Telecommunications: Corporate Governance Must Rise To Meet The Sector’s Scale And Complexity-NCC

By Cyber Era NG Special Correspondents

In a bold step to validate its rating as a forward-looking regulatory authority not only in Africa, but the world at large, the Nigerian Communications Commission(NCC), has screwed up governance rules to shore up the integrity of the telecommunications sector in Nigeria now estimated at  U$9.52billion, with the recent launch of the 2025 Guidelines on Corporate Governance, signposting the commencement of stricter enforcement regime with the aim of improving audit standards, risk management, and transparency within the country’s telecommunications sector.

It will be recalled that the maiden Guidelines on Corporate Governance was launched in 2014 under the dispensation of  former EVC/CEO at NCC, Dr. Ernest Ndukwe, credited with exciting the revolution in the industry.

According to a recent report by Mordor Intelligence, the telecom industry in Nigeria is currently valued at US$9.52 billion in 2025 and is projected to rise to US$11.97 billion by 2030. With the telecommunications sector’s rating as one of the most critical drivers of Nigeria’s digital economy, experts believe that the sector’s growth in geometric terms, makes it imperative for upping the ante for ethical compliance and robust corporate governance.

The EVC/CEO at NCC, Dr. Aminu Maida at the workshop and formal launch of guidelines on corporate governance for the Nigerian telecommunications industry, in Lagos, south west, Nigeria, Wednesday, August 6, 2025, said the new framework was not just about compliance but securing the long-term sustainability of telecom businesses, networks, and investor confidence.

Dr. Maida emphasized that corporate governance was no longer a soft requirement but a strategic necessity for telcos operating in an environment characterized by cybersecurity threats, energy constraints, climate pressures, and rising customer expectations.

Maida noted that under the new regime, telecom operators must now ensure balanced board structures, enhanced transparency, and tighter internal controls adding that board composition must reflect executive, non-executive, and independent directors with proven expertise in ICT and cybersecurity.

A pivotal focus area of the guidelines is the fortification of audit functions and risk control systems across telecom companies and the Commission now requires operators to systematically identify and mitigate material risks, with oversight provided by empowered internal audit teams. Licensees  of the Commission are also required to submit mid-year and annual compliance reports certified by their boards.

At the launch, the NCC also announced the formal recognition of regulatory officers within licensees’ operations as key contacts for compliance reporting.

These measures, according to Maida, were aimed at ensuring that telecom boards and management teams were positioned to deliver reliable services, ensure supply chain integrity, and reduce operational vulnerabilities.

The NCC helmsman disclosed that the Commission conducted a comprehensive analysis linking governance quality with financial performance, service reliability, and regulatory compliance, while saying that the findings were clear and compelling as companies with stronger corporate governance outperformed their peers on all indicators.

He explained that the new enforcement regime was evidence-based and designed to reward transparency, discipline, and responsible leadership.

The Commission emphasized that while the guidelines would be implemented in phases based on license classes, enforcement would be firm. According to the Commission, licensees  who failed to meet compliance obligations within stipulated remediation windows, would be sanctioned.

The NCC forewarned that the stricter governance regime might bring inevitable short-term disruptions maintaining, however, that the long-term benefits far outstripped the cost, even as it  pledged continued support to licensees through supervision, guidance, and capacity building.

Maida advised operators to see the guidelines not as a burden but as a tool for long-term value creation, for investors, consumers, and the national economy.

Said he: “The telecoms sector, now central to Nigeria’s commerce, finance, education, and public services, must evolve with the demands of the digital age. With over 200 million subscriptions and growing economic significance, corporate governance must rise to meet the sector’s scale and complexity.”

A senior advocate of Nigeria, who chaired the committee that produced the pioneer Code of Corporate Governance for the telecom industry in 2014, Prof. Fabian Ajogwu (SAN), commended the NCC for updating the document in line with modern realities such as artificial intelligence, cybersecurity, and ESG imperatives.

Coordinating director, Financial Reporting Council of Nigeria (FRC) Titus Osawe lauded the initiative, calling the guidelines a major milestone in deepening good governance in a critical sector of the economy. He reiterated that sector-specific governance frameworks like NCC’s are essential for reinforcing transparency and accountability in Nigeria’s business environment.

Elsewhere, in the United Kingdom, governance failings have been identified as putting broadband sector at risk, warns advocacy body, the Chartered Institute of Internal Auditors, as it flagged up a governance gap and a heightened risk of collapse in the broadband sector due to lack of internal audit across major suppliers.

Almost half of the UK’s leading broadband providers lack an internal audit function – leaving them exposed to unchecked risks and increasing the likelihood of corporate collapse.

An open letter to telecoms regulator Ofcom from the Chartered Institute of Internal Auditors (Chartered IIA) has warned that widespread lack of internal audit across broadband providers in the UK is undermining the financial resilience of the sector.

The Chartered IIA has described the situation as a major audit and governance gap in a critical national infrastructure sector, bearing in mind the sector’s strategic importance to the UK’s digital economy. It is calling on Ofcom to follow the lead of financial regulators like the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) by setting a clear regulatory expectation that all broadband firms must have appropriate internal audit capabilities in place.

Vulnerable to collapse

The Chartered IIA warns that without independent assurance on internal controls and risk management, these companies could be more vulnerable to collapse, as seen in the energy sector, where none of the 30 failed suppliers – including Bulb – had an internal audit function.

The letter to Ofcom Chief Executive Dame Melanie Dawes urges the regulator to introduce a clear expectation for broadband companies to have internal audit to ensure robust governance, risk management and internal controls, after it emerged that six of the UK’s 13 major broadband providers – Community Fibre, Hyperoptic, Utility Warehouse, YouFibre, Glide, and CityFibre – currently operate without internal audit.

These companies collectively serve around two million customers and, in some cases, build and maintain their own infrastructure networks. CityFibre, for example, is the UK’s third-largest ISP infrastructure provider, supporting major ISPs such as Vodafone, TalkTalk, and Zen Internet.

Serious audit and governance weakness

Chief Executive of the Chartered IIA, Anne Kiem OBE says: “Broadband companies are now essential to daily life and the economy. Yet nearly half of the UK’s major broadband providers are operating without internal audit. This is a serious audit and governance weakness. We’ve seen time and again the damage caused when companies collapse due to failures that might have been prevented with proper internal controls. We cannot afford to make the same mistakes with broadband companies.”

The Chartered IIA notes in its letter that there is currently no regulatory requirement or guidance from Ofcom that reflects the critical role of internal audit in ensuring effective governance, internal control and risk management.

The letter draws comparisons with other regulators that have acted decisively. Ofgem now requires energy suppliers to report on their internal audit capability in its updated Financial Responsibility Principle Guidance, while the PRA and the FCA mandate internal audit in financial services.

Strengthening oversight

The letter concludes: “Setting a clear regulatory expectation for broadband companies to have appropriate internal audit arrangements would strengthen independent oversight of how key risks are managed, improve organisational resilience, build investor confidence, and support the growth of the UK’s digital economy.”

Corporate Governance and Stewardship Manager at ICAEW, Victoria Geroe says: “A strong internal audit function is core to good corporate governance and can mean the difference between successful and unsuccessful management of risk and internal controls.

“We support updated, sector-inclusive standards and stronger oversight via audit committees and assurance mapping, especially in publicly crucial domains such as broadband providers. Implementing strong internal audit functions is key to ensuring resilience and safeguarding public trust in a fast-evolving digital landscape.”