More broadband infrastructure, less Internet accessibility hurdles

As the nation’s Internet accessibility problems increase by the day, investment in broadband infrastructure across the country is the long-awaited solution that policymakers should by no means overlook, writes BEN UZOR JR

No doubt, the jet age is an era that has been greeted by enormous inventions and display of human ingenuity which has gone a long way in revolutionising the global society and the economy of many countries across the globe. Interestingly, human ingenuity in the area of technological developments have made the world a global village as it has brought people from different parts of the world closer with little or no difficulty.

The internet, which has continued to be an integrating force, has melded the technology of communications and computing to provide instant connectivity and global information services to all its users. This has invariably created significant impact in the business world with applications such as e-commerce, online banking and e-payments, e-health, e-learning and e-government is carried out even as technology keeps evolving rapidly.

While the aging population struggles to embrace this emerging trend in information and communication Technology (ICT), the younger generation can’t even imagine life without it. As Nigeria continues its quest to become one of the 20 leading economies by 2020, stakeholders in the Information and Communications Technology (ICT) sector are concerned about the current level of internet connectivity and penetration in the country.

This is against the backdrop that increased broadband penetration, according to experts has the power to spur economic growth by creating efficiency for society, businesses and consumers. According to them, broadband is critical in nation building. To further buttress this view, Ericsson and Arthur D. Little in a study carried out specifically to quantify the impact of broadband speed on GDP. It was concluded that for every 10 percentage point increase in broadband penetration GDP increases by 1 percent.

This growth however stems from a combination of direct, indirect and induced effects. Direct and indirect effects provide a short to medium term stimulus to the economy. The induced effect, which includes the creation of new services and businesses, is the most sustainable dimension and could represent as much as one third of the mentioned GDP growth.

While some stakeholders in the telecom sector believe that the Nigerian Communications Commission (NCC), the telecom industry regulator, may not be doing enough to encourage providers of fibre optic backbones that have since landed their submarine cables at the country’s shores, the commission some schools of thought are of the view that the commission’s new broadband strategy based on an open access model if implemented properly may go a long way in increasing internet access in the country.

They maintained that inadequate fibre transmission backbone required to aid nationwide distribution of the enormous bandwidth emanating from emerging underwater cable infrastructure remains a major stumbling block to wider broadband internet access in Nigeria.

Poor internet service persists

Commenting on this issue, Funke Opeke, chief executive officer, Main One Cable Company which has laid a 7,000 km fibre optic cable linking West Africa to Europe, noted the absence of robust national backbone that has increased the cost of moving capacity around the country. According to her, “the price of moving capacity from Victoria Island to Ikeja in Lagos is higher was in most cases higher than the cost of moving capacity from Lagos to London.”

BusinessDay learnt that it cost $600 per megabyte to get connected from Lagos to London compared with $1, 100 between Lagos and Abuja. Industry experts who spoke with BusinessDay criticised governments’ inability to encourage investment geared towards strengthening backbone transmission networks, labeling it as counterproductive to economic development as majority of the populace especially rural areas would be denied access to reasonably priced broadband services.

Opeke revealed that the major challenge of delivering broadband in Nigeria is distribution. According to the Main One CEO, “the federal government must conduct a review of the national backbone infrastructure, effectively manage the country national frequency spectrum resource as well as encourage infrastructure sharing amongst telecoms operators in order to improve internet penetration in the country. Industry watchers have earlier argued that terrestrial fibre backbone networks are proving slower to bring the benefits of the cables.”

Though several operators own in-land fibre networks, Opeke opined that coverage is limited, even as there is too much duplication. She stated that telcos are unwilling to share infrastructure and in cases where they do agree to share infrastructure, they charge very high prices, often for strategic reasons.

“We brought of a big cable into the market and reduced the wholesale internet price points significantly. What we find is that the infrastructure on ground to distribute is limited and in areas where national backbone network, metro fibre networks exist, it is controlled in a proprietary nature unlike an open access infrastructure where anybody can connect at a uniformly low price.

“The prices for accepting such capacity are prohibitive and so it limits how close to the consumers we can get with the capacity we have brought into the region without building the networks ourselves”. She noted that $250 million had been invested so far in building the underwater cable and constructing distribution networks,” the Main One CEO revealed.

Telecommunication companies like MTN, Globacom, and Airtel are optimistic that Nigeria’s low internet penetration which stands at 28.6 percent, according to internetworldstats would before long change. This is even as telcos continue to invest huge financial resources in construction of fibre backbone and as competition intensifies in the submarine cable market.

These operators have so far deployed 22, 600 km of fibre transmission backbone, according to data derived from the Global System for Mobile Communications Association (GSMA), a global body representing the interest of mobile operators.

According to the GSMA, MTN and Globacom have deployed 8, 000 km and 10, 000 km of fibre backbone respectively. Airtel Nigeria formerly Zain has deployed 4, 600 km of fibre transmission backbone.




Poor spectrum management

Proper allocation of spectrum bands, according to the analyst would enable telecommunications companies roll out innovative mobile broadband services. Analysts say the Federal Government has remained passive to the incidence of poor spectrum management, even in the light of the importance of broadband to economic development. According to them, federal government’s inability to effectively manage its national spectrum resources is causing the nation significant economic losses in terms of lost revenue generation and foreign direct investment opportunities.

According to them, an increase in broadband penetration from 1 percent to 10 percent would invariably raise the country’s annual gross domestic product by 1.22 percent by 2015. The GSMA, a global body representing the interest of mobile operators has also predicted that Nigeria’s wireless broadband market will have a direct revenue impact of N598 billion in the next three years. “Nigeria’s low internet penetration can be attributed to poor spectrum management. We are aware that broadband is a driver of all sectors, it makes all the sectors to be more productive. From education, energy, health etc.

Spectrum is required for broadband services but these frequencies are not readily available.
“The 3.5GHz spectrum is very suitable for broadband but it’s under the control of the Nigerian Broadcast Corporation (NBC). Even spectrum within the purview of the Nigerian Communications Commission (NCC) is still not properly allocated. The cost of spectrum is still very high for local operators and that explains why foreign operators dominate the market. “There should be a deliberate policy to encourage local operators”, Lanre Ajayi, past president, Nigeria Internet Group, said in an interview. It was reported recently that the NCC may award four spectrum licences before the end of 2011.

Omobola Johnson, minister of communications technology, said in an interview recently, that the ministry would pay keen attention to spectrum management as well as accelerate the deployment of broadband infrastructure to increase penetration by 2015. “Spectrum is paramount for us in the ICT ministry. It is a limited national resource and as such we should manage it much more efficiently.

“There is a National Frequency Management Council (NFMC) within the ICT ministry. What we are doing in this regard is actually strengthening that council. We intend to make the council much stronger than it is today in terms of research into the different spectrum available and what they can be used for. “What we are looking at is the different spectrum bands that we have today and ensuring that we are making the best use of these spectrum bands. For instance, the Digital Dividend band, we will make sure that we allocate it to the right telecoms operators in no distant time. There is also the 2.5GHz right now.

“We will make sure that frequency spectrum is allocated to the right industry in order to ensure that we get the benefits of efficient broadband internet services. So, spectrum management is indeed an issue. “But it is an issue that we have recognised and it’s something that we are working towards ensuring that we manage our spectrum much better than we have managed it in the past,” Johnson posited.

Addressing internet access problem

Nigeria’s internet access problem characterised by slow and exasperating access to the cyberspace even with the growing number of underwater cable systems on the country’s coast line would soon become a thing of the past. Interestingly, the Federal Government has opened its doors to the global investment community through the adoption of an open access model strategically designed to strengthen investment in the area of deploying in-land fibre networks needed to move available bandwidth capacity around the length and breadth of the country.

Tony Ojobo, director, public affairs, Nigerian Communications Commission (NCC), disclosed that the adoption of the model is to basically preclude existing challenges posed by some operational drawbacks arising from functions of different government agencies, including urban and regional administrative setups which impinge on the right-of-way of facility deployments.

Analysts had earlier warned that Nigeria’s prospects of enjoying reasonably priced and efficient broadband services was been derailed by the indiscriminate and sometimes absurd levies charged by various agencies and state governments on right-of-way approvals for deployment of in-country fibre transmission links. Ojobo noted that significant capital investment was still required to distribute bandwidth capacity across the country. Nigeria boasts of four undersea fibre optic cables: SAT-3 managed exclusively by ailing Nigerian Telecommunications Limited (NITEL), privately owned cable, Main One cable, operator –run Glo-1 cable and WACS initiated by a consortium of firm including MTN.

“Yes, the submarine cables have landed but we still require huge levels of investment in infrastructure for majority of the Nigerian populace to enjoy the benefits of broadband internet services. I hope that when the infrastructure providers are licensed in an open access model, we will have more investment in that area. There is a sense of urgency in the commission to catch up with the rest of the world in the area of broadband internet”, Ojobo disclosed,

Echoing the sentiments of Ojobo, Kenneth Omeruo, a telecoms analyst stated that the main hurdle has been the high cost of infrastructure investment required to extend the international capacity into the hinterlands. According to Omeruo, “the price war in mobile calling rates disrupted the pricing structure and revenue expectations in telecoms market. This has resulted in a re-evaluation by each operator of their capital expenditure costs.” The outcome, according to the telecom analyst, is that no operator is willing to stump up the extensive outlays necessary to make data work efficiently.

On the other hand, several operators own in-land fibre networks but coverage is limited and there is too much duplication. Lending his view, Kazeem Oladepo, head of legal, Main One Cable Company opined that telcos are unwilling to share infrastructure and in cases where they do agree to share infrastructure, they charge very high prices, often for strategic reasons. Meanwhile, Ojobo revealed that a major appeal of the strategy is that the federal government will offer subsidies to enable broadband services to the under-served and un-served areas of the country where it may not be economically viable to deploy fibre.

According to the NCC director, “the strategy will also ensure that investors make decent profit, adding that the federal government is highly supportive of the commission’s drive to encourage capital investment in broadband infrastructure deployment. The commission is in the process of accessing what’s on ground in terms of infrastructure and demand to determine the final framework. We will soon spell out in detail what we will do in this regard.”

Eugene Juwah, NCC’s CEO had earlier disclosed that the implementation of this model would bridge the gaps in broadband deployment, eliminate last mile issues, reduce the price of bandwidth for end users and unlock the market for massive broadband usage in the country. During the implementation, the commission will issue licenses in the passive and active layers respectively while price caps will be implemented in these layers using cost based pricing.
Recasting government’s objectives as recently indicated by the Communications Technology Omobola Johnson, the NCC has indicated that Nigeria’s expectations by 2015 is to achieve 12percent broadband penetration, 80 percent mobile penetration, 2 percent fixed line growth, 34 percent internet growth and 12 percent PC penetration. Commenting on the issue of poor quality of service prevalent in Nigeria’s highly competitive telecoms industry, Ojobo noted that after the 30-day deadline, the NCC would conduct another independent monitoring to ascertain if there is significant service improvements based on four key performance indicators (KPIs) as indicated by the commission.

For Emmanuel Ekuwem, Immediate Past President, Association of Telecoms Companies of Nigeria (ATCON), the nation will achieve speedy development in 2012 if the country embrace broadband internet to its fullest. According to him, broadband internet access would enhance efforts at job creation, wealth creation and poverty alleviation. “ICT will accelerate our meeting of the United Nations Millennium Development Goals (MDGs). It will engender an overall national economic growth and development. We will all gladly experience an ICT-based increase in our GDP.

“Who will not be happy to see a creative explosion of a feeling of national rebirth and well-being among the citizens of Nigeria? All these good things can only be possible when we have a ubiquitous availability of broadband services in Nigeria,” Ekuwem disclosed. It would be recalled that NCC had threatened to stop the three major mobile operators, MTN, Glo and Airtel from further sale of SIM cards from December, this year, if they fail to meet the target set by the Commission to improve on quality of service.

MTN targets data market, Multilinks backbone network

Ben Uzor Jr

Fresh information has emerged that Nigeria’s dominant telecommunications operator, MTN is bidding for beleaguered CDMA operator, Multilinks’ backbone transmission network. Analyst told Business Day yesterday that MTN was keen on maintaining market leadership in the data segment of the country’s highly competitive telecoms market. As at March this year, official subscriber statistics from the Nigerian Communications Commission (NCC) showed that MTN had 40.2 million subscribers, while Globacom had 19.9 million; Airtel had 16.1 million and Etisalat had 7.2 million, in the voice segment.

A senior executive at MTN told Business Day that the company ‘was unable to comment at this time’. Industry players are all agreed however, that market focus is shifting from voice to internet and data services, which are of high value for business, education, social and entertainment purposes. Industry watchers also maintain that MTN’s purported bid for Multilink’s fibre transmission backbone is particularly an ardent struggle for the data and internet services market, as well as for the bulk (carriers-carrier) market. Business Day had earlier reported that Helios Towers Nigeria plans to sell the mobile phone business it legitimately inherited as part of an acquisition of Multilinks.

Helios Nigeria which builds, buys and rents towers used by telecoms operators acquired Multilinks assets from Telkom after the South African mobile operator attempted to offload its shareholdings in the loss-making venture to a third party earlier. Informed sources however told Business Day yesterday that Stanbic Bank was managing the process of the sale. According to our source, Multilink’s ‘crown jewel’ is its robust terrestrial fibre optic network connecting 21 of Nigeria’s 36 states, including the Federal Capital Territory, Abuja with an estimated construction cost of over $150 million.

On the other hand, MTN owns the largest transmission network in Nigeria and there are concerns amongst stakeholders that the acquisition of Multilinks backbone, will mean that the company will own substantially more than 50 percent of long distance transmission networks in Nigeria. Industry watchers say the limited availability and exorbitant price of long distance national transmission capacity needed to move available bandwidth capacity emanating from the underwater cables on the country’s coastline is the fundamental drawback to access to efficient and reasonably priced broadband internet services.

It has been discovered that the price of moving internet capacity from Lagos to Abuja is much higher than the cost of moving capacity from Lagos to London, due to the dearth of transmission backbone network. According to analysts, the development of the broadband market in Nigeria and the availability of internet access to as wide a population as possible, at a lower cost was largely dependent on the reduction of transmission costs. There is concern among telecoms officials about a concentration of market power and the negative impact this might have on competition and pricing.

Vodacom re-enters telecoms market, vows to reduce internet transmission costs

Ben Uzor Jr & Loveth Anazodo-Udeh

Following the successful acquisition of the carrier services and business network solutions subsidiaries of Gateway Telecommunications SA for $700 million, Vodacom Group, yesterday declared its re-entry into Nigeria’s highly competitive telecommunications market. The firm has also promised to significantly reduce the cost of moving bandwidth capacity emanating from the underwater cables specifically for corporates by virtue of its robust national terrestrial network covering 26 states in the country. Vodacom said it had discovered that the price of moving internet capacity from Lagos to Abuja is much higher than the cost of moving capacity from Lagos to London due to poor transmission backbone.

Speaking at a press briefing held in Lagos yesterday, Guy Clark, managing director, Vodacom Business Nigeria disclosed that the telecoms company was not operating as a GSM player but has aligned its infrastructure deployment strategy with that of the Nigerian Communications Commission (NCC) and the new ministry of communications technology’s broadband strategy. The strategy, according to Vodacom, under an open access model will strengthen investment in the area of deploying in-land distribution fibre networks needed to move available bandwidth capacity around the length and breadth of the country. “In 2009, we acquired a company called Gateway Business which was called GS telecom.

“We have spent the last 18 months investing in people, infrastructure and our partners. We have deployed MPLS (Multi Protocol Label Switching) network in Nigeria today which covers 26 states. By the end of our financial year, we will be in all 36 states of the federation. We are not in Nigeria as a GSM company but we anticipated the coming of the submarine cables. The ministry of communications technology and the NCC are earnestly looking for how to take the available bandwidth on the country’s shores to the consumer. We have invested significantly in our MPLS network across Nigeria. We have aligned our infrastructure with the broadband strategy of NCC and the ministry of ICT”, he stated.

Industry analysts told Business Day yesterday that the Vodacom Group still rues its decision to pull out of Nigeria which the company blamed on ‘inappropriate level of risk in the environment’ and other issues bordering on ‘corporate governance and trust’. According to them, Vodacom may be looking to play a fundamental role in NCC’s broadband strategy. However, Clark did not indicate Vodacom’s intention to acquire any licence under a new regime aimed at improving Nigeria’s internet penetration. Commenting on the re-brand, Clark said: “The introduction of Vodacom Business to the Nigerian market is far more than just a new name, logo and colour. We have shifted the way we do things in Nigeria.

“We have made significant investment in our staff together with facilities upgrades and the deployment of our national terrestrial MPLS network. This network roll-out is further supported by our carrier grade Broadband Wireless Access Network allowing Vodacom Business to deliver services end-to-end.” In the same vein, Louisa Van Beek, chief executive officer, Vodacom Business Africa noted, “The rebrand is expected to accelerate Vodacom Business’ operations with customers in the banking and finance, insurance, education and hospitality industries –key markets earmarked for expansion. Its widespread terrestrial MPLS network that spans over 40 African countries is key to delivering upon this objective.

“As new fibre cables arrive into Nigeria, communications models and Enterprise service availability is changing at a rapid pace. We are taking the lead to provide our customers with a diversified portfolio of services that they tailor for their respective businesses. It is an exciting prospect to have the privilege of a new brand at our disposal to arm our efforts going forward and we look forward to watching the growth and development of our business into the future”, she concluded.

FG targets new stream of telecom investment seen in broadband

Ben Uzor Jr

Nigeria’s internet access problem characterised by slow and exasperating access to the cyberspace even with the growing number of underwater cable systems on the country’s coast line, would soon become a thing of the past. The federal government has opened its doors to the global investment community through the adoption of an open access model, strategically designed to strengthen investment in the area of deploying in-land fibre networks needed to move available bandwidth capacity around the length and breadth of the country. Tony Ojobo, director, public affairs, Nigerian Communications Commission (NCC), made this known during a courtesy visit to BusinessDay’s head office in Lagos.

The adoption of the model, according to him, is to basically preclude existing challenges posed by some operational drawbacks arising from functions of different government agencies, including urban and regional administrative setups which impinge on the right-of-way of facility deployments. Analysts had earlier warned that Nigeria’s prospects of enjoying reasonably priced and efficient broadband services was been derailed by the indiscriminate and sometimes absurd levies charged by various agencies and state governments on right-of-way approvals for deployment of in-country fibre transmission links. He said significant capital investment was still required to distribute bandwidth capacity across the country.

Nigeria boasts of four undersea fibre optic cables: SAT-3 managed exclusively by ailing Nigerian Telecommunications Limited (NITEL), privately owned cable Main One cable, operator –run Glo-1 cable and WACS initiated by a consortium of firm including MTN. “Yes, the submarine cables have landed but we still require huge levels of investment in infrastructure for majority of the Nigerian populace to enjoy the benefits of broadband internet services. I hope that when the infrastructure providers are licensed in an open access model, we will have more investment in that area. There is a sense of urgency in the commission to catch up with the rest of the world in the area of broadband internet”, Ojobo said.

Kenneth Omeruo, a telecoms analyst agrees with Ojobo, saying the main hurdle has been the high cost of infrastructure investment required to extend the international capacity into the hinterland. According to him, “the price war in mobile calling rates disrupted the pricing structure and revenue expectations in the telecoms market. This, he further explained has resulted “in a re-evaluation by each operator ,of their capital expenditure costs.” The outcome, according to him, is that no operator is willing to stump up the extensive outlays necessary to make data work efficiently. On the other hand, several operators own in-land fibre networks but coverage is limited and there is too much duplication.

Kazeem Oladepo, head of legal, Main One Cable Company said telcos are unwilling to share infrastructure and in cases where they do agree to share, they charge very high prices, often for strategic reasons. Ojobo said a major appeal of the strategy is that the federal government will offer subsidies to enable broadband services to the under-served and un-served areas of the country where it may not be economically viable to deploy fibre. According to the NCC director, the strategy will also ensure that investors make decent profit, adding that the federal government is highly supportive of the commission’s drive to encourage capital investment in broadband infrastructure deployment.

Why Nokia, Samsung, LG can’t manufacture handsets in Nigeria

• Unfavourable business environment
Ben Uzor Jr


Nigeria’s poor business environment, manifest by absence of proper intellectual property (IP) protection controls and dearth of public infrastructure, remains the critical drawback discouraging foreign investments in the area of establishing mobile phone factories in the country, global handset makers have said. If Nigeria does not swiftly address these impediments to enterprise growth and development, phone makers such as Samsung, LG and Nokia have warned, investments in mobile phone factories will remain an illusion, inspite of the country’s enormous mobile device market.

This is coming on the heels of a recent proclamation by the minister of Communication Technology, Omobola Johnson, at a presidential retreat with the private sector recently, that Nigeria’s competitive telecommunications landscape and its attendant potentials were enough incentive for global phone manufacturers and SIM (Subscriber Information Module) card manufacturers, to set up factories in the country. Prospective financiers and investors, according the phone makers, are more often than not, apprehensive that their investments could be negated by these barriers.

The delicate process of making phones, especially smart phones, they say, requires a high degree of technological advancement, which Nigeria currently lacks. “Assembling of phones is a delicate industry and smart phone manufacturing is even more delicate. “In my opinion, countries that lack requisite labour laws, IP protection controls, basic infrastructure such electricity, and have a high operational costs, are least considered when decisions are being made, with regard to investments in local factories”, Fady Khatib, regional director, hand held phones; Samsung West Africa, told Business Day in an interview.

Lanre Ajayi, past president, Nigerian Internet Group (NIG) agrees with Khatib that poor business environment remains a fundamental challenge hindering investment, not just in the telecoms markets but in other sectors of the economy. “In countries like China, Thailand, governments of these countries build industrial and technology parks with requisite infrastructure such as power, broadband internet etc. All an investor needs to do, is come with a good idea and technology and start business. They have a one stop shop, where issues relating to land use, registering the business are all addressed.

“If an investor sees a country with this type of business environment, do you think that investor will want to come to Nigeria? Our government must strive to create a conducive business environment that would be attractive to investors. I support the minister’s call for these phone firms to invest in factories in Nigeria, going by the enormous profits they make here. They should be able to plough back some of their profits into the country. This market is huge and if they set up plants here, chances are that they will make more revenue. The government is working tirelessly to address these challenges.

“Our government needs to find ways of making the country attractive to foreign investors, such as granting tax rebates and so on”, Ajayi said in an interview with Business Day. Osagie Ogunbor, communications manager for Nokia West Africa told Business Day yesterday that such decisions (establishment of phone factories) are taken as a matter of business expediency. “I believe that phone makers can still grow the Nigerian economy without establishing a phone factory here. We are employing many Nigerians directly and indirectly. We have a platform that encourages indigenous applications developers.”

MTN opens up network to indigenous applications developers

Ben Uzor Jr

Indigenous developers of applications that run on smart phones will before long have an opportunity to tap into the multi-billion dollar applications development market. Mobile network operator, MTN has opened up its network platform to support locally developed applications. Bola Akingbade, chief marketing officer, MTN Nigeria, told Business Day at a forum on mobile application development that MTN was keen on becoming a frontline player in the application development space, adding that fast-growing portfolios of mobile apps would be fuelled essentially by an efficient developer ecosystem.

Also called mobile apps, it is a term used to describe Internet applications that run on smartphones and other mobile devices. Mobile applications usually help users by connecting them to Internet services more commonly accessed on desktop or notebook computers, or by making it easier to use the Internet on their portable devices. A mobile app may be a mobile web site book-marking utility, a mobile-based instant messaging client, G mail for mobile and many other applications. According to Akingbade, MTN would facilitate access to over 50 million mobile phone users in the country.

This, according to him would enable developers monetize their ideas. The telecoms company assured that with only 10 million subscribers spending incremental N50 per month on a developer’s app, every mobile application developer can become a billionaire in one year. The CMO further explained MTN’s focus would be to build a committed and vibrant community of local developers by providing a platform for ideas generation and more importantly assisting local developers monetize their skills. “Applications have emerged as a fundamental driver of enabling lifestyle and productivity as consumers want to access relevant content from PCs, laptops, mobile phones and even in-car systems.

“The increasing popularity of mobile applications (mobile apps) has driven a need for telecoms operators to start focusing on reducing the barriers to adoption.” Also, the firm has introduced ‘The MTN Ideas Forum’, a Networking and idea generation forum that enables MTN connect with the local applications developers community as well as other stakeholders in the value chain (Google, Nokia, Samsung, e.tc). Akingbade stressed that partnership was critical in the emerging ecosystem. This, he further added was because within the Telemedia value chain, no single entity can run alone.

Giving vivid insight into the some of the value proposition developer should expect from MTN, “We would give handsome monetary and non monetary reward to winners of the MTN Apps competition. We would certify qualified developers as MTN App developers and provide developers toolkits”, he further added. MTN disclosed that it is currently setting up an App store, and will provide visibility for local developers within the online distribution platform with access to 21 MTN markets. Research has indicated that there is a yearning for relevant local and international mobile applications.

According to industry watchers, apps create an exciting and elevating feeling of unconstrained sense of belongingness and being in touch with the world. Mobile handsets, according to them are getting smarter and more accessible because of increasing availability of ultra low cost smartphones with improved user interface. They also argue that data usage is growing tremendously thus bringing more Nigerians online via the mobile screen. However, there is very limited local mobile content in the country which according to industry analysts presents a massive opportunity.

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CBN, PTSP remove infrastructure bottleneck hindering cashless project

Ben Uzor Jr

Newly licensed Payment Terminal Service Providers (PTSPs) and the Central Bank of Nigeria (CBN) are working assiduously to mitigate the infrastructure bottlenecks that threaten the smooth take-off of government’s proposed ‘Cashless Nigeria Project’. This is even as the CBN steps us engagements sessions with stakeholders to create buy-in and ensure maximum public awareness. Firstly, PTSPs have disclosed plans to deploy 150, 000 Point of Sale (PoS) terminal in Nigeria by the end of 2012. This, they say would enable Nigerians conduct cashless transactions in the country and around the world.

In a clear indication of the CBN’s optimism about the prospects and advantages of moving the economy into cashless mode, the apex bank licensed six PTSPs with the singular mandate to deploy and manage PoS terminals in Nigeria. The six successful firms are ITEX, Paymaster, Etop, Citiserve, ValuCard and EasyFuel. CBN licensed only these firms, to enable the PTSPs build scale and maximise efficiency. These six firms, according to industry watchers are tested and trusted e-payment firms that provide e-business infrastructure with the objective of establishing and running a secure, reliable and scalable network.

Having shown strong pedigree in the e-business sector especially in the area of deploying and maintaining independent multiplication and functional PoS terminals network which accepts cards from all payment schemes in Nigeria, PTSPs have said that they are working closely with the financial regulator to ensure infrastructure challenges bordering on power, connectivity, and security are properly addressed. Ernest Nduje of ITEX, a PTSP confirmed that 150, 000 PoS terminal would be deployed by 2012, adding that 53, 000 PoS terminals would be deployed by the end of December 2011.

“The CBN’s cashless initiative is very commendable. Some of us have been in this business for over six years without the backing of the CBN. The fact that the CBN has come forward to back us is indeed positive. The cost of managing cash is expensive. Infact, direct cost of cash is estimated to reach N192 billion in 2012. In terms of connectivity issues, the networks need to be committed to this initiative. This is a national project and we expect them to come on board, give us their full commitment to ensure that this initiative is a success. We want them to guarantee 100 percent availability on the network.

“We have ordered terminals that have dual SIM card to ensure high availability. We have also tested the platform to ensure that it can handle the huge traffic expected. The cooperation from the banks is positive. In terms of negotiations and pricing, they have been very cooperative. The ‘Cashless Nigeria Project’ will open up a huge industry that will bring a lot of benefits to the nation. It will create employment opportunities for young Nigerians. We have already started hiring engineers, setting up support teams to handle the deployment and maintenance of these devices.

“We expect the government to create the enabling environment for this initiative to fly. We expect the government to provide tax holidays for PoS importation. In terms of timelines, by 15th of October 2011, the first batch of PoS will go live from NIBSS. We expect that 53, 000 PoS terminals will be deployed by the end of December 2011”, Nduje told BusinessDay. The Bankers Committee had earlier disclosed plans to deploy 40, 000 PoS by the end of December. At one of the engagement session in Lagos at the weekend, Tunde Lemo, deputy governor, operation, CBN said that the apex bank was closely with the Nigerian Communications Commission (NCC) to ensure that connectivity issues are addressed.

“For example, dedicated connectivity will be provided by MTN and Globacom for all point of sale traffic going forward. This should greatly increase the terminal uptime. Also, most terminals will be dual-SIM or roaming SIM, which will ensure fail over options and guarantee a higher uptime. Power issues are also being addressed with relevant stakeholders. For example, in recent manufacturer selection form, PoS terminals specifications were defined to take into account Nigeria's current power challenges. All PoS terminals will have a minimum battery life span of 24hours, while many will do 48 hours with no charge.

“They also come with backup batteries and car chargers as appropriate to address the power challenge”, Lemo added. Alluding to consumer reservations around card security, Lemo noted that the challenge has been addressed with the introduction of chip and pin cards. He said Chip and PIN card are more secure than the previous magnetic strip cards that were in use last year. “CBN is also working with the banks and NIBSS to put in place a comprehensive fraud monitoring tool, which will enable the industry to identify trends and be proactive in mitigating electronic fraud”, he concluded.

Highlighting the various drawbacks of a cash-based economy, Tayo Olajide, managing director, EasyFuel, one of the licensed PTSP firms noted that the huge cost of cash management, security risk, among others, make the proposed cashless economy an ideal one. He added that the CBN through the PTSP license has shown its intent to transform payment system in the country. The apex bank also recently reversed its directive on off-site ATMs and mandated banks to deploy 75,000 ATMs before 2015. This, according to industry analysts is an attempt to encourage the adoption of electronic channels.

Plan for cashless economy troubled

Ben Uzor Jr

Government’s desire to move the nation into a cashless mode is being threatened by the absence of requisite infrastructure for the efficient deployment and adoption of electronic payment and commerce in Nigeria, analysts have said. Industry analysts told Business Day that Nigeria’s low point of sale terminal (PoS) density and poor last mile connectivity constitute significant drawbacks to the success of the Central Bank of Nigeria’s (CBN) ‘Cashless Nigeria’ project which is scheduled to go live by June 2012. Besides, Business Day investigations reveal that there are only about 3,000 functioning PoS terminals in the country out of the existing 13,000.

Spain, for instance has 1.6 million active PoS terminals with a population of 14 million people, while India which has deployed about 500, 000 PoS terminals, conducts 360 million transactions per annum. With electronic commerce increasingly driving economic growth in developing economies, government’s priority should be the infrastructure that citizens need to make online payments, analysts have argued. The financial regulator and banks are upbeat about the prospects and benefits of moving the economy into cashless mode. Only recently, the CBN licensed five independent Payment Terminal Service (PTS) providers with the singular mandate to deploy and manage PoS terminals in Nigeria.

The five successful companies are Paymaster, Etop, Citiserve, ValuCard and ITEX. CBN licensed only these companies, to enable the PTSPs build scale and maximise efficiency. Industry analysts say that the five firms are tested and trusted e-payment companies that provide e-business infrastructure with the objective of establishing and running a secure, reliable and scalable network. Some of the licensed firms, analyst say, have shown strong pedigree in the e-business sector in the deployment and maintenance of independent multiplication and functional Point-of-Service terminals network, which accepts cards from all payment schemes in Nigeria, by connecting directly to relevant electronic transaction switching and processing companies.

In addition, the apex bank also recently reversed its directive on off-site ATMs and mandated banks to deploy 75,000 ATMs before 2015. This, according to analysts is an attempt to encourage the adoption of electronic channels. “The CBN’s cashless economy drive cannot be ready now. It is very easy for the CBN to make an announcement, but it really depends on the political will to make this a reality. At the moment, we are not ready for this transition, infrastructure-wise. Government needs to take pro-active measures and actions to ensure that the requisite infrastructure needed for the ‘Cashless Nigeria project to thrive is on-ground. As you know, there is this haphazard motion of government in taking decisions that border on the socio-economic development of the country.

“I hope the new minster is taking stock of these issues and I hope her voice will be heard”, Emmanuel Amos, managing director/ chief executive officer of Programmos, an indigenous software company told Business in an interview at the weekend. Usen Udoh, senior director, high technology, Accenture told Business Day in an interview that the dearth of infrastructure is hindering the growth of e-commerce in the country. “For instance, we do not have the last mile connection to take advantage of the internet to grow e-commerce and e-payments in Nigeria . “Yes, we have the submarine cables (MainOne, Glo-1 and SAT-3 cables) providing huge bandwidth capacity but the last connection is still a very pertinent issue in the country. Telecommunications companies like MTN, Globacom, and Multilinks are investing in last mile connection but they are doing it at a very slow pace and they are not sharing.”

Lanre Ajayi, past president, Nigerian Internet Group (NIG) said “Infrastructure- wise, we are not there yet but it is a work in progress. The objective of CBN’s cashless Nigeria project is to promote the use of electronic channels as opposed to cash. This project is feasible in my opinion. I do not think infrastructure is the most important problem. I think awareness is something the government needs to address, to drive the adoption of electronic channels. Take for instance; PoS terminals use GPRS for transactions to take place. Almost all parts of the country are covered by GPRS. Yes, we still have a very low PoS density but it something that is surmountable, considering the resolve of financial institutions to deploy 40, 000 PoS terminals in Lagos by December.”

“The vision of the CBN over the next two to three years is that Nigeria has 500, 000 PoS terminals. Are banks ready for the move? Yes, they are. Do banks have the expertise to deploy PoS terminals? That is subjective. Another challenge is the prohibitive cost of deploying PoS. It is very expensive because people buy, based on silos. “The industry is looking at it from a shared service perspective, which would ensure that the cost goes down”, Luqman Balogun, divisional head, e-Banking, UBA told BusinessDay. Juliet Anammah, director, real sector, Accenture Nigeria, confirmed that 3, 000 PoS were operational, adding that connectivity issues resulting in frequent downtime in communications, merchant apathy, and lack of awareness, were some of the factors responsible for Nigeria’s low PoS density.

She said that the CBN was working with telecoms firms to ensure 95 percent bandwidth availability to boost user confidence in the systems. “As you know, the PoS transaction doesn’t actually carry much capacity. Maximum is 4 kilobytes, so it is just a question of ensuring that there is bandwidth for that and CBN has said that they are working with telecoms providers to ensure 95 per cent availability and to develop that further, until they have 100 per cent availability”, Anammah posited. Balogun believes that another challenge is the prohibitive cost of deploying PoS. “It is very expensive because people buy based on silos. The industry is looking at it from a shared service perspective, which would ensure that the cost goes down. “We are partnering with the telcos to ensure connectivity is addressed.

As an industry, we are working to improve customer education and awareness. From a CBN perspective, we are looking at making the cost of processing ATM more than using the PoS. When you combine all these factors together, what we would see is an aggressive growth of PoS usage.”

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FG gets heavy knocks over spectrum management

•As N600bn Broadband income is slowed

Ben Uzor Jr

The Federal Government’s inability to effectively manage its national spectrum resources is causing the nation significant economic losses in terms of lost revenue generation and foreign direct investment opportunities, analysts have said. Proper allocation of spectrum bands, according to the analyst would enable telecommunications companies roll out innovative mobile broadband services. Analysts say the Federal Government has remained passive to the incidence of poor spectrum management, even in the light of the importance of broadband to economic development.

According to them, an increase in broadband penetration from 1 percent to 10 percent would invariably raise the country’s annual gross domestic product by 1.22 percent by 2015. “I will score them low here. Nigeria’s low internet penetration can be attributed to poor spectrum management. We are aware that broadband is a driver of all sectors, it makes all the sectors to be more productive. From education, energy, health etc. Spectrum is required for broadband services but these frequencies are not readily available. The 3.5GHz spectrum is very suitable for broadband but it’s under the control of the Nigerian Broadcast Corporation (NBC).

“Even spectrum within the purview of the Nigerian Communications Commission (NCC) is still not properly allocated. The cost of spectrum is still very high for local operators and that explains why foreign operators dominate the market. “There should be a deliberate policy to encourage local operators”, Lanre Ajayi, past president, Nigeria Internet Group, said in an interview. It was reported recently that the NCC may award four spectrum licences before the end of 2011. The report further disclosed that four telecoms companies will be licensed on the 2.5GHz spectrum by 2011, while two telecoms operators would be licensed on the 700MHz spectrum in two years.

Much is yet to be seen from the telecoms regulator. The GSMA, a global body representing the interest of mobile operators has also predicted that Nigeria’s wireless broadband market will have a direct revenue impact of N598 billion in the next three years. A source at the NCC, who asked not to be mentioned because he was not authorised to comment, said the NCC was working assiduously to develop a comprehensive policy that would ensure that spectrum resource is optimally utilised for the overall benefit of the nation. He however did not comment on when the commission would commence issuance of spectrum licenses. Over the last decade, investment in telecoms has exceeded $18 billion, out of which about $12 billion is from FDI, while the balance is from local investors.

There are suggestions that the government realised well over N300 million from the sale of spectrum. Industry analysts argued that the telecoms sector is missing out on such economic gains. The telecoms markets’ capacity to attract investment, according to the analysts would depend largely on a positive regulatory ambiance created by the government, as it relates to spectrum management and infrastructure development. Recently, Barack Obama, president of the United States of America (USA) ordered that an additional 500 MHz of radio spectrum be made available for licensing over the next 10 years. Obama said wireless broadband connectivity was important to America’s economic prosperity.

Analyst have urged Jonathan to take a queue from Obama, noting that there was need to meet the demand for spectrum as a result of the fast growth of data services on mobile networks.“The 2.3 GHz award process has been mired in controversy for over a year. More than two years have passed since 2.5 GHz was proposed to be offered by the NCC, and negotiations over its use are yet to be concluded. There is a lack of clarity over when the vital Digital Dividend spectrum will be passed to the NCC for use by operators, which could dramatically increase mobile broadband coverage”, Ross Bateson, spokesperson for GSMA said. He said the NCC should ensure that spectrum is made available quickly and with maximum transparency, using international harmonised band plans.

“Nigeria started by selling spectrum at very high prices. It will seem that the NCC had brought in better revenue for the government. “The telecoms consumer will pay for this at the end of the day. There are some people who believe that the 2.3GHz award process was not transparent. In most cases, spectrum falls into the wrong hands who are not really ready to roll out broadband services. Due to the fact that they are connected in government, they buy this spectrum to re-sell to make profit”, an analysts who pleaded anonymity said. Telecoms operators had earlier expressed concern that rural communities will be denied access to efficient and affordable broadband services due to federal governments’ inability to efficiently manage our national frequency spectrum resources. Adewale Jones, vice president, Association of Telecommunications Companies of Nigeria (ATCON), said: “I will not score them high.

I think the major challenge we have today is that quite a number of people involved in spectrum management do not understand the technicalities involved. Quite a number of people responsible for managing this national resource do not have the requisite knowledge to deal with the complexities inherent in spectrum allocation and re-farming. If you think about Nigeria’s desire to connect 50 million people to the internet by 2015, then there is need for effective spectrum management to make this happen. This is because wireless broadband requires spectrum.

“Effective spectrum management will facilitate the use of spectrum in the interest of the nation and also ensure that adequate spectrum is provided to all users, public and private, long and small, in both the short and long term. If demand exceeds availability; therefore, sharing it is not only necessary, efficient management is highly required”, Shola Taylor, chief executive officer, Kemilinks International said.

Phone makers battle for Nigeria’s N245 billion broadband device market

•Nokia re-positions to assume market leadership in smartphone segment
Ben Uzor Jr

Nigeria’s burgeoning broadband device market, valued at N245 billion by GSMA (a global body representing the interest of mobile operators) will witness stiff competition in coming months, as major phone makers jostle to expand the scope of the market by wrestling more users from computer makers, analysts say. According to the analysts, Laptops and PCs remain the primary devices for connecting to the internet but recent surveys have shown that more Nigerians will likely hook up to the internet via cheap smartphones. This, according to analysts, explains why major phone makers like Nokia, Research in Motion (RIM), and Samsung are in a race to bring in cheaper smartphone models into the market.

This battle for market leadership in the smartphone segment, according to analysts, is taking also the form of establishment of new local offices, aggressive advertising and marketing campaigns. Though, Nokia remains the number one firm in the global phone market with sales for the second quarter of 2011 reaching 88.5 million, its Symbian smartphone sales dropped significantly from 38.1 percent to 15.2 percent between Q2 2010 and Q2 2011. Samsung sales however increased significantly from 5.0 percent to 17.5 percent. To salvage the situation, world mobility leader, Nokia recently unveiled three mass-market smartphone models which will use a new version of its Symbian software.

In swift response, Samsung recently unveiled four new smartphone models under its Galaxy line, expanding its flagship product line to cheaper phones to tap growth in emerging markets such as Nigeria. Besides, rumours have also circulated for some time that Apple Incorporated will try to expand its iPhone offering to take in low-end buyers, as it did when it expanded into the cheaper end of the digital music player market with its iPod mini in 2004. Kenneth Omeruo, a telecoms analyst told BusinessDay that: “Smartphone manufacturers will continue to move down the value chain, to target the low-end segment and attract mass customers, especially those in Nigeria, India and China.”

Only recently, RIM launched five new BlackBerry smartphones running on the new BlackBerry 7 (BB7) software which offers mobile users a variety of designs to choose from and delivers the ultimate in communications, multimedia and productivity. Mary McDowell, vice president, mobile phones, Nokia Corporation, confirmed the launch of Nokia’s new devices to Business Day in an interview in Nairobi, adding that the Finnish firm still makes more phones than any other phone maker. According to her, strong distribution with brand value will provide ample time for Nokia to put its house in order. She said Nokia still has very strong presence in basic phone market especially in emerging markets like Nigeria.

“In the near term, we have got new releases of three Symbian devices with significantly enhanced user interface. This year, we will also be releasing the N9. Later, we will be bringing windows phone here. Windows phone will be shipped into some markets this year but not in Nigeria. “Research and development for the new devices are going on well. Our collaboration with Microsoft seems quite strong. People are flying back and forth between Seattle and Finland quite a bit. In addition to the device collaboration, there is also tremendous work going-on on the maps and location. The Nokia VP strongly believes that these efforts will assist the phone maker regain market leadership in the global smartphone market. On the other hand, RIM has seen a calamitous fall in sales – with the Canadian firm turning its focus to the emerging markets like Nigeria to increase revenue.

Business Day learnt that BlackBerry maker, RIM will establish a local office in Nigeria in the coming months, hopefully by December. Waldi Wepener, regional director, RIM also confirmed this in an interview with Business Day. He said that RIM will embark on a variety of activities in the area of marketing to accelerate growth in the market. “Smartphone penetration is growing here in Nigeria. For us, we are entering Nigeria at the right time and we strongly believe that with our strong product offering we can garner more market share in Nigeria’s smartphone market.

“As a business, we are aware that there is a need to tailor our offerings to meet local needs and market requirement. It is particularly important to gain local market knowledge by employing local Nigerian resources”, Wepener added. The growth of Nigeria’s broadband device market, according to industry analysts, is sustained by rising mobile phone penetration due to the deregulation of the telecommunications industry in 2011 as well as mobile network operator’s drive to generate more revenue from mobile broadband and data services owning to dwindling voice revenues.

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Samsung Galaxy S II: Apple’s worst nightmare

Apple is embarking on huge legal battles in the United States (US) and Australia to get injunctions against Samsung products. So what is it about the Galaxy S II smartphone that has Apple scampering like a ‘scardy cat?’ Tech enthusiasts say the Galaxy S II is Apple’s worst nightmare…a super-hero smartphone whose, power (like DROGBA!), Slimness, extraordinary Super AMOLED screen and android OS may cast a dark cloud on the coming iPhone 5. Without doubt, Apple has made it clear when seeking injunctions that it believes the Galaxy II S infringes on various Apple patents - a claim denied by Samsung.

But whether it infringes patents or not - the simple fact is that the Galaxy II S is the first smartphone to worry Apple. And no wonder, the Galaxy S II’s spec sheet reads largely like a power’s user dream phone. Besides, the 1.2GHz dual-core Exynos processor makes it the most powerful smartphone in existence and it benchmarks accordingly, coming first in the Quadrant benchmark with a score of 3,131. This is 421 points better than the second-fastest smartphone, the Motorola Atrix, and over 2,000 points better than the original Galaxy S. I can attest to its speeds because I use the Galaxy S II.

Do I smell envy in the air? Don’t hate the player, hate the game! Unfortunately, there’s no global benchmark that works across all smartphone platforms, so you’ll have to take my word for it when I say that the Galaxy S II really is the fastest phone I’ve ever used. All you have to do is get a Galaxy S II and subscribe to a data bundle from Airtel and open web pages at amazing speeds. Back to my discussion, the 4.3in Super AMOLED Pro display is so vibrant it looks painted on, to the point that you will need to reassure friends that it’s a full working model rather than a display phone. That’s the gospel truth peeps!

This ‘phony phone’ inkling isn’t helped by the Galaxy S II’s waif-like dimensions; it weighs next to nothing at 116g, and its 8.49mm thickness makes even the iPhone 4 look chunky by comparison. Its tiny girth makes the lack of HDMI output understandable, but I’d have happily sacrificed a few micrometers to gain this functionality. The device runs the latest version of Android (Gingerbread) with Samsung’s custom TouchWIZ 4.0 skin on top. Even those that prefer ‘Vanilla’ Android should be impressed with the additional widgets and apps, custom homescreen editor and all the extra settings and functions. Samsung has taken the standard Android experience and made it faster, and significantly more capable.

There are many other features that make the Galaxy S II my top pick of all current smartphones, including the 16GB of internal storage can be added to with a microSD card, the eight-megapixel camera can record Full HD 1080p video, and the 1650mAh battery lasts for a full day-and-a-half of heavy usage.

Hardware
The Samsung Galaxy S II is 8.49mm (0.33 inches) thick. We whipped out a ruler and checked. It's true. Admittedly, that measurement expands a little at the handset's bottom, where a curvy bump houses its loudspeaker, and around the camera compartment, which protrudes ever so slightly from the rest of the body, but even at its thickest point, this phone doesn't allow itself to go beyond the 1cm mark. Given the veritable spec sheet overload that Samsung has included within the Galaxy S II, we consider its thin profile a stunning feat of engineering.

Battery life
The story of the Galaxy S II's battery life cannot be told without returning to its luscious screen. Being an OLED panel, the 4.3-inch display here doesn't use one single backlight as LCD screens do, and instead only illuminates the pixels that are needed to actively display content. This is the reason why it can generate truer blacks than any backlit panel, but it also permits the user to optimize battery life by doing such things as switching to darker wallpaper or reading eBooks against a black background.

Camera
Samsung eschews the default Gingerbread camera app for its own effort, which comes with a neat slice of customization. The left menu column gives you three shortcut slots for the functions you consider most relevant to your photographic exploits. By default, two of them are populated with a button to flip between the rear-facing 8 megapixel and front-facing 2 megapixel camera and another one for controlling the flash, but you can do whatever you fancy.

Fresh mergers & acquisition deals imminent in small telcos

•Starcomms, Visafone in secret talks
Ben Uzor Jr

The Code Division Multiple Access (CDMA) segment of Nigeria’s highly competitive telecommunications market will likely witness another merger and acquisition (M&A) deal in the next twelve months, chief executive officer of Starcomms Plc, Logan Pather, disclosed yesterday.

Although, the newly appointed CEO was evasive as to who will acquire who, industry sources told Business Day yesterday that Visafone and Starcomms are in secret talks to further consolidate the CDMA segment by way of mergers and acquisition, in order to achieve scale and muster better buying power. This, according industry sources will enable them compete favorably with their GSM counterparts.

These, indeed, are not the best of times for CDMAs - also known as Private Telephone Operators (PTOs), as some of them are finding it extremely difficult to survive the stiff competition in the nation’s telecommunications industry. Analysts who spoke with Business Day yesterday, said subscriber preference for GSM technology, as well as corporate governance issues, low capitalisation and poor promotion of CDMA technology, have seen the fortunes of these CDMA operators decline over the years.

Speaking with newsmen in Lagos yesterday, Pathel said there was need for constructive measures by the CDMA networks with respect to consolidation. This, he added was necessary in light of the lopsided competition with larger GSM networks.

He also alluded to the tough operating conditions CDMA operators grapple with in their quest to provide efficient telecom services to Nigerians. According to him, CDMA networks put together control less than 10 percent of the telecoms market.

“We are very open to mergers and acquisition. It is necessary for our survival. It is necessary if we are to compete favorably in this market. There is a real possibility that within the next twelve months, the CDMA segment will witness further consolidation. Who will acquire who is another thing all together? I cannot give you that answer but I am positive that the CDMA segment will witness consolidation within the next twelve months.”

Usen Udoh, senior director, management consulting at Accenture was not surprised at the hint of another M&A deal in the CDMA segment, adding that it was inevitable going by the poor performances of CDMA operators. He said that CDMA operators must come together in the face of tough operating conditions. ‘The market points to more consolidation and it will happen”, he told Business Day yesterday. Meanwhile, Pathel is of the view that the emergence of Long Term Evolution (LTE) technology will imply that both GSM and CDMA can co-exist on this new wireless platform.

“Our technology is ready for LTE today. All our base stations are LTE ready but we need more spectrums to achieve full rollout. We are working in the background to achieve this. Our prime focus is to maintain optimum efficiency while reducing operating cost.” Pather noted that Starcomms LTE readiness will make it more attractive to investors. “When I am LTE ready, I will become an attractive company. Do you know how many investors have come into the telecoms market and failed? Those investors will want to come back given the right conditions. If there is going to be consolidation, we will have to put the business in a position where it would be valuable. The cost cutting will be very aggressive. However, consolidation will be self-induced.”

Speaking on his plan for the company as the new CEO, he stated: “My agenda for this company is survival. I have to make sure I acquire more subscribers. I must ensure that we are extremely efficient when it comes to cutting costs. We have made significant in-roads in cost reduction. Besides, what will differentiate us from other operators is customer service delivery.”

Confusion over SIM registration as agents outwit selves

Ben Uzor Jr

Confusion continues to trail the on-going SIM card registration as registration agents of partner firms’ contracted by the Nigerian Communications Commissions (NCC) and telecommunications companies (telcos) are in a fierce struggle to register more subscribers. Determined to meet the targets set by contracting firms and telcos, registration agents now use all manner of antics and guises to sway new and existing subscribers into registering their SIM cards with them. This, according to some subscribers has resulted in their inability to use their SIMs to make calls.

The NCC contracted seven partners to handle the registration process in different parts of the country. The contractors are: SW Global for South East; PNN for North Central; Chams will register subscribers in Lagos, while JKK will oversee those in South West. Others are: DataGroupIT for the North East; EAGLE/CBC for the North West, while E-Kenneth/SageMetrics will register subscribers in the South-South comprising. Informed sources close told Business Day that these contracting firms have directed their agents to register 420 individual per week as they stand the risk of losing their jobs.

“Most of these agents handling NCC’s registration exercise now use all manner of guises to lure new subscribers into registering with them when they do not possess the capacity to activate SIMs. “They are punishing Nigerians, it tantamount to disenfranchising the subscribers. This is one problem I have with the exercise”, Dele Ogunbanjo, president, National Association of Telecommunications Subscribers (NATCOMS) told Business Day. Agents registering for telcos have also been accused of misinforming subscribers by insisting that they register with them even after they have registered with NCC.

“We have said this clearly, if you have registered with NCC there is no need to register with MTN or any other Telco. If you have registered with MTN there is no need to register with NCC. “No telcos today is insisting on duplication of SIM registration”, Wale Goodluck, corporate service executive, MTN Nigeria told Business Day in a phone interview yesterday. Echoing Goodluck’s view, Reuben Mouka, head of public affairs, NCC said, “If you purchase a new SIM card there is no need to register with the NCC. Only operators are responsible for registration of new SIMs. These registration agents do not have the facility or the capacity to activate new SIM cards. Only an operator can activate new SIMs”.

Meanwhile, the NCC has warned telecoms subscribers and telecom operators over the sale, or use of 'pre-registered' SIM cards. Muoka, said the act of selling pre-registered new SIM cards to the members of the public by vendors or retailers, and use of such cards by anybody whatsoever, contravenes the regulation on registration of phone subscribers. He said such person or persons shall be liable on conviction to a fine, or imprisonment, or both, in line with the Nigerian Communications Act 2003.

He said the commission will also hold network service providers liable when such cards are found to be in use as they are expected to ensure that new SIM cards are not pre-registered before they are sold to members of the public through their various channels. Mouka said those found to be involved in this illegality will face arrest, detention, investigation, prosecution and sanction in line with the provisions of the Communications Act. He also warned the public desist from buying pre-registered SIM as they will also be liable if such line is in any way connected to any crime or misuse.

However, industry analysts maintain that the registration process has become a burden to many consumers. According to them, the sheer size of the country and the biometric requirements of the project greatly contribute to the inadequacy of registration points needed to cater to the entire populace in a timely manner. The burden on the consumer, according to them, is further increased by the fact that the majority of subscribers in Nigeria have more than one SIM Card for reasons of backup and cost-effectiveness. Others tend to have more than one SIM card for voice and data services.

Besides, this situation increases the burden on the registration centers to handle the numbers. Ogunbanjo said advocacy group was obligated to caution that the successes in the telecom industry over the last 10 years are now being threatened by the challenges faced with the registration of telecoms consumers, which is intended to curb the menace of the rampant abuse of telecommunications by criminals, especially the scourge of kidnappers. He called for proper and extensive public sensitisation down to the grassroots level, to enable Nigerians get proper information on SIM registration.

Nigeria needs 25 million PCs to attain MDGs, says Zinox boss

Ben Uzor Jr

If Nigeria intends to meet the Millennium Development Goals (MDGs) by 2015 especially in the Information Communication Technology (ICT) industry, the nation needs to deploy a minimum of 25 million Personal Computers (PCs) in the next three year, Leo Stan Ekeh, chairman, Zinox Technologies Limited, disclosed at the weekend. Ekeh, who made this revelation at a celebration of 10 years of ICT revolution organised by the ICT Publishers Alliance in Lagos, said that 3.7 million of these PCs should be deployed for each of the 6 geo-political zones. According to him, 2.5 million PCs should be deployed in Abuja, further adding that it would encourage even development; hasten the realization of the MDGs by 2015 thus placing the nation firmly on the road to actualising vision 20:2020.

“These PCs would be targeted at youths who leave secondary school with 6 ‘Alphas’ , and all graduating students from the polytechnics, Colleges of Education and Universities. The machines are to be funded by the federal government under an arrangement that requires all corporate persons to pay 1 percent ICT tax for a period of 5 years. “On the alternative savings from the sovereign wealth fund could be ploughed into the provision of these PCs in the next three years”, he added. According to him, these 25 million PCs are produced and delivered by the indigenous Original Equipment Manufacturers (OEMs).

Ekeh stated that this would address the problem of capacity building as Nigerians acquire more technical competencies. He said that prices would be forced down appreciably enabling the local OEMs to compete with their foreign counterparts, adding that Nigerian banks are not lending money to local OEMs and vendors because of unpredictable patronage. “Boost the local industry with 25 million PCs and you can be sure that banks would line up with all kinds of finance packages. Besides, the deployment of large numbers of PCs would boost participation in the development of software applications, the internet and social media and we can start talking of the ICT revolution in real terms”.

This huge investment, according to Ekeh, will power domesticated technology and place in the hands of Nigerian youths the equipment to launch an era of ‘unlimited possibilities’. “These young men and women would form the nucleus of a new generation of job providers while kick starting a new knowledge economy. Those of them who go into paid employment would be IT savvy enough to introduce a new era of efficient service delivery in public and private sectors. The Zinox boss criticized government’s inability to provide employment for graduates averaging 600, 000 per year because they still concentrate on deploying outdated solution in a digital century.

“This generation closely interconnected by satellite television, social media and the internet would give rise to a new ICT based work culture, increasing productivity and self sufficiency; reducing corruption and the kinship that leads to ethnicity; and enabling a self interpretation of faith that would undermine religious extremism”, Ekeh posited. Industry analysts say Nigeria’s low PC penetration hold significant prospects for local OEMs as growth in PCs penetration will be sustained by increasing awareness levels in the population, especially the youth, spurred by education, the internet and deliberate initiatives from industry stakeholders.

MTN plans $1bn investment in network upgrade

• Celebrates 10 year anniversary
Ben Uzor Jr

Mobile network, MTN Nigeria says it will invest an additional $1 billion in the current financial year, for network expansion and improvement of quality of service. Speaking at the company’s colourful tenth anniversary celebrations in Lagos yesterday, Brett Goshen, chief executive officer, MTN Nigeria, said the telecoms firm intends to further expand upon its subscriber base which currently stands at over 40 million. Goshen said as part of the strategy to achieve this, the network would deliberately push into underserved rural communities.

“We have close to 7, 000 base transceiver stations located all over the country, and we are still rolling out more. We have deployed one of the most expansive fibre optic (over 8, 530km) and microwave infrastructure (Y’ellobahn – 11, 500km) in sub-Saharan Africa. In a dynamic market such as Nigeria, you cannot stop investing if you want to remain the leader. That is why we are committed to investing an additional $1 billion to upgrade network in the current financial year”, Goshen added. The MTN CEO was, ably represented by Amina Oyagbola, human resources executive, MTN Nigeria.

However, Goshen maintained that the firm had witnessed unprecedented growth that it was now a global benchmark for what can be achieved an emerging economy. “One constant factor emboldened us to stamp our imprimatur on this market, and that was its enormous potentials; particularly the intelligence, can-do spirit and remarkable resilience of its citizenry”. He gave lucid insight into how the company was playing a fundamental role in driving socio-economic growth and development of the country through sustainable initiatives.

He disclosed that MTN Nigeria had paid about N700 billion in taxes and levies till date, and that 99 percent of the firms 2,200 permanent workforce is Nigerians. “As at today, 349 Nigerians hold management positions and 70 percent of our Executive Management Committee are Nigerians. Dependence on expatriates has reduced from over 300 expatriates who were mainly in the core technical components of the business in 2002 to only 18 as at July 2011”.

Pascal Dozie, chairman, board of directors, MTN Nigeria who was at the event commended senior executives of the firm including: Wale Goodluck, corporate services executive; Bola Akingbade, chief marketing officer; Karl Toriola, chief technical officer; Akin Braithwaite, customer services executive; for their dedication and steadfastness towards providing best-in-class services to its subscribers.

Speaking further, Goshen said the MTN Foundation which is funded by up to one percent Profit after Tax, has 20 projects across 292 project sites in 36 states and the Federal Capital Territory (FCT). “With over N5 billion so far deployed to fund numerous initiatives, the foundation is definitely fulfilling its pledge to improve the quality of lives in our communities”. The MTN Foundation, established in 2005, focuses on implementing high impact corporate social investments in three critical social areas of need – Health, Education, and Economic Empowerment.

The company used the occasion to the flag off “MyCustomer Week’, which is a week-long celebration of its customers, who are the cornerstone of the business. It entails a number of carefully planned activities aimed at rewarding its teeming subscriber. The MyCustomer programme was introduced by MTN Nigeria in 2009 to deliver a one-to-one preferential, best-in-class customer service experience. The programme is about ensuring that MTN delights it customers beyond their expectation. Furthermore, it is aimed at motivating every MTN staff to strike the emotional connection with the customers at every opportunity they have to interact with them.

MTN, Oando in robust retail expansion drive

. . . Telco to roll out 200 service outlets across country
Ben Uzor Jr

Driven essentially by the need to address pressing customer management demands and also to bring services to the door step of its teeming subscribers, mobile network operator, MTN Nigeria in strategic partnership with Oando Plc, yesterday disclosed plans to grow its retail presence with the roll out of 200 service outlets across the country. This, MTN further pointed out was another demonstration of its unflinching commitment to bring best-in-class services to its numerous customers.

Under the terms of agreement, MTN disclosed yesterday that a hundred of the service outlets would be deployed on the premises of Oando filling stations spread across the country. Currently, Oando Plc, sub-Saharan Africa's leading integrated energy group providing imaginative solutions to the region's energy challenges, has 600 retail filling stations across the country, and this, according to MTN explains why it decided to partner Oando.

“It is pertinent to add that in addition to the utilization of Oando premises, our Connect points will also spring up in many other open spaces including university communities nationwide”, Akin Braithwaite, customer relations executive, MTN, stated yesterday. He further revealed that MTN intends to deploy these service centres in the 774 Local Government Areas (LGAs) in the country. The service outlets tagged, ‘MTN Connect Point’, according to Braithwaite, forms a strategic part of the firm’s comprehensive customer outreach programme known as ‘Walk-in Service Everywhere’ (WISE).

He added that the primary aim of this initiative was to improve MTN’s customer experience by bringing services literally to their doorstep. “A typical Connect Point consists of a branded kiosk operated by a Connect Partner. The cost of the kiosk is borne by MTN. Each Connect Point is fully equipped with modern technology an is manned by two personnel who will carry out a bouquet of services, including SIM swaps, bill payment, query resolution, SIM registration, assistance to customers with product or service activation or set up, and customer enlightenment, amongst other services”, Braithwaite posited.

According to him, MTN had conducted extensive studies to establish where these outlets are most needed and thus deployment would be based on these findings. This strategy, he added was guided by MTN’s determination to ensure that none of its esteemed customers ‘needs to go too far to find competent support and assistance that will enable them derive true value from MTN’s products and services’. In the same vein, Rabiu Umar, head of retail, Oando Marketing, said that the firm’s desire to provide unmatched service experience to its customers was the rationale behind partnering with MTN.

“1 in 5 Nigerians buy petrol from Oando filling station and 1 in ten Nigerians use an MTN line. It is a synergy that would definitely work wonders. It is difficult to get customer service as Nigerians waste valuable man hours travelling long distances to experience MTN products and services. I think it is a very proactive initiative. At Oando, we will do everything to ensure that this partnership is a success”, he concluded.MTN continues to invest billions of naira into providing the best technological platform to improve customer care.

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Nigeria needs a national broadband policy– Opeke

MainOne Cable Company, West Africa’s first wholesale broadband capacity company recently celebrated its first year of commencing operations in Nigeria and delivering unmatched broadband services to Nigerians. Funke Opeke, chief executive officer of the company in an interview with select IT journalists’ talks about the challenges and prospects of broadband deployment in Nigeria. She says government must encourage infrastructure sharing in order to address the country’s last mile challenge. Ben Uzor was there.

Operations in the last one year

We have been in operation for almost one year, and we are delighted to note that in this first year we have connected majority of the large telecom operators and internet service providers in Nigeria and Ghana to the Main One network. We believe undoubtedly that we are the number one provider for wholesale internet into the West African market today. However, we are not pleased with the amount of progress we have made in bringing broadband to the overall population. And so that is the focus for going forward. We have done a great job of maintaining an extremely reliable network, and our network has maintained 100 percent availability since we launched a year ago. Even with some challenges, we are able to ensure 100 percent availability on our network for our customers. So our focus now is that have a stable operation and have connected majority of the operators and internet service providers, is to find ways to service the majority of the population that is still yearning for more broadband, higher speeds, low prices, easier access to such services.

Challenges

The challenges are one of distribution. We brought a big cable with a lot of capacity to the market and, we reduced the price points. Wholesale internet price points have dropped significantly, but what we find is that the infrastructure on ground to distribute is limited. And in the areas where better infrastructure or longhaul national backbone networks, metrofibre networks exists for example, it is controlled in a proprietary nature whereas an open access cable, any one can connect to us at a uniformly low price. The prices for accessing such capacity is prohibitive and so it limits how close to the consumer we can get with the capacity that we have brought into the region without building the network ourselves. Of course it is not cost effective. I guess every time we need power which is what we do in this country you buy a generator. It is not cost effective for us to start doing that all over again for domestic networks and so we are looking to work with the rest of the industry regulators to open up channels for us to move the capacity that we have available in our landing stations more effectively to the consumers who want that. And it is a mix of policy action, industry action and also the operators building up their networks, internet service providers building up their networks so that we can effectively get this capacity to the consumers who want these services.

MainOne’s Contributions to NCC’s broadband plan

We are in touch with the NCC and we have been requested to provide input on some items just recently and we also have our own initiative, providing input and policy papers to present what we think needs to be done in terms of a national broadband policy. We do not think that is something unique to Nigeria. The United States which is the most advanced technology in terms of ICT has a national broadband policy because they said broadband is becoming what electricity was to the industry and so for economic development to take place, and to ensure that for United State to remain competitive, they have easy and affordable broadband access for all their citizens. The International Telecommunications Union (ITU) is calling for a multifaceted national broadband policy because they see that it is critical to development, and clearly we as the stakeholders trying to facilitate broadband see that as essential for Nigeria in terms of its aspirations towards development, job creation, and improved education. We need to do more from a national policy standpoint, in terms of how we are going to stimulate broadband and ensure that the benefits actually accrue to the Nigerians who need them the most.

Partnership with Glo-1

I think we co-exist, and actually we co-exist well. I don’t see that particular area as a challenge. I think in most markets, you have multiple cables because you want diversity. And should things go wrong, then the country and the operators in that country still have connectivity to the internet. We’ve had instances in Egypt where three cables were cut and so it was difficult to get access to that country. But the availability of multiple routes allows for constant connectivity. An analogy would be having only one airline coming into Nigeria and if that airline were grounded, people cannot travel out, which would be a faulty model. Where the challenges exist is in the national backbone. If we look at things today, the price of moving capacity from Victoria Island to Ikeja in some instances is higher than the cost of our moving that same capacity from Lagos to London. As you may note, even the international voice calling prices to London, New York and major cities have come down considerably, but calling across networks in Nigeria is still at a higher cost. So clearly that is not directly related to the cost infrastructure. It’s related more to the approach to the market and that’s where collaboration is required because a lot of national backbone networks have already been built. The right of way are along government roadways. Concessions have been granted. But concessions have been granted to deliver services in an open and balanced manner as opposed to a proprietary manner for the exclusive use of the person who built the infrastructure. And if we continue to have frameworks where things can only be utilised for the exclusive use of the person who constructed the infrastructure, when public assets are involved in delivering bills, then the best interest of the population is not being served. And in other markets where you have open policies for accessing such infrastructure in a fair and balanced way, the investor needs to be rewarded, they need to be able to get their return but the price also needs to be determined in a way that is reflective of the real value and to ensure that the policy objectives of the country, of the regulator are being met. I will say for Nigeria, if we want to develop economically, we have to increase the adoption of ICT, we have to get better connectivity into our schools into our universities. We have to get better connectivity to government establishments, our businesses have to be better connected to increase productivity and market reach. And so this is critical for us as a nation to get this right and that is why all of these bodies, ourselves included, are advocating a national broadband policy that lays out a pragmatic roadmap on how we can get the capacity that is now available across the shoreline, so to speak, of Nigeria to the hinterlands.

Thrust of national broadband policy

The key issues that should form the thrust of the policy is a review of the national backbone, access, availability and Interconnection. Look at the industry structure. Do a cost and price determination study and see if it is been managed in an open manner or what kind of rules or policies need to be in place with respect to infrastructure sharing on the backbone. In addition the NCC needs to look at matters of spectrum and frequency and distribution and look at what policies or what objectives we are trying to effect and how some of those resources are being allocated to actually achieve the objectives. Also evaluate how when they are allocated they are managed to achieve those objectives. If these resources are allocated but there is no enforcement, then those resources are now not being deployed to achieve what we set out to achieve; which is get broadband to the masses. We need to ensure we are putting the things in the right places where it is driving the right results. And I would say at this point in time for Nigeria, clearly ICT adoption, internet connectivity, broadband availability are what we view as the next major milestone. Voice connectivity is in most parts of the country today. You can be reached via a mobile phone for voice conversation. What we need is data for our use, for our work places, for business, for job creation, commerce, security monitoring, more effective law enforcement to be able to send which data over the internet and have instantaneous remote monitoring. All of these are critical issues. Clearly we need to get broadband across the country and that’s what we see. It is opening up the infrastructure that exists and setting the framework for sharing access to the infrastructure.

Listing on Nigerian Stock Exchange

Main One is a wholly African owned company. The company and its shareholders are constantly looking at ways to maximize their return on investment. A lot of the companies that invested in Main One directly and indirectly are publicly listed institutions. So it is not unlikely that they may like for us to move in the direction that opens up the ownership of the business to other members of the society as well. We haven’t made a decision to do that yet but it is something our current owners may look at doing if it helps bring more capacity and enhance those values that will move the company forward. In the meantime, we will continue to deliver the value that we set out to deliver in terms of broadband service penetration and also to achieve return on investment for our investors. When we do make a decision in that regard, I am sure you will be among the first to know. With respect to Phase II, we thought we would be doing more in Phase II but in reality as we’ve discussed, the challenge of distribution, just the insatiable demand in our market that we’ve really struggled to meet has consumed more of our energy and resources. As discussed earlier, putting more into building domestic distribution as opposed to expanding the network has been the focus. We are looking more closely at that now. We believe that extending the Main One system to the South South region of the country is of utmost priority. If we think of the main developmental objectives there, if we look at the means to get capacity to that part of the country today and the cost of doing so, we believe that another solution is urgently required. So we are focused on working on that with some degree of urgency. In addition we see the need to continue to go south and extend the cables to other countries down south West Africa, so to speak. So we are putting more attention on that now with particular emphasis on another landing in Nigeria in the South-South region. 10 years of GSM, we think it is a wonderful thing. Look at what policy shift and effective regulation and private sector capital is able to do. We think it provides a model in terms of what can be achieved if you look at regulation. We also want to highlight likewise we are talking about the issues of distribution and a broadband policy, shared infrastructure on national backbones, when shortly after GSM companies came in, they had to fight on issues of interconnect, and interconnect regulation and that really facilitated the growth of the multiple networks, the competition and the reduction in prices that we have seen over time. In the broadband arena, we think of effective regulation, right policy, and private sector participation to drive growth. We are looking forward to a phenomenal decade of growth in driving broadband and having to seek more impact on our economy. We would also like have more indigenous impact on our economy. We say this for Nigeria where we operate, we say the same thing for Ghana where we also operate and have good traction with our business in Ghana. . The business there is managed and run by Ghanaians. We are hoping to drive indigenous value into that economy by partnering with Ghanaian internet service providers. Connecting schools, connecting government offices, connecting businesses to bring economic development in our region.

Assess partnership with Global Crossing and Seacom

Global Crossing is a Tier 1 internet provider that we have partnered with recently. Currently most of the internet traffic originating or coming back into Africa is actually switched in Europe. So when we came into service last year, if you give us traffic and we are sending it to connect with your friend here in Nigeria...even though we have an internet exchange here, we send traffic to be effectively connected by the operators to reach Tier 1 providers in Europe, switched in Europe and then brought back into Nigeria. What we are doing with Global Crossing is we are building an IP NGN (Next Generation Network) platform in West Africa. Traffic originating in West Africa, terminating in West Africa should not have to go Europe to get routed back into the region. If the traffic is what goes to other part of the world, then this means that Global Crossing as a Tier 1 internet service provider is one of the top ten movers of traffic of the global internet. So we have partnered with them to route that traffic through their network to other parts of the globe. However, in concert with that, we have put infrastructure in place that ensures that traffic originating in West Africa, stays on our network, and we can route it to a terminating node that is connected to us on the internet. With respect to Seacom, Seacom runs a similar infrastructure where they also have that kind of IP connectivity down the east coast of Africa, and what we have done is connect our networks in London so we can provide services across the region. So all the way from Nigeria, Ghana through to the countries down the east coast of Africa, Kenya and South Africa being the most prominent, we can deliver services to customers in these places.

Return on Investment

We are still investing, because as we mentioned we are compelled to invest more in enhancing distribution infrastructure than anticipated. We have put in a new IP network to switch this traffic in Africa. That’s new investment. We are interconnecting with other networks; so that’s new investment that we are making around the globe to interconnect with these networks. So we are still investing. I think the outlook on ROI remains positive. We have built up a healthy business within one year. We are self funding our operations and funding these additional investments. So we have stable business and the outlook is good. But do we have a return on investment to the original investors as of yet? We are still working to achieve that objective.

Broadband penetration

I think we need, when we look at the size of the youth population, and I would bring that a little differently, when we look at our objective in terms of employment, job creation, security, I will say we need to set a goal as a country on what we want to achieve within what period. And I will say realistically that you should start seeing real impact in 12 – 36 months. 12 – 18 months you should start to really feel a lot of what’s going on. So I believe the way I would approach it is for the government to say we need to get to 40 percent penetration. And what is it going to take to achieve that in this period. If you look at recent economies and a lot of examples who have similar policies in place, for example, South Africa, Kenya, some of these countries are high internet users and they have declared what it is that they want to achieve in terms of broadband penetration. When we bring that home, we want every school to be connected, we want every police station to be connected, we want every local government to be connected, and we want every community of a certain size to have this kind of access. So if we put that kind of policy in place we can start to think practically about how do we achieve this? What kind of policy frameworks do we need at what period? What kind of incentives do we need? Who are the parties that we can work with to make this happen? And then I could say that if we set milestones in 12 months, 24 months, 36 months, we have a clearer plan on what we want to achieve.

Estimated investment

In terms of the task force, I am not sure. We have seen GSM take off. We have seen GSM penetration rates above 50 percent, led by the regulator and the private sector. So I think it’s a policy framework, enforcement of the policy framework, working with the private sector. I don’t see the need for a separate task force but as part of that, if the government feels there’s need for a taskforce, then we would see how that really adds value to the process. But I think we have the institutions on ground and the bodies on ground to do this. It is really engaging them and setting the goals and say what do we need to do differently? But I don’t know that we need new bodies or new structures necessarily. Certainly perhaps, more focus on ICT at the Federal Government level might be interesting. There’s already the Ministry of Communication, the NCC, there’s the Ministry of Science and Technology, there’s NITDA, we have enough agencies. I think maybe not task forces. We just need to be clear about who has the mandate to do this. We believe the NCC is the regulatory body for our industry; they have to regulate telecom operators and internet service providers. So they have the lead responsibility on this. They can set up policy and enforcement and work with the industry to achieve it. So we don’t know if there’s a need for a task force. In terms of investment, we invested $240 million initially to get the cable in service. We have made some other small investments. I will say we have probably made close to $250 million at this point in time that we have invested in the network overall.

Broadband strategy and infrastructure sharing

The infrastructure is the key thing. So it’s a mix of things. As we said, share infrastructure where it exists. We think it’s a mix of leveraging what’s already on ground and ensuring it is being used efficiently and also augmenting that with new builds perhaps in the rural areas where fibre does not currently exist. The major routes in the country today, multiple fibers already exist. So why can’t we jump on that and start right away leveraging that and retrofitting that? The retrofit is necessary, not a whole rebuild to ensure that Nigerians can start benefitting from fast broadband almost right away. So, yes it is infrastructure related. It is ensuring we open up and have right rules for deploying infrastructure. It is issues of right of way even to get into some of those rural areas. How many government agencies do you have to go through? What kind of fees do you have to pay to deploy infrastructure? You have to pay the Federal Government, the State Government, the Local Government and the local area boys in town to get your infrastructure deployed and each one is a separate negotiation and process. They take multiple months. And then we really have to get the equipment in place to do the work. The skills; you see how long it takes. So, yes, it is infrastructure related. But we will be missing a huge opportunity if we don’t look at what is already in place that we can leverage. Two reasons: Time – we’ve been hearing things about Vision 20:20 and all that. So time clearly is an issue in terms of the global market place and the global market economy and having Nigeria catch up and become more competitive and diversify from what we know it as a single commodity economy to a multifaceted economy. The other is actually the cost of production and being able to now manufacture goods, export agricultural products and process them. Deliver services out of Nigeria. If we keep building infrastructure over infrastructure, without ensuring we have a healthy framework for accessing existing infrastructure, we are just making the cost of production in Nigeria artificially high. We think that at the end of the day we don’t achieve our objectives because we cannot be competitive on a global basis. It is because the costs of delivering those services out of Nigeria are still high. Let’s look at what exists and how best to achieve this policy requirement. It is not just saying that everybody should go build because if everybody goes build and build ten networks on top of each other, then everybody is trying to recover their costs. You build a mini cartel. The consumers pay multiples of what they would be paying in other markets. This is when someone has to reproduce a service or a document and send it over that network in Nigeria; it’s going to be 10 times more expensive than what it is to do that in an economy where they have figured out how to share that asset. And so the cost of transmission is 10 percent of what you have here.

Government intervention in telecoms

It’s a difficult one. What I would say is that as a nation we need to think of how we leverage ICT to achieve our developmental objectives. When you look at other economies, it used to be the industrial age and now we are clearly in the Information age and Nigeria as a country has not participated in any meaningful way other than as consumers of information technology. If we are going to build our economy and create wealth for our people, if we are going to create jobs for our young people, if we are going to create service industries here, as in India, in China, in Malaysia, in Philippines, IT has been one of the key enablers of jobs. I think the ITU says over the past decade, IT has been the largest driver of job creation anywhere in the world. Nigeria wants job creation, how are we going to use IT to do that? I think it is when we have that framework; we can start to say within that framework how do we help the industry develop to ensure that those economic development objectives are achieved. So I don’t think the government should be going out and helping companies on a case by case basis just because they are distressed because you do not necessarily understand the reason for that distress. But I think that to the extent that you have a framework for how we want to support ICT, how we want to use ICT to expand Nigeria’s economy, how we want ICT to grow, once we have that, then within that framework we can look at the structure of the industry, we can look at the players of the industry and say where should the government be providing more support so we can actually achieve that vision.
I do believe that in that context, if that is done, that yes, there are some sectors or some parts of our industry today in Nigeria that could benefit from support. Look at ISPs, I want more indigenous service providers otherwise we are going to wipe out all of the indigenous service providers. How are we going to serve the rural areas? How are we going to serve the secondary cities? Why can we not support those ISPs to deliver services in those areas? I worked for Verizon in the US, when you think of how many people they employ and the good jobs they have, how many service providers that they have, deploying broadband into homes, setting up networks, call centres for services, billing, all the things that go with that. These are good quality jobs that afford people a good standard of living. So we have to think about how we use ICT to do all that in our industry. We are powerhouse in West Africa. If we start doing that, Nigerian banks all over, how can they start doing more financial processing? Why should we send a lot of our financial transactions to Europe out of Africa? Can West Africa, can Nigeria become a processing hub for that? Of course with ICT we have this reputation about security and 419. We can build all the structures to make this secure, to authenticate the transactions. We have all these biometric capabilities. We can make it secure. We can build that infrastructure. We can build expertise in security to wipe out this reputation we have for 419. We can train our young people to do that. So clearly that is what I see is the opportunity to do a lot of these things.

Commitment to customers

First of all we want to thank our customers for the confidence in us and for giving us the opportunity. Coming into the market as a new company and becoming number one in delivering wholesale services to them demonstrates significant good faith towards us. Without having those customers, we would really still be struggling to sustain ourselves as a business. So we appreciate the trust and confidence they had in us to give them the opportunity. We believe we have been of good service to them in this first year that we only think we are at the beginning of the journey together. Our focus is to continue to deliver more wholesale value with the speed we have. There’s a lot in terms of broadband service platforms and application service platforms, cloud computing, additional services that we can provide on a wholesale basis for internet service providers, telecom operators to take to the market. So we can leapfrog in this broadband revolution that we are trying to achieve in West Africa. And to our customers, we just want to say thank you. We want to continue to partner. We have started a Partner Advantage Programme where we are starting to work with them more closely to accelerate this deployment of broadband. We will continue to invest in that. We will invest in our partners to ensure that jointly we can achieve this vision and partner in success together.