Market News
Forex scarcity may affect job creation, telcos warn - PUNCH
The Association of Licensed Telecommunications Operators of Nigeria has claimed that foreign exchange scarcity will affect job creation in the telecommunication sector.
ALTON revealed this during the Nigerian Communications Commission industry interactive session with the new Executive Vice Chairman and Chief Executive Officer of the commission, Dr Aminu Maida, in Lagos recently.
While addressing the Federal Government’s intention to create about two million digital jobs by 2025, the Chairman of ALTON, Gbenga Adebayo, said, “We have a need for FX. Some of these requests are on your table. We must be in the first line for access to FX, otherwise, all the job creation we are talking about may not be possible if people cannot pay their FX obligation and buy their applications because of scarcity.
“So, access to FX has become more than important for us.”
Access to FX is critical to telecom services due to the sector’s dependence on foreign inputs.
Earlier at the event, the EVC urged telcos to begin to consider increasing the level of local content in the industry.
Recently, telcos asked for a special forex window to aid their FX needs.
While speaking to the House Committee on Communications, they said, “Liaise with relevant stakeholders such as the CBN for the institution of intervention measures to support the telecommunications sector. Such interventions could include the introduction of a special forex window for the industry, set-up of long-term, low-interest infrastructure funding schemes, etc.”
In their financial statements, MTN Nigeria and Airtel lamented the impact of forex scarcity on their businesses.
MTN said, “Given the protracted forex paucity in the market, MTN Nigeria utilised trade lines to fund the establishment of confirmed irrevocable letters of credit for its network capex investments to sustain revenue growth.”
Airtel added, “In some markets, we face instances of limited supply of foreign currency within the local monetary system. This not only constrains our ability to fully benefit at group level, from strong cash generation by those OpCos but also impacts our ability to make timely foreign currency payments to our international suppliers.”
Meanwhile, the telcos also restated their need for a price review, noting that the current pricing regime in the industry was no longer favourable to their business.
Adebayo stressed, “Our current pricing regime is not sustainable. It is a frank conversation we need to have. The way things are going, I am not sure if we can sustain the industry with the current pricing regime. It is, therefore, important for us to look at what is the best mechanism to get a price review underway that is very important.”
