria with regards to purchasing power parity and second largest economy by nominal GDP as Nigeria is a major market concerning the telecommunications sector in Africa. Nigeria stands a better chance of attracting investors to invest in the economy especially in the telecommunications sector and become the China in Africa because it is one of the top ten fastest growing telecoms market in the world. The Nigerian Telecommunications Sector is the fastest growing Sector in Nigeria. It is large in terms of size compared to those of some African countries .Currently, the News Agency of Nigeria (NAN) reports that active lines in Nigeria stood at 151,017,244 for the month of December, 2015.

Prior to the bid for Digital Mobile Licences (DML) and Fixed Wireless Access (FWA), Nigeria had the lowest telephone penetration in the world after Mongolia and Afghanistan. The nation and its people had been starved of access to basic telephone services and eagerly awaited the commercial launch of the telephone licenses. However, the poor state of the industry began to be addressed in 1992 when the telecommunications sector was opened up for liberalisation. The global trend in the market, which is towards deregulation and liberalisation of services, has been further accelerated by the signing of the World Trade Organisation (WTO) agreement on Basic Telecommunications Services and the General Agreement on Trade in Services (GATS) which preceded it. These agreement oblige signatories to deregulate national telecommunications industries. Although Nigeria is not a signatory to this accord, she is a member of WTO, the International Telecommunications Union (ITU), an arm of the United Nations and the West African Telecommunications Regulatory Association (WATRA). It has been agreed that the Agreement on Basic Telecommunications Services will affect all ITU member states and sector members because the 72 countries which made the commitment collectively, account for more than 93% of global telecommunications revenue. The areas covered under the agreement include voice data fax, radio and satellite. These agreements progressively open up the telecommunications sector to deregulation and liberalisation.

The telecommunications industry in Nigeria witnessed the deregulation of telecommunication services in 1992 through the promulgation of Nigerian Communications Act (NCA) No.75 of 1992, introducing private participation in the provision of telecommunications services in Nigeria, thus ending the state owned Nitel’s monopoly of the sector and ushering in competition. The Act was repealed by the Nigerian Communications Act, 2003, which among others strengthened the regulatory authority by ensuring its independence.

The Nigerian Communications Act, 2003 established the Nigerian Communications Commission (NCC) as the sole independent regulatory body for the country’s telecommunications industry. The Nigerian Communications Act has been very well drafted, making the NCC truly independent by enabling it to shift its focus from regulating the licensing of operators and ensuring the wide spread availability of phones to managing the competition in the market place and protecting consumers, emphasizing on service monitoring and compliance with the laws and regulations of the industry.
The liberalisation and privatisation of telecommunications sector came with competition in which 4 telecommunications service providers were licensed on the Global System for Mobile Communications (GSM) network in 2001.

The revolution in the telecommunications sector ushered in three major stakeholders: operators, consumers and regulator/government. Modern day telecommunications sector stands on a tripod made up of the operators or service providers who are directly involved in the business of providing telecommunications services with the aim of profiting. The regulators, usually government agencies, are responsible for creating enabling environment for the service providers to operate; and thirdly, consumers (users of the service).

Collectively, these stakeholders make up the pillars upon which the sector stands. They co-exist and are interdependent. The operators obtain authority to carry out business from the regulator, who also serves as umpire to ensure that the operators compete favourably and fairly with each other. In addition, the regulator ensures that the consumers get value for their money. The regulators can only function where there are operators. It also, in most cases, gets funding from levies and fees paid by operators.

The most important of the stakeholders are the consumers. They are the raison d’eter for the existence of the other two. The operators are in business because the consumers are there to patronize them. Similarly, the regulators exist by an implied mandate from the consumers, through the government to not only issue licence authorization to competent operators but also ensure that their products and services are satisfactory. According to Howells and Weather-hill, in a highly liberalized market with competition at its best.

The consumer, indeed, is dominant. He or she exercises the power of commercial life or death over suppliers in the shape of his or her purchasing decision. The consumer will be supplied according to his or her preference…. There are simply products of different types from which the consumer can choose.

It is worthy to note that the interest of the regulator should basically be the consumers, having derived its authority from the consumers. The consumer of telecommunications products and services in Nigeria today are varied and their tastes, needs and expectations are also varied. Generally, the consumer wants services available at all times and at every place. Furthermore, the consumer wants services to be of good quality and affordable.

When consumers experienced difficulties in accessing and connecting to telecommunications services, the NCC came up with the Quality of Service Regulations 2013 to address the challenge. The Regulations contain provisions, which mandate the operators to achieve certain demanding indices called Key Performance Indicators (KPIs) for Quality of Service.

Quality of service is the major KPI being used in determining the efficiency of an industry regarding the services rendered. There are three major factors adopted in evaluating quality of service of an operator in the telecommunications industry. These are accessibility, retainability and connection quality. These three factors must be upheld towards ensuring an effective and efficient quality of service.

1.2 Statement of the Research Problem

The researcher observes that the liberalisation and privatisation of telecommunications sector have shifted the focus of service providers towards profit making thereby exposing the subscribers to exploitation by way of credit depletions, unsolicited text messages, poor internet connection and a total denial of the right to good quality of service.

The Nigerian Communications Act did not make an elaborate provision on the compensation of the victims whose rights to good quality of service have been infringed and there is no provision on prioritization of consumer education and awareness creation for consumers at the grassroots.

There is the need for a more stringent provision on penalization of service providers who violet the provisions of the Act.

1.3 Research Questions

This research will address three main questions;

1. Are the current regulatory regimes in the Nigerian Telecommunications industry capable of enhancing consumer protection and good quality of telecommunication services?

2. To what extent have the enforcement measures towards implementing quality of service standards been adhered to?

3. Are the Nigerian laws adequate for addressing the challenges facing the quality of service aspect of telecommunications sector?

1.4 Aim and Objectives of the Study

The aim of the study is to assess the level consumer protection in relation to quality of service in the telecommunications sector in Nigeria. The specific objectives are centred on three points:

1. To determine if the current regulatory regimes in the Nigerian Telecommunications industry are capable of enhancing consumer protection and good quality of telecommunication services.

2. To determine the extent which the enforcement measures towards implementing quality of service standards have been adhered to.

3. To determine if the Nigerian laws are adequate for addressing the challenges facing the quality of service aspect of telecommunications sector.

1.5 Scope of the Study

This work is central to protection of telecommunication consumers but it is limited in scope in the sense that it only examines protection in relation to quality of service in the telecommunications sector in Nigeria.

1.6 Research Methodology

The methodology adopted in this research is doctrinal design. Reliance was placed on both primary and secondary data collection. The primary sources include relevant statutes and case Laws. The secondary sources on the other hand are textbooks, journal articles, newspaper publications and Internet sources.