.... As Telecom Distributors Cry Out
The Association of Licenced Telecoms Distributors of Nigeria (ALTDON) has urged the Nigerian Communications Commission to review the annual 2.5 percent levy payable by its members to the Commission.
In a letter dated May 3, 2004, and addressed to the Executive Vice Chairman of the Commission, Engr. Ernest Ndukwe, ALTDON noted the "urgent need to immediately abolish the 2.5 percent annual levy imposed on licensees of sales and installation of telecoms equipment."
The Association said this has become imperative in the light of current market trends which make it impossible for licenced distributors of GSM products to achieve any profit at all from the GSM downstream sector.
The distributors pointed out that the inability of the Commission to properly regulate the sales and distribution of GSM products has given way to the unlicenced distributors to take over the market.
As such, "the demand of 2.5 percent levy by NCC on all licenced dealers is therefore viewed as the death knell for ALTDON members who instead of reaping the fruits of being NCC licenced have been subjugated to burden bearers, arising from NCC's indifference to their fortunes.
They added that the advantage of seeking NCC licence was to ensure adequate regulation of market complying with NCC rules but now many dealers have discovered that it is more blessed to be unlicenced as they stand to reap all the profits, and are free from "NCC yoke". They suggested the abrogation of the levy as this would reduce dealer's losses that are at present un-quantifiable.
The distributors also called on the Commission to ensure the proper regulation of the downstream sector of the GSM industry so that there would be no unfair practices by unlicenced vendors.
They decried a situation where unlicenced distributors are being encouraged by some network operators to take over the business pointing particularly at a situation where petrol stations have been turned to dealers shops.
The letter also touched on forex allocation as the ALTDON urged the NCC to advise the CBN to provide letters of credit to its members so they could import telecom equipment and for the NCC to make sure that only type approved.
The dealers also expressed bitterness on the way they were being exploited, misused and dumped by network operators. They said "it has now become the general practice for all network managements to exploit and misuse dealers/distributors and get away with such abuse and mis-use. They have refused to sign agreements with distributors of their products and even where such agreements are in place, they are usually one-sided, steeply in favour of the network operators who act as overlords." Although the operators announce the existence of new products and the dealers to buy such from, the products are never released to dealers making them look bad in the estimation of customers. Yet, the products are made available to special dealers appointed secretly by these operators.
They said that while they grapple with rising running costs, they open their shops with no products to offer for sale. The pre-paid recharge cards that should have served as bridge now comes in such a way that the profit margin is so low that the dealers make almost nothing for themselves. "Yet some networks without conscience force dealers to buy their products in proportions determined by them, while payments made for products are, sometimes held by networks for weeks without any interest, worse still, sometimes the dealers are forcefully made to pick up swap products for such money.
"This has forced many dealers into unnecessary debts as their banks charge interests on such money trapped up in the vaults of the network operators."The dealers have other worries. These include the incidence of armed robberies aided as it were, the refusal of network operators to block SIM cards, or pre-paid recharge cards stolen from the shops. "yet, painfully, the facility to do this is simple and costs the network operators next to nothing.
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