Nigeria’s internet quandary force operators to adopt new wireless platform

• Globacom, Mobitel, Swift, DOPC make inroad
Ben Uzor Jr

Recognising that existing wireless technologies will not be the definitive solution to internet access in Nigeria, telecommunications firms and Internet Service Providers (ISPs) are migrating to an innovative wireless platform which promises to open up new revenue generating streams for them by enabling new capabilities well beyond mundane voice and data services, Business Day can now reveal. Globacom, Mobitel, Swift Networks and Direct-on-PC (DOPC) have all announced and launched 4G-LTE networks.

Though, other telcos are keeping plans close to their chests, MTN, Starcomms, share the view that LTE-4G will enable them offer better value to their customers. Industry analysts have doubted Globacom’s claim because suitable spectrum was yet to be issued and also because compatible devices were yet to become available in Nigeria. On the other hand, analysts told BusinessDay yesterday that intense competition is forcing telcos and Internet Service Providers (ISPs) to reassess their data strategies.

“Telecoms companies are reassess their data strategies to make certain that they generate considerable revenue from the internet access market in coming years”, Adebayo Oyewole, head of marketing and strategy for MainOne Cable told Business Day recently. The reassessment exercise, according to informed sources had begun in the preceding year in anticipation of the landing of MainOne and Glo-1 underwater cables. Geared up to take advantage of the new infrastructure, management of some of the telecoms companies have started re-adjusting data strategies to meet current market demands.

At the moment, some telcos are embarking on strategic multi-million dollar infrastructure projects while others are testing new technologies and platforms; all geared towards strengthening their data services segment. Gbenga Adesanya, a telecom analyst told BusinessDay that mobile network operators (MNO) are paying ardent attention to data services as the next revenue generating stream because forecasts have shown that the bulk of telecom revenue was expected to come from mobile broadband and data in the next five years. Data segment accounts for a paltry 10 percent of telcos’ revenue.

BusinessDay learnt that Mobitel Limited, pioneer WiMAX service provider, has adopted an aggressive three year-strategy plan for data services. This, it was learnt will culminate in the replacement of its current WiMAX platform for the revolutionary 4G-LTE; offering its customers superior quality of service. In a document sighted by BusinessDay, the firm said that it sees LTE as a unique differentiator in delivering best-in-class, superfast broadband service, and multimedia streaming amongst other services.

Similarly, Second National Carrier, Globacom has begun testing LTE in 30-40 locations in Lagos, with preliminary results showing that speeds are ten times faster than available 3G services. Investigation revealed that Globacom was currently using a combination of its existing GSM and 3G spectrums to conduct LTE testing, but intends to obtain either 2.1 or 2.6 GHz licenses from the NCC. On the other hand, Airtel is building a 3G network expected to cover 80 percent of Nigeria’s population by 2012 and required to offer reliable and affordable internet services to its customers.

Rajan Swaroop, chief executive officer, Airtel Nigeria, confirmed that the project was indeed strategic for increasing market share in the data internet segment of Nigeria’s highly competitive telecoms market. According to the analysts, Nigerian internet users have continued to express their discontent with the slow and exasperating access to the cyberspace even with the landing of two submarine cables (Main One and Glo-1) on the country’s coastline. For years, the only cable system serving Nigeria’s internet and data needs was the SAT-3 submarine cable. Besides, stakeholders expect better service delivery as more telecoms firms and ISPs migrate to the LTE-4G platforms.

Charles Anudu, managing director, Swift Networks, who spoke with Business Day in an exclusive interview on the company’s new 4G broadband internet offering, believes that the deployment of 4G networks and services in the country would assist the industry to potentially get ahead of many markets on the global stage, thus, putting Nigeria on the fore rather than playing catch-up. “4G will enable telecoms operators to use their existing frequency to deliver more capacity and throughput of data. 4G essentially means that for the operator, we are able to do more with same spectrum as we would have done with either 2G (Second Generation) or 3G (Third Generation) network.

For the telecoms subscriber, it means that they can actual access the internet at a more higher speed using the same spectrum that was available to the telecoms operator”, Anudu stated. In the same vein, John Salako, chief executive officer, Mobitel, noted that this technology platform was well positioned to drive the Nigeria’s evolution towards pervasive wireless broadband communications with huge market acceptance, rich ecosystems, and promising economies of scale. In the estimation of analysts, 1.8 billion people worldwide will have access to broadband services and nearly two-thirds of this number will be mobile broadband consumers who will be served by 4G-LTE networks.

Giving insight into what this new wireless platform can do in terms of enhancing service delivery and improving the bottom line of the business, Mohammed Jameel, group chief operating officer (GCOO), Globacom argued that its LTE network can better leverage the enormous bandwidth capacity coming from Glo-1 underwater cable. “We will now connect demanding corporate customers and high data users through our latest LTE wireless broadband connection to Glo-1 and then the rest of the world.

“For our subscribers, 4G-LTE offers the key benefits of performance and capacity. In addition, it will enhance more demanding applications like interactive Television (TV), mobile video blogging, advanced games or professional services”, the GCOO further explained. According to Jameel, though Nigerians can already browse the internet or send e-mails using HSPA-enabled systems and send or receive video or music using 3G devices, the experience with LTE-4G will be even better.

LTE-4G is a revolutionary Fourth Generation Mobile Technology which enhances data transfer rates, providing unmatched mobile broadband experience. By delivering speeds ten times faster than available 3G services, this new wireless technology will provide telecoms consumers in the country with widespread all-IP based services such as superfast broadband access, video blogging, high quality multimedia streaming, enhanced gaming services etc. Business Day checks reveal that 24 networks worldwide have successfully adopted and launched 4G-LTE networks.

CBN may extend time-line for mobile money take-off

Ben Uzor Jr

There are strong indications that the Central Bank of Nigeria (CBN) may extend the deadline given to Mobile Money Service Providers to granted provisional licences to provide payment services in the country, Business Day has learnt. Industry analysts told Business Day at the weekend that the CBN would not adopt a stringent stance in this circumstance due to the complexities inherent in rolling out such services.

In 2010, the CBN granted 16 operators approval-in-principle to operate mobile money services in the country. They include; Stanbic IBTC Bank Plc, Ecobank Nigeria Plc, Fortis MFB, UBA/Afripay, GuarantyTrust Bank Plc/MTN and First Bank of Nigeria Plc. Others are Pagatech, Paycom, M-Kudi, Chams, Eartholeum, E-Tranzact, Parkway, Monitise, FET and Corporeti.

The operators were given four months (January to April this year) to demonstrate their capacities to roll out mobile money networks. At the end of the said period, mobile money operators were expected to return for an assessment to ascertain if the approval-in-principle licenses will become permanent.

Industry analysts however observing the scenario at play say that they are optimistic the CBN may grant more time to mobile payment operators to enable them “perfect the processes and procedures needed to prove beyond any reasonable doubt that they possess the requisite competence” to roll-out mobile money networks in Nigeria. Besides, Abayomi Atoloye, director, banking and payment systems, confirmed that the apex bank would not sanction operators, according to a document sighted by BusinessDay.

Atoloye, in the report, had said that the CBN would rather grant them an extension of the deadline. According to him, being a new initiative, it was important to perfect the processes and procedures to avoid mistakes. He did not however say how much time the operators have but noted that decision on that would be taken at a meeting later this month.

Emmanuel Okogwale, managing partner, MobileMoneyAfrica who spoke with Business Day in an interview gave reasons with the CBN deadline. Okogwale disclosed that some mobile money operators do not want to invest hugely in acquiring new technologies and still be subjected to final licensing. According to Okogwale, if the CBN refuses to grant them permanent licenses how would these operators justify the investments made?

“Aside from technology which is available off the shelf though expensive, another issue that many of the providers are still faced with is the mind set of thinking mobile money is a technology offering rather than an agency offering. Signing the agents, recruitment, training and deploying a well developed agent network is the major obstacle facing the providers. “Many potential agents do not know on what authorization are these providers acting on.

“I think the CBN should step in by allaying the fears of the agents and also help the industry in developing a standard enterprise Risk and mitigation framework”, he stated. Miebe Senge, industry analyst agrees with Okogwale, adding that the absence of uniform short code access, security issues, among others have combined to hobble the take off of the initiative.

Meanwhile, Mobile money service providers’ licensees in Nigeria have complained that the lack of channels are frustrating efforts to implement robust route to reach the mass market. Chike Onwuegbuchi, another analyst pointed out that majority of the operators are struggling with Unstructured Supplementary Service Data (USSD) which is easy to use and works on all phones because telecommunications operators are unwilling to carry the licenses on their network.

According to him, mobile money operators are providing services mainly on Java and WAP which are not within reach in most rural areas with limited GPRS footprint, incompatible devices as well as limited education and awareness.

Some mobile money licensees have not being completely quiet in terms of expediting processes for roll-out of mobile money as e-Tranzact, one of the licensees has perfected its interactive unstructured supplementary service data (USSD) to improve access to mobile banking services by all mobile phone users in the country, irrespective of their handsets. Elsewhere, Fortis Mobile Money, based in Abuja, is said to be currently training verified store owners and communities on the new innovative channel to deliver basic financial services.

In addition, Pagatech has entered into an agreement with Multichoice to pay monthly DSTV subscription via installers’ outlets in selected locations.

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MainOne opts for bottom pricing as Starcomms splash N1.4 billion on network expansion

Ben Uzor Jr & Adelani Ashamu

Two major Nigerian telecom companies are pushing the boundaries of competition further with strategic price and investment moves that will position them for future customer-skimming. First, MainOne, the underwater cable operator, yesterday fired a fresh shot on radical pricing in the cable market by proposing new adjustments in its pricing strategy, aimed at encouraging more uptake of bandwidth subscription below 10 megabits per second.

At the same time, Starcomms, one of the Code Division Multiple Access (CDMA) telecommunication operators in Nigeria, disclosed fresh investment of N1.4 billion ($9 million), to improve capacity and strengthen its network in 10 cities in Nigeria. MainOne says it would achieve its new pricing strategy through a Partnership Advantage Programme (PAP) strategically designed to provide pricing incentives to customers aimed at increasing their volume of business with MainOne cable.

Prior to this initiative, capacity was offered at MainOne's IP (Internet Protocol) Transit and IP Internet Access offering from 10 megabits on its Pay As You Grow (PAUG) service offering which allows customers to start at 45 Mbps and grow into STM-1 (155 Mbps) through its wholesale products. This new initiative, the cable company said, would allow Internet Service Providers (ISPs) and telecoms operators to increase subscription and accrue benefits rapidly, and thus drive increased utilisation for MainOne pipe.

Industry analysts told BusinessDay that the move would assist in growing MainOne access to the market, and accordingly, achieve the desired objective of increasing broadband penetration in Nigeria. "MainOne is looking to create opportunities for telecoms companies and Internet service providers to expand their portfolio and generate a continuous, incremental revenue stream based on the MainOne network," Gbenga Adesanya, a telecom analyst said.

Speaking at the launch of the company's Partner Advantage Programme in Lagos, Funke Opeke, chief executive officer, MainOne Cable Company noted that customers were not experiencing the expected reduction in prices since the submarine cables landed. She added that the firm had continued to receive feedback and inquiries from end users about direct connectivity to the MainOne platform.

Meanwhile, cities targeted by Starcomms in its investment expansion drive include: Abuja, Oron, Ikot-Ekpene and Eket (Akwa-Ibom State); Jaji, (Kaduna State); Suleja (Niger State); Maiduguri (Borno State); Umuahia (Abia State); Tinapa (Cross River State) as well as Agbor (Delta State).

Chief Operating Officer at Starcomms, Logan Pather who made the disclosure yesterday, told IT News Africa that the investment would cover the areas of equipment and logistics, among others; a process that aims at seeing the company rolling out services to other parts of the country where the company previously had no coverage.

Pather explained that the investment would also lead to the improvement of its capacity in congested sites and areas where it currently has coverage, assuring that subscribers to Starcomms services, within the next three weeks, would be engaging in commercial launches in all 10 cities.

According to him, "Starcomms has continued to make significant investments in the telecommunications industry, despite the difficulties that characterise the business climate in Nigeria."

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Main One, Seacom in capacity agreement for internet services

…may speed up process to link Nigeria, S/Africa via undersea cable
Ben Uzor Jr.

Underwater cable operators, Main One and Seacom, said on Wednesday that they had interconnected their West and East African cable systems, offering connection between any point of presence (POP) between South Africa and Nigeria. Analysts told BusinessDay on Wednesday that this partnership may provide the needed conditions and prompt investors behind MainOne, a Nigerian-led system built on open access principles, to expedite processes to extend their cable south to South Africa (SA).

“MainOne has had plans for a phase-two extension of its cable to South Africa for some time. This may provide the incentive it requires to move forward with the second phase of the project”, one industry analysts who pleaded anonymity told BusinessDay on Wednesday. Moreover, the joint solution would be provided on an open-access basis and would be immediately available, providing customers with a timing advantage ahead of the completion of other planned submarine cable systems around Africa.

Other planned undersea cables in Africa include: the West African Cable System (WACS) being constructed from Europe to Africa – an initiative operated by nine countries (MTN Group inclusive). The cable has already landed in Togo and is expected to berth on the coast of Nigeria by the end of the first quarter of 2011. There is also the ACE cable covering Nigeria and other countries which will stretch 17,000 kilometres from Penmarch, France, to Cape Town, South Africa, connecting 23 countries.

Besides, the cable will have built-in 40 gigabit per second capability and it is slated to be operational in the first-half of 2012. Funke Opeke, chief executive officer, MainOne, in a statement made available to BusinessDay on Wednesday, said: “While efforts to implement a physical cable between Nigeria and South Africa continue, we have joined our cables together in Europe to satisfy many of our customers’ immediate requirements for capacity between Nigeria and South Africa.”

MainOne offers open access, wholesale broadband capacity in West Africa. Its submarine cable system commenced operations in July 2010, linking West Africa to the rest of the world via Portugal and the United Kingdom (UK). On the other hand, Brian Herlihy, chief executive officer, Seacom, stated that the company holds the view that a ring-type system around the entire continent is the best way to attain adequate redundancy while offering customers a comprehensive connectivity solution.

“The announcement shows our determination to find a viable way to extend our system with partners who share our vision to build the African internet.” Seacom is a privately financed, developed and owned submarine fibre optic cable network providing broadband capacity to Africa through the sale of wholesale international bandwidth and associated services on an open-access basis since July 2009. Stretching 17 000km along the eastern and southern African coastlines and onwards to India and Europe, the Seacom system connects many African countries including South Africa, Mozambique, Tanzania, Kenya, Rwanda, Uganda, Djibouti and Ethiopia.

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