Benuzorreports.com

Positioning Nigeria’s software industry for global competitiveness

2012-02-13T05:21:00.000-08:00

The software arena has become an essential strategic resource for intellectual capital, investment opportunities and value creation in any given economy. With Nigeria pointlessly spending over N25 billion in the past decade on importation of foreign software solutions, repositioning the nation’s software industry is key, writes Ben Uzor

Undoubtedly, the global economy has moved from agricultural, industrial to post-industrialism where information asset is currently perceived as a key driver for economic development, competitiveness and business improvement. Interestingly, the range of ICT-related concerns facing policy makers has increased dramatically in recent years: communications infrastructure, procurement for government automation and electronic government (e-government) programs, intellectual property, government-sponsored research programs, incubators and technology parks, engineering education, foreign investment and, of course, the potential for export revenue.

However, it is usually in this last area that the potential for dramatic economic growth like India or Ireland, which initially brought software to the forefront as a separate issue within ICT. To this end, the software arena has indisputably become an essential strategic resource for intellectual capital, investment opportunities and value creation in any given economy. Software is a relatively low-investment, environmentally friendly, high-growth global industry – a good target growth industry for many countries. But it has also become the most critical and expensive element of the government and business systems that every nation must build for itself.

Currently, the software industry in the United States of America (USA) is considered the third largest business after automobile and electronics. Moreover, software exports has major share in India’s total exports. Available statistics from the United Nations Conference on Trade and Development (UNCTAD) reveal that as 2004/2005, both software and services revenue grew by 32 percent to $22 billion and $28.5 billion in 2005/2006. As Stanford Professor, Edward Feigenbaum put it while serving as chief scientist for the United States Air Force; “we now live in a “software-first world.” The growth of the global demand that makes software exports a growth industry is driven by the continued consumption of software by other countries and business enterprises.

Every software-exporting country has evolved a unique industry, shaped by its own resources and situation and by the particular global opportunities presented at the time. For example, Japan exports mostly software games; India exports primarily software services to large software development shops while Ireland exports software products (created by MNCs located in-country as well as by a growing number of indigenous companies. In addition, Israel mostly exports software technology which is subsequently productized by firms in the US and Europe. There is no gain saying that the global software industry has continued to evolve, as countries now look to develop their software exports face a different global situation. Furthermore, they are likely to evolve fundamentally different software industries. In the light of this, current shape and dynamics of the software industry should therefore inform ICT planning and policy, no matter the country’s stage of economic development.

Nigeria’s software market

The country’s software market is dominated by imported packages. While this do not mean that Nigerian firms are simply retail outlets for those packages, the imported packages form the base for further software services to be offered by these firms. In part, this servicing derives from contextual differences: the fact that software packages developed in and for industrialised country markets are not exactly applicable in developing countries without some adjustment. While other nations continue to earn significant revenue from software exports, Nigeria is still groping in the dark, making pointless expenditure of over N25 billion in the past decade on importation of foreign software solutions.

This figure however represent only companies that registered their technology transfer agreements with the National Office for Technology Acquisition and Promotion (NOTAP). Stakeholders in the Information Communication Technology (ICT) industry revealed that Nigeria’s dormant software industry could spring up to become the much anticipated alternative to crude oil with respect to wealth creation and revenue generation, if only the Federal Government can increase its level of participation by way of formulating effective policies, creating the enabling environment and providing appropriate infrastructures to aid software development.

They further blame the industry’s snail speed development majorly on government’s refusal to increase tariffs on imported software to discourage imports. According to them, the Federal Government should increase investment in the area of establishing more national IT parks and clusters with appropriate policies on infrastructure, human resources, incentives and business plan. Chris Uwaje, president, Institute of Software Practitioners of Nigeria (ISPON) projected that the country’s software technology, if well retooled and strategically positioned for global competitiveness could earn about $10 billion annually from foreign software exchange.

He further challenged the present administration to become proactive and create the needed enabling environment for local capacity. The key benefit of a vibrant software, he added was in producing more knowledgeable and better skilled human capital for nation building. “Software has become and will remain one of the fastest growing industries with power to enrich, and sustain national economies. With youth population of about 43.2 percent, Nigeria possesses an immense advantage and capacity to encourage the emerging knowledge information society and succeed best practices and quality standards are established as strategic imperatives to match global competitiveness,” Uwaje posited.

In the same vein, Jimson Olufuye, past president, Information Technology Association of Nigeria (ITAN) called for the need to lay emphasis on training to produce an army of highly skilled Information Technology (IT) professional in terms of tertiary and non-tertiary and non-tertiary IT training at various levels. According to Olufuye, “Software is a product of profound human capacity. We need to develop our human capacity and channel their mind set on software design and architecture on various technology platform. “As regards policy formulation, the IT policy has given priority to software development but it seems that the political will is absent to pull it through.

“In addition, we need to establish more IT parks with appropriate policies on infrastructure, human resources, incentives and business plan.” Moreover, issues such as the absence of software quality assurance, poor investment in software development, poor product standard, scalability, lack of proper documentation which creates a gap in business continuity because the knowledge resides in one person, have all dogged the growth and development of Nigeria’s software industry. To this end, Nigerian firms spend huge foreign exchange on importation, repatriation of royalties and all manner of fees to foreign companies that most local players represent in the country even where the local firms have developed expertise to earn and keep their earnings in the country.

Indigenous software developers

With regards to the state of the industry, indigenous software entrepreneurs opine that the industry is characterized by fragmented players with little or no governing structure. According to them, there are a lot of skilled programmers with minimal or no business acumen. But more importantly, the regulatory framework remains weak and offers minimal support and protection for intellectual property rights and privileges. They however observed that the nation’s educational system and curriculum continues to be a problem, not focusing on the right learning and skills. Commenting on the present state of country’s software industry, Wahab Sarumi, chief executive officer, Wadof Software Consulting urged the government to come up with policies that would ensure that locally-developed software are being used by organisations in Nigeria.

He added: “Indigenous software developers are an endangered species, abandoned by the government, neglected by its own people and bullied by the poachers from India, to whom Nigerian businesses rush to buy software applications to solve local business problems.” Giving a different view of the problems of Nigeria’s software industry, James Agada, managing director, ExpertEdge Limited noted that the problem with the country’s software industry was not a question of foreign software over local software solutions. The MD said “If you have better software, people will buy and they do not care where it is coming from. If you want to sell software, the buyer does not buy the software alone, he buys the software, buys capacity to support the software, buys your capacity to improve on the software, he buys what he assumes is your mastery of the domain the software is meant for because the software must be able to compete favourably with its competitors.”

Ray of hope

A joint committee of the private and public sector are currently working to develop a fit for purpose framework for the establishment of incubation centres across the country that will foster the development of software industry, Omobola Johnson, minister of communications technology has disclosed. This framework, according to the minister “will include minimum IT infrastructure requirements, the creation of a technology innovation venture capital fund, avenues for the commissioning of bespoke software by the business community, institutional support for incubates in the form of business services and a strong mentoring framework by successful business entrepreneurs and a transparent and credible process to select incubates. We are committed to the establishment of four IT Incubation centres by the end of the third quarter of this year.”

Interestingly, National Information Technology Development Agency (NITDA) one of our implementing agencies recently signed a Memorandum of Understanding (MoU) with the Cross Rivers state government to leverage the infrastructure of Tinapa Business and Leisure resort in Calabar to build a knowledge city/IT park. It is expected that one of our incubation centres will be located in Tinapa.

Software incubation centre

Indigenous software developers in Nigeria’s burgeoning Information Communication Technology (ICT) landscape will soon be able to tap into the multi-million dollar global applications development market as progressive steps are already underway. The federal government disclosed plans to establish four software incubation centres in the country by the end of the third quarter of 2012. Johnson made this disclosure in Lagos recently while declaring open a Youth Empowerment and ICT Foundation programme sponsored by Jim Ovia Foundation. Johnson disclosed that the federal government is to invest about N1 billion to establish an ICT Incubation Centre.
“About N750 million to N1 billion will be needed to establish the incubation centre. This plan will ensure that private sectors invest their money in this IT innovation fund, in order to fund our local software entrepreneurs. We are investing in them because this local entrepreneur may not have collaterals to pay up their loans,” she said. The foundation in partnership with technology giants, Google, Microsoft, IBM, QT recently trained 350 African youths in the area of software development.

Commenting on the rationale behind setting up the ICT foundation and training programme, Jim Ovia, chairman of the foundation said if Nigerian youths are fully equipped with the appropriate training and capacity building, they will not only create software applications to be reckoned with globally but also establish IT business that can thrive and make a significant difference in terms of wealth creation and revenue generation.

The theme of the conference was ‘Developing Nigeria’s Next Generation of ICT Entrepreneurs” and would hold for five days. “Look, Google has a market capitalisation of N200 billion. “Nigeria’s foreign reserves is only N30 billion. Apple at one time made a profit of $1 billion in a week. Technology brands like Microsoft, Google, and IBM are more recognizable than the national flags of some countries that have been in existence for centuries. “This is why we need to empower our youths in the area of ICT. These firms were founded by young men in their twenties at the time. This is why we targeting our youths. There is need for us to inspire, train and engage our youths in the area of technology. We can replicate these success stories”, he added.

Johnson further noted that the training programme was in line with the ministry objective of developing relevant and up-to-date software development skills – including solution architecting and testing. These software incubation centres, according to the ICT minister will go a long way in accelerating the development of a commercial software industry by ensuring that appropriate support and funding is available to software and other IT entrepreneurs. Alluding to the establishment of a professionally managed IT innovation venture capital fund that will have the initial seed capital provided by government with contributions from private sector, Johnson also disclosed that a joint committee of the private and public sector has been instituted to swiftly develop a fit for purpose framework for the establishment of incubation centres across the country.

The launch of this fund, according to her will coincide with the rollout of incubation centres in the 3 – 4 initial pilots across the country. “This framework will include minimum IT infrastructure requirements, the creation of a technology innovation venture capital fund, avenues for the commissioning of bespoke software by the business community, institutional support for incubates in the form of business services and a strong mentoring framework by successful business entrepreneurs and a transparent and credible process to select incubates,” she opined.

The minister maintained that the move will foster the development of software industry, bearing in mind that Nigeria has lost about N18.9bn in the last five years as capital flight from importation of foreign software, according to the National Office for Technology Acquisition and Promotion (NOTAP). According to her, the draft ICT policy makes a strong case for software development.

Way forward

With regards to industry collaboration and the role of government in the development of the industry, software developers had complained that government had at no time been supportive enough either through technology biased policies like tax-breaks, tariffs/levies concession, or providing the enabling infrastructure and environment for innovation to blossom. Software practitioners have also complained about the absence of funding bodies focused essentially on technology. According to them, venture capitalist shy away from funding startups, more so technology ideas that seems complicated. There is need for strong partnership and collaboration between government and the private sector. Business entrepreneurs, state governments, unilateral bodies and even like-minded groups of youths must adopt federal government’s framework and help to establish Information Technology (IT) incubation centres in parts of the country that meet the defined criteria.

Published on BusinessDay Media, Monday 13 February, 2012.

Nigeria moves to expand software industry

2012-02-09T08:32:00.000-08:00

Ben Uzor Jr

Indigenous software developers in Nigeria’s burgeoning Information Communication Technology (ICT) landscape will soon be able to tap into the multi-million dollar global applications development market as progressive steps are already underway. The federal government has disclosed plans to establish four software incubation centres in the country by the end of the third quarter of 2012. Omobola Johnson, minister of communications technology made this disclosure in Lagos recently while declaring open a Youth Empowerment and ICT Foundation programme sponsored by Jim Ovia Foundation.

Johnson revealed that the federal government is to invest about N1 billion to establish an ICT Incubation Centre. “About N750 million to N1 billion will be needed to establish the incubation centre. “This plan will ensure that private sectors invest their money in this IT innovation fund, in order to fund our local software entrepreneurs. “We are investing in them because this local entrepreneur may not have collaterals to pay up their loans,” she said. The foundation in partnership with technology giants, Google, Microsoft, IBM, QT last week trained 350 African youths in the area of software development.

Commenting on the rationale behind setting up the ICT foundation and training programme, Jim Ovia, chairman of the foundation said if Nigerian youths are fully equipped with the appropriate training and capacity building, they will not only create software applications to be reckoned with globally but also establish IT business that can thrive and make a significant difference in terms of wealth creation and revenue generation. The theme of the conference was ‘Developing Nigeria’s Next Generation of ICT Entrepreneurs’’ and would hold for five days. “Look, Google has a market capitalisation of N200 billion.

“Nigeria’s foreign reserves is only N30 billion. Apple at one time made a profit of $1 billion in a week. Technology brands like Microsoft, Google, and IBM are more recognizable than the national flags of some countries that have been in existence for centuries. This is why we need to empower our youths in the area of ICT. These firms were founded by young men in their twenties at the time. This is why we targeting our youths. “There is need for us to inspire, train and engage our youths in the area of technology. We can replicate these success stories”, he added.

Johnson further noted that the training programme was in line with the ministry objective of developing relevant and up-to-date software development skills – including solution architecting and testing. These software incubation centres, according to the ICT minister will go along way in accelerating the development of a commercial software industry by ensuring that appropriate support and funding is available to software and other IT entrepreneurs.

Alluding to the establishment of a professionally managed IT innovation venture capital fund that will have the initial seed capital provided by government with contributions from private sector, Johnson also disclosed that a joint committee of the private and public sector has been instituted to swiftly develop a fit for purpose framework for the establishment of incubation centres across the country.

The launch of this fund, according to her will coincide with the rollout of incubation centres in the 3 – 4 initial pilots across the country. “This framework will include minimum IT infrastructure requirements, the creation of a technology innovation venture capital fund, avenues for the commissioning of bespoke software by the business community, institutional support for incubates in the form of business services and a strong mentoring framework by successful business entrepreneurs and a transparent and credible process to select incubates”, she added.
She said the move will foster the development of software industry, bearing in mind that Nigeria has lost about N18.9bn in the last five years as capital flight from importation of foreign software, according to the National Office for Technology Acquisition and Promotion (NOTAP). According to her, the draft ICT policy makes a strong case for software development.

With regards to industry collaboration and the role of government in the development of the industry, according to her, software developers had complained that government had at no time been supportive enough either through technology biased policies like tax-breaks, tariffs/levies concession, or providing the enabling infrastructure and environment for innovation to blossom. Software practitioners have also complained about the absence of funding bodies focused essentially on technology. According to them, venture capitalist shy away from funding start-ups, more so technology ideas that seems complicated.

“We in the Ministry understand these issues well and there is clarity about the role that government can and should play. Let me mention briefly what the Ministry is doing to ensure that we build a software industry. As I mention these initiatives it is important that I state categorically that everything is being done in strong partnership and collaboration with the private sector and industry stakeholders. We hope that business entrepreneurs, state governments, unilateral bodies and even like minded groups of youths will adopt this framework and help to establish Information Technology (IT) incubation centres in parts of the country that meet the defined criteria”, she posited.

Published on Business Day, Tuesday 07 February 2012

NCC moves to revive fixed line sub-sector, to issue new licences in 2013

2012-02-09T08:19:00.000-08:00

Ben Uzor Jr

Efforts by the Nigerian Communications Commission (NCC) to revive the ailing fixed line segment of Nigeria’s highly competitive telecommunications market are headed in the right direction, industry watchers say. Over 1.9 million fixed lines have become inactive according to 2011 reports. The NCC’s subscriber data shows that there are 2.7 million fixed wired/wireless telephone lines in the country out of which the 1.9 million are not in use. The NCC data also reveals that the total connected fixed wired/wireless lines were 2.7 million as at November 2010 but the number dropped to 2.2 million in October 2011. The regulatory agency says that actualisation of its broadband strategy and the issuance of additional fixed-line telephone licenses next year, will assist in resuscitating the fixed line segment.

In terms of its broadband strategy, the telecoms regulator had decided to explore an open access model for effective deployment of a national fibre network which will ensure an even platform and level playing field for retail service providers. Analysts say that NCC’s broadband strategy will open the 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.

Though telecoms operators are investing huge financial resources in laying national, metro backbone networks, roll out is slow- paced and controlled in a proprietary nature, unlike an open access infrastructure, where anybody can connect at a uniformly low price. “The licenses will be issued to revive the fixed-line telecommunication services that have been comatose and will benefit our broadband initiative. “Broadband internet is mainly deployed through fixed telephony and it is part of our broadband project to ensure that as we are empowering the private sector, providing incentive to the private sector to create broadband centres in Nigeria, this will go in hand with the restoration of fixed telephony to complement the mobile networks that we have”, Eugene Juwah, executive vice chairman, NCC, disclosed this in an interview.

Lanre Ajayi, past president, Nigerian Internet Group (NIG) said in an interview with Business Day, “For me, it is a move in the right direction. The most important role of the telecoms regulator is to engender competition. It is appropriate to encourage more operators in the fixed line segment because more operators will foster competition in the segment and consequently lower the cost of services. More operators in the fixed-line space will also mean faster deployment of requisite infrastructure which will in turn deepen broadband penetration in the country. Finally, it will improve quality of service.”

“I am not aware of this development. But, it is important that we do whatever is necessary to ensure that broadband services get to the nooks and crannies of the country. If the NCC does issue additional licenses in the fixed line segment, it would be one step in promoting universal access. Adewale Jones, vice president, Association of Telecommunications Companies of Nigeria (ATCON), posited. These are not the best times for fixed telephony in the country, as over 1.9 million lines have become inactive. The NCC’s subscriber data shows that there are 2.7 million fixed wired/wireless telephone lines in the country out of which the 1.9 million are not in use.

The NCC data also reveals that the total connected fixed wired/wireless lines were 2.7 million as at November 2010 but the number dropped to 2.2 million in October 2011. This, according to the data, means that over 500,000 connected fixed lines had been totally disconnected within 11 months ended October 2011.Similarly, the number of active fixed telephone lines, which stood at 1.1 million in November 2010, had cascaded to 801,297 in October 2011.A brief look at the figures, reveals that 300,000 out of the 1.1 million active fixed telephone lines as at November 2010 went inactive in 2011.

Nigeria, according to analysts, missed a great opportunity due to the Nigerian Telecommunications Limited (NITEL’s) inability to massively deploy fixed lines when other development-focused nations of the world, such as the United States (US) and United Kingdom (UK) did. Whilst it is true that the mobile phone has attained high penetration and usage, for many homes, businesses and companies, according to analysts, there exist, a yawning need for basic fixed line access, with its numerous advantages. By year 2000, NITEL could only put in 400,000 connected telephone lines and 25,000 analogue mobile lines.

The total teledensity stood at a paltry 0.4 lines per 100 inhabitants. By the end of 2011, according to statistics from the NCC, Nigeria has attained over 90 million lines .The NCC is however conscious of the importance of fixed lines infrastructure in broadband deployment. This, according to analysts explains why the Juwah led administration is looking to revive the segment by providing the enabling environment for private investors to expand the country’s broadband infrastructure. Statistics show that fixed-line telephone users make up less than 1 percent of Nigeria’s total subscriber base. Tremendous opportunity exists there, for growth in broadband communication as demand for data services grows.

Jones had predicted that fixed telephone lines might be extinct if they continued to decrease at the current rate. “The disconnection of fixed lines is increasing in the country and if the trend continues, we may end up not having fixed lines again in the next few years. “We need to draw the attention of the Universal Service Provision Fund to this development. We should not abandon fixed lines. It is a warning sign. USPF needs to look at those figures and do something. “This is not the fault of the public per se; it is the government through the USPF that should be pushing for the sustenance of fixed telephony”.

Published on Business Day, tuesday 07 february 2012.

Ministries, agencies to migrate to .ng domain

2012-01-24T08:17:00.000-08:00

Ben Uzor Jr

The federal government has disclosed that it is set to ensure complete migration by all its ministries, departments and agencies (MDAs) from their existing domain names to Nigeria's Code Top Level domain name, .ng, both for their websites and official emails. This is in an attempt to improve efficiency in governance by bringing all activities of its agencies and parastatals to a single platform. Omobola Johnson, minister of communications technology made disclosure in Lagos recently.

She said the decision was part of the current measures by the government to bring all Information Technology (IT)-based activities of the MDAs to a single platform thereby engendering a connected government that allows for sharing of facilities and information among government's parastatals. According to the minister, the ministry would use the medium to accomplish the dream of achieving true e-government in the country. “Another thing we are looking at is ICT in government.

“I can't stand here and preach to you about the importance of IT development in the industry without telling you about what we are doing in government about using ICT as a means of transparently administering governance and engaging the citizenry,” she said. Johnson further revealed that the ministry was already working assiduously with Galaxy Backbone Limited, an agency under the ministry to ensure a connected government, where information can be shared efficiently and effectively.

“As I speak today, we are putting in place a message and collaboration system to facilitate a connected government. All MDAs will be on .gov.ng. From next year when you get an email from a government official, it will be a .com.ng address. I have already started using mine," she said. According to the ICT minister, e-government is a major area that the ministry was currently focusing on in its effort to make sure that government engages the people in meaningful ventures.

She said Nigeria has a very ambitious e-government programme but hoped that the ministry would launch one of the biggest call centres in Nigeria before the end of 2012, which would basically be used as a basis of engaging government and its citizens. “We had a stakeholders' forum in September, 2011 and we will have another shortly after the new ICT policy that we just posted on our website. We have set ambitious targets for ourselves. Those targets are tangible. We have talked about increasing ICT contribution to Gross Domestic Product. “Today, we have ICT contributing 3.5 per cent although in the last publication of National Bureau of Statistics, it had gone up to 4 per cent.

“What we want to do is achieve at least 2 per cent increase in ICT contribution to GDP by 2015," she added. The target according to her is to boost mobile penetration, covering the whole of this country with voice penetration, even with 90 million subscriber base. Also, the minister said government expected to move from about 58 per cent penetration to 80 per cent mobile penetration. She said although Nigeria currently has about 33 million internet users, some are occasional users.

“By making our broadband infrastructure more ubiquitous and more robust, we believe we can increase the number of internet users to 70 million. It will create an opportunity to provide jobs for our young people very quickly. It will create an opportunity to provide services to both the local industries and offshore industries as well.” She noted that Nigeria was ripe and well positioned to create a domestic call center industry, noting that call centre was one of the initiatives the ministry's was looking at as a means of job creation.

First published on Business Day, Tuesday 24 January, 2012

Cashless Economy - UBA to deploy 25, 000 PoS terminals in Lagos

2012-01-24T08:13:00.000-08:00

• Conducts 1 million ATM transaction during strike action
Ben Uzor Jr

As Nigeria gradually moves from cash-based to electronic based transactions by virtue of Central Bank of Nigeria’s (CBN) cash-lite policy, United Bank of Africa (UBA) Plc which currently has 700 branches across the country has disclosed plans to deploy 25, 000 of Point of Sale (PoS) terminals in Lagos by December 2012. Luqman Balogun, group director, E-banking, UBA who made this revelation at a media parley in Lagos recently, said the bank was fully equipped to support CBN’s financial inclusion strategy.

According to Balogun, the recent nationwide strike by the Nigerian Labour Congress (NLC) to protest the removal of fuel subsidy was a lucid indication of the banks preparedness to implement CBN’s cashless drive. “We had a massive surge in the number of people who used our electronic channels during the nationwide strike action. Our ATMs, PoS terminals were up and running during the strike. We had a lot of customers who for the first time used our internet banking platform to conduct financial transactions.

“We recorded 1 million transactions on our ATMs during the strike. UBA currently does 5 million transactions on the ATMs monthly. We were able to keep out ATMs up and running. We even had an alert system in place to notify us when cash runs out at any ATM location. Our ATMs were also supporting cardless withdrawals where money can be sent to anyone. A recipient can walk up to a UBA ATM, access the cardless transaction, supply the access code and the ATM dispenses the cash.

“It was a test for us to see how effective our e-channels were and we came out tops.” Balogun, who allayed fears of increased internet fraud entertained by Nigerians as they migrate to the cashless mode, said that risk and security measures have been greatly improved on to address fraud. He expressed confidence in CBN’s cashless policy, adding it provides ample opportunity for banks to improve the performance of their service delivery infrastructure. More basically, according to him, e-channels would indeed deepen the customer base of banks by essentially taking financial services to the grassroots.

The UBA director noted that the CBN’s cash-lite would drive the usage of payment cards will significantly grow. He believes that cards will largely drive the attainment of the goals of cash-lite given their popularity and wide spread acceptance. “UBA issues 2.2 million Visa Cards out of the total 8.5 million cards in the country. We control 20 percent of the market. We are also planning to commence issuance of MasterCard’s to give our customers more options. All UBA cards are EMV cards with chip and PIN.”

He also pointed out that UBA was playing a dominant role in the internet banking space with U-Direct; a solution providing all account holders to their accounts. According to him, UBA has close to 600,000 subscribers with the adoption rate growing on a daily basis. “U-Direct is a secure web-based solution and gives users the freedom to access their account from anywhere. With U-Direct, customers are able to conduct most transactions available within UBA branches but without having to visit the branch.

“For UBA, we see opportunities because we want to provide solutions. What motivate us from an e-banking perspective are convenience, safety and security. Those are the watch word for us”. The above, the bank intends to achieve as customers and corporates embrace its self-service electronic banking channels namely: UMobile, PayManager, Consolidated Internet Payment Gateway (CIPG), U-Pay Connect, BankCollect. PayManager is UBA’s web-based electronic payment solution.

It is a web-based payment solution that enables e-payment to any third party (suppliers/vendors, customers, government, etc) locally and globally. With PayManager, customers can make payment from their account into accounts with any bank in the world. It also supports foreign currency payments and international transfer. On the other hand, BankCollect is a multi-channel is a web-based solution which enables collection or payment on behalf of government or corporate customers.

Payments such as Airline ticket payments, insurance premiums, subscription payments, utility bills, according to Balogun can all be managed on the solution. CIPG is UBA’s Internet Payment Gateway developed strategically to enable online payments on merchants’ websites. The web solution provides the simplest and quickest method of integrating e-commerce websites to a secure payment gateway for the purpose of receiving payments for goods and services. CIPG presents a combination of local and international payment options to merchant customers on a unified web interface.

First published on Business Day, Tuesday 24 January, 2012

FG lobbies ITU for additional telecoms spectrum

2012-01-24T08:08:00.000-08:00

Ben Uzor Jr

The federal government is said to be engaging in intense lobbying for additional spectrum from the International Telecommunications Union (ITU) to enable telecommunication operators in the country provide innovative and reasonably priced broadband services to Nigerians. Bashir Gwandu, executive commissioner, technical services, Nigerian Communications Commission (NCC), made this revelation in an interview at the Radiocommunication Assembly conference 2012 held in Geneva.

Telecoms operators had earlier expressed concern that majority of the Nigeria’s population especially those who dwell in the rural communities will be denied access to telecoms services due to spectrum unavailability. Available statistics reveal that 40 million Nigerians living in about 850 villages across the country do not have access to basic telecoms services. An analyst told Business Day yesterday that Nigeria’s digital divide is still wide even with Nigeria’s 90 million active subscribers.

According to him, Nigeria needs additional spectrum which could be used by mobile operators to deploy high capacity mobile voice and data services, noting that there was not sufficient spectrum available for the regulator which explains why Nigeria was going to ITU to push for more frequency spectrum resource. “In other parts of the world, there is huge ground infrastructure. In Africa, we rely on wireless. We also have affordability issues which entails capacity to pay for deployment of wireline services.

“The alternative we have is to deploy wireless services. For wireless services, one of the fundamental challenges we have is the amount of spectrum needed to provide the service. Frequency spectrum is very limited resources and we have shortage of it. We have to look for cheaper alternative which involves allocating additional spectrum. Unfortunately, we do not have spectrum that is why we have come to the ITU to ask for more allocation of spectrum that would help us bridge the digital divide.

“So, we have put in a paper calling for more studies. We have put in a draft proposal for additional allocation of spectrum; all of these are skewed towards achieving the objective of getting additional spectrum. On the much anticipated global switch over from analogue to digital broadcasting, Gwandu said much is yet to be done in Nigeria.“Some states have already digitized their transmission, others have not. Digitisation should have been done prior to 2010 but every country has its own challenges.

“Some of the challenges we have are issues revolving around getting the right policy in place to ensure that digitisation takes place. It is very important for us to digitise as soon as possible. Presently, it is difficult to get spectrum licenses for telecoms services. Meanwhile, we have spectrum that is currently not efficiently utilised by analogue TV systems. It has become paramount for us to quickly move towards digital services so that we can free up spectrum for IMT and equally more efficient broadcast services.”

Only recently, the NCC commissioner had reiterated the need for the federal government to request for more spectrum allocation on the 700MHz, which is a befitting spectrum being used for analogue TV. “We said let's digitise our television so that we can have the spectra for telephony services and we are pushing for spectra 690-790 MHz. “At the last conference of ITU (World Radio Conference), we said Africans haven't got Digital Dividend because we have already licensed CDMAs, what is left for us is just 790-806MHz which is 16MHz, which is not going to take us anywhere.

“We said let's extend it to 698MHz that would last for three major operators or an existing operator can buy part of the spectrum and expand their network and still accommodate more people and have better quality service and indeed accommodate the data growth that will come overtime. “This is what we are pushing for at ITU, we are leading Africa in this fight for the next WRC next year and we are going to tell ITU that we want it now, we can't wait any more, the whole of Africa wants it as soon as possible.”

First published on Business Day, Tuesday 24 January, 2012.

More broadband infrastructure, less Internet accessibility hurdles

2011-12-05T12:15:00.000-08:00

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

2011-12-05T04:56:00.000-08:00

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.

2011-11-30T06:22:00.001-08:00

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

2011-11-30T06:17:00.000-08:00

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

2011-11-17T08:56:00.000-08:00

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

2011-11-17T08:53:00.000-08:00

• 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

2011-10-25T12:30:00.000-07:00

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

2011-10-24T10:03:00.000-07:00

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

2011-10-06T05:20:00.000-07:00

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

2011-09-20T10:07:00.000-07:00

•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

2011-09-20T09:58:00.000-07:00

•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

2011-09-02T03:22:00.000-07:00

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

2011-08-11T07:37:00.001-07:00

•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

2011-08-09T10:30:00.000-07:00

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

2011-08-09T10:21:00.000-07:00

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

2011-08-09T10:14:00.000-07:00

• 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

2011-07-29T10:35:00.000-07:00

. . . 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

2011-07-28T12:14:00.000-07:00

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.

Telkom loses N157 billion in failed Multi-Link’s venture

2011-07-26T01:45:00.000-07:00

Ben Uzor, with agency reports

More facts have emerged on why Telkom South Africa failed in Nigeria’s highly competitive telecommunications market. Roy Padayachie, minister of communication, South Africa disclosed, yesterday that Telkom did not succeed in Nigeria due to its acquisition of a Code Division Multiple Access (CDMA) operator in an industry dominated by the lower cost Global System Mobile (GSM) technology. He further revealed that Telkom’s failed Multi-Link transaction in Nigeria has cost the firm over N157 billion (R7 billion).

Padayachie was responding to a written parliamentary question by the Democratic Alliance’s Niekie van den Berg, who wanted to know the reasons for Telkom’s failed efforts to gain ground in the Nigerian telecoms market. Still on the reasons for Multilinks poor performance, the minister added that the rapid expansion of the network that had to be implemented could not be supported by the underdeveloped distribution channels, thus affecting sales revenue.

According to him, “Some contracts were entered into which did not deliver the anticipated benefits and incurred significant operating expenses. The worldwide economic troubles also affected the Nigerian economy. Multi-Link did not have sufficient market share, pricing power or strategic and operational advantages to be successful in the resulting tight economic environment.” Telkom’s Multi-Links unit suffered an operating loss of R522 million for the financial year ended March 31, 2009, and R1.039 million for the year ended March 31, 2010.

“In addition Telkom has been required to write down goodwill and assets of R5.823 million,” Padayachie said. Replying to another question — by Juli Killian of the Congress of the People — he said as one of several shareholders in Telkom, the government raised its dismay at the write-off of “approximately R5.2 billion in the Nigerian operation at the Telkom AGM in 2010. “Telkom underestimated the highly competitive nature of the Nigerian telecoms market and also failed to build and manage appropriate distribution channels,” he said.

These, indeed, are not the best of times for CDMAs - also known as Private Telephone Operators (PTOs), as a significant number of them are finding it extremely difficult to survive the stiff competition in the nation’s telecommunications industry. Analysts who spoke with BusinessDay said low capitalisation, poor promotion of CDMA technology, subscribers’ preference for GSM telephony, and corporate governance issues have seen the fortunes of these CDMA operators dwindle over time.”The greatest problem confronting CDMA companies in Nigeria is funding. They are not as highly capitalised as GSM operators. So, they do not have the same level of coverage or reach.

“Also, the ease to change from one network to the other gives GSM operators an edge, whereas CDMA operators have to buy handsets and subsidise them. This adds to their costs of operation. If a handset is faulty, GSM subscribers can easily buy another handset and simply transfer their SIM card, but for CDMA, it is not like that. And most times, the subscribers have to buy another handset and reprogramme their old numbers. That is one of the reasons why CDMA is not really growing,” Oladipupo Alabi, a telecoms engineer, told BusinessDay. Gbenga Adebayo, president, Association of Licensed Telecommunications Operators of Nigeria (ALTON) has, meanwhile, advised the Federal Government to find ways of supporting ailing CDMAs, adding that a bailout from government could enable them expand their network, strengthen existing product offerings and roll out innovative services. “This is not necessarily talking about consolidation, but some kind of relief that can be granted to them to deploy infrastructure better. This is like a bailout from government”, he said.

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Nigeria may become largest mobile payment market in Africa – experts say

2011-07-26T01:34:00.000-07:00

Ben Uzor Jr

Nigeria may indeed be positioning herself to become the largest mobile payment market in sub-Saharan Africa, analysts said at the weekend. According to the analysts, there are only 22 million individuals who have a bank account out of the 150 million people but there exists about 90 million mobile phone users, which provide huge opportunity for the development of mobile payment.

M-payment through mobile phones, however has been identified as a viable tool to provide basic financial services to millions of unbanked populations in urban and rural communities in Nigeria, and will become a booming industry. Analysts say that Nigeria was gradually moving towards the era of mobile payment system as operators and the regulator make every effort to sustain the shift from card-based transaction to mobile-based transaction.

Emmanuel Okogwale, principal consultant, Mobile Money Africa told BusinessDay at the weekend that mobile payment market looks interesting and will thrive to become the largest market in Africa depending on the collaborative efforts of the stakeholders. “I see strong internal migration driving mobile remittances, strong compelling services like agency banking for the underserved communities.

“Depending on the numbers of final licensees in Nigeria, the market looks promising for potential players. The stakeholders should endeavor to build a shared agent network to serve all the stakeholders. Since agency is the heart of mobile financial services and the agents do not sell primary products of the licensee unlike in MNO driven ecosystem.

There is a need to source, develop, train and deployed agents on a shared basis. Only recently, the Central Bank of Nigeria (CBN) issued additional seven approvals in principle (AiP) to prospective mobile payment service providers in the country. The issuance of the seven new AiPs takes the number of approvals to 23. Some of the companies included in the latest bazaar are Zenith Bank, MoneyBoxAfrica and Zinternet. The names of the other companies were not available at press time yesterday.

There are speculations that VTN and Hendomark made the list. Meanwhile, an informed source close to MTN told Business Day at the weekend that the telecom company’s would match the achievement of M-PESA service, offered by Kenyan telecoms operator Safaricom. With about 14 million users representing 81 percent of Safaricom’s customer base in Kenya – M-PESA is described by the GSM Association, a global body representing the interests of mobile operators, as the world’s most successful m-payment service.

According to our source, the telecom firm intends to apply lessons learnt in markets where it has rolled out the service such as Uganda to succeed in Nigeria. In Uganda for instance, after one year of rollout, MTN’s payment service exceeded that of M-PESA at the same stage. A key factor in the Ugandan success is marketing through 2500 representative.

Our source said that MTN strongly believes direct contact and educating telecoms subscribers are critical to growing the mobile payment service. Also important is easy access to cash remitted to users, or enabling them to convert cash into e-money which was achieved in Uganda through agents such as village shop owners, the source further disclosed.

Tayo Oviosu, CEO, Pagatech, an electronic financial services firm and one of the firms given the approval in principle by the Central Bank, said given the poor number of Nigerians, mobile payment and banking takes advantage of the wider coverage by mobile phones.

“There are very few people that have formal access to financial services, only about 20 per cent of Nigerians have access to formal financial services and 90 per cent of the bank accounts have less than N5000 in their accounts. This shows that majority of the money in Nigeria is outside the banking industry and this poses a very real challenge to banks today. They open bank branches everywhere, yet the issue remains unaddressed”.

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New Evidence Act paves way for electronic evidence in courts

2011-07-26T01:16:00.000-07:00

• CFIN lauds Jonathan
Ben Uzor Jr

Computer Forensics Institute, Nigeria (CFIN), the government-approved body for the training and certification of digital forensics experts in Nigeria, has commended President Goodluck Jonathan for the swift way his administration signed into law the new Evidence Act that has now paved the way for the admissibility of computer and electronic generated evidences in Nigerian courts.

Peter Olu Olayiwola, president/chairman of the body in a press statement, at the weekend, congratulated Nigerians on this noble feat achieved in the early stage of the President Goodluck Jonathan’s administration heaving a sigh of relief that at last digital and computer forensic evidence is now admissible in the courts of our land.

He said with this development there’s hope for this country even as he expressed the gratitude of CFIN to all those in the forefront of fighting for the realisation of the new Evidence Act. The body was exceptionally grateful to Senator Sola Akinyede and his committee and the National Assembly for working tirelessly to push through the amendment of the 68-year-old Act.

Olayiwola explained the role of CFIN to nation building and said his institute works in the area of national security by assisting the federal and states law enforcement agencies, and other agencies of government that have to do with security in the area of capacity building by developing the capabilities in the identified staff that man certain critical areas in their various organizations.

While introducing computer forensics as the science of detection and investigation of crime committed either using the computer or on the computer network, internet and other digital devices with the intent of giving digital evidence in litigation, Olayiwola said computer forensics can be used to detect and gather evidence that will lead to the prosecution of the culprit. According to him, over 75 percent of all criminal cases have one form of digital or electronic evidence or the other.

Further, he said there is no country in the world that is absolutely crime free but that what advanced and forward looking nations have done was to use technology to ameliorate and investigate forensically any time a crime was committed to be able to bring the perpetrators to book.

Olayiwola therefore said with the amendment of the Evidence Act that the coast was now clear for the full practice of computer forensics in Nigeria assuring that Nigeria will witness a new era in her legal and judicial system. According to him, Nigerians can now make full use of the expertise of certified digital and computer forensics examiners as expert witnesses in their court cases as is the case in countries with the same type of Nigeria’s new Evidence Act.

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MainOne has scaled hurdle of availability and affordability in broadband market- Oladepo

2011-07-18T10:06:00.000-07:00

Kazeem Oladepo, general counsel for Main One Cable Company, a wholesale bandwidth provider in this interview with Ben Uzor Jr draws out strategies to address Nigeria’s last mile challenge. He talks about the need to develop a national broadband policy that would focus on the demand and supply side of internet services, spanning both regulatory and economic intervention plan by government.

Question 1:
What’s your assessment of Nigeria’s telecommunications market in terms of regulatory framework and business environment?

The numbers (statistics) we see support the premise that the industry has grown enormously in the last decade or so, when viewed from where this market was at that time and where it is now. At 65 percent or so tele-density and 90 million active (by NCC’s criteria and records) subscribers, there is a clear indication of phenomenal growth and advancement in the industry. Not that there are no shortcomings in the current framework, but telephony is no longer a luxury item for everyday people in Nigeria, and that’s a quantum leap from where we used to be, which must be acknowledged with glee.

Government should be commended for providing the framework for market liberalization i.e. legislative consistency incorporated in the Communications Act and other subsidiary regulations, and heralding the emergence of a truly quasi-independent regulator that was able to instill confidence in investors and helped to bring the much needed FDIs into the country to develop the industry. The regulator deserves enormous credit for nurturing the growth and sustaining it through the different phases of evolution so far, whilst the entrepreneurs who took the initiatives and the risk to invest in the Nigerian telecoms market when the fear of uncertainties were still lurking deserve loads of credit for their tenacity.

Overall, there is a general feeling in the industry that the regulatory framework revolving around the Policy, the Act and the NCC, as well as industry participation has been instrumental to an impressive run of sector growth so far. The question is whether this framework is properly poised to support future advancements, or there is a need for it to be recalibrated to meet emerging industry trends both and today’s Information Communication Technology (ICT) challenges facing Nigeria. I believe the answer to that will be yes, we need a revamp. On the business environment, I believe this is more matured today and will continue to get more sophisticated as the market evolves. It would need to be supported by an appropriate framework that we are talking about to bring home the expected market dividends.

Question 2:
The CDMA segment of Nigeria’s highly competitive telecommunications market has continued to show signs of distress. Experts have called on the federal government to provide a bailout to aid their recovery. What’s your take on this? From a regulatory standpoint, how can the NCC assist ailing CDMA operators?

Advocating bail out, whatever that means, for the CDMA operators without doing a root cause analysis of their predicament is conveniently missing out on the real issues. We all know that businesses fail to meet performance objectives for diverse reasons, which could be from management of the business itself to other market externalities, including the regulatory environment or general business environment itself in terms of product/services and simple factors of demand and supply.

In the case of the CDMA operators, the technology is also an issue for consideration and whether or not this conveys a market advantage or is a major cost and service innovation disadvantage is an important point to consider. Generally, and quite ironically, I believe the current unrest in the CDMA segment began with the Unified Access Service License initiative, which in itself was a well-conceived service liberalization effort by the NCC, in that it removed the exclusive mobility service status conferred on the GSM operators and created a one-stop shop license for operators who are able to procure the license and removed barriers to compete if you had the scale and deep pocket.

It was meant to create a level play-ground. I doubt that the framework actually considered the fact that the play-ground was heavily lopsided in favor of early entrants in the mobility market to understand that the impact on competition was not going to be addressed by simple change in the licensing regime. Let us put it this way: you have 50 acres of farm land to farm, then you give “Farmer A” 5 acres. 2 years later, you withdraw the land and give 45 acres of it to “Farmer B” exclusively for 5 years, after which you now give “Farmer A” the right to farm in any part of the 50 acres where he can find a foothold.

Do you think Farmer A, without clear and precise guidelines being implemented to grant and protect his access would thrive as a business in that environment? I bet the answer is no. Some of the CDMA operators, i.e. Multi-Links, were successful businesses when they were smaller and focused on corporate/enterprise fixed line business, where they had a niche. Starcomms was a leading Data solution provider. The moment these guys went after the retail mobile business, they took a hit trying to play along-side the deep pocket GSM operators who were more entrenched in the market and had gained critical mass.

The existing framework either didn’t factor adequate competition mechanism to protect late market entrant from incumbents’ whims, or found it tedious to enforce the bit of market rules that where available and could have offered protection to the new and smaller guys. For instance, it is interesting that there was no asymmetric interconnection termination rate in this market until 3 years after full license liberalization (2009) and there are still no effective competition mechanism and policy incentive addressing the specific fate of these smaller operators, without which they will not be able to contribute to the overall competitiveness of the market.

Question 3:
Even with proliferation of submarine cable systems, Nigerians especially those in the hinterland will not have access to efficient and affordable broadband services due to the absence of last mile connectivity. How has this impacted Main One’s operation in terms of service availability and cost?

The advent of the Main One Cable system signifies an increased availability of 2 Tbps, more wholesale international connectivity capacity on the shores of Nigeria, available for deployment and proliferation of high speed broadband internet access to the Nigerian consumer and improved local and international connectivity services, including voice and video services. It also meant cheaper bandwidth options, priced at 80 percent less than the cost of capacity prior to the Main One cable, and improved service efficiency with 100 percent service uptime in our services from inception in July 2010 till date.

What we have done is scale the hurdle of availability and affordability for the market. Now, how do we resolve consumer accessibility? Delivering broadband services in Nigerian has its peculiar challenges in the wake of high cost of deploying access infrastructures and the high prices of leasing or sharing such infrastructure from other operators, in the few instances that they are willing to share. The feeling in the past was that there were limited last mile solutions on ground, wired and wireless, trailing the failures of the incumbent (NITEL).

Today, however, there are considerable fibre optic and wireless infrastructures all over the place connecting cities, build out by the incumbent mobile operators and other providers of national long distance backbone services, which can be used to implement the first phase of capacity delivery into these cities for further metro delivery through other existing network and new last mile and access build-outs. The cost of these access infrastructure, for instance for leased lines between Lagos and Abuja, or even between Victoria Island and Ikeja in Lagos, are in most cases twice as more expensive than the cost of capacity between Nigeria and London on the Main One cable system.

Consequently, there is great disincentive for penetration of services in not only the hinter land, but locations even within Lagos, whilst those that are lucky to have it are neither fully enjoying the impact of the crash in prices that Main One cable and others such as the Glo 1 cable have brought into the market, nor the improved service uptime. It is also part of the explanation for lower international call rate compared to local call rates in Nigeria.

Question 4:
What do you think the Regulator and service providers such as Main One could do to address the challenge of last mile connectivity?

I believe the way to go is infrastructure sharing supported by strong access regulation that not only mandate clearly the sharing of access and distribution infrastructures, but also regulates prices of these facilities, including wholesale leased lines services, to encourage cost based incentive for further build, whilst at the same time nurturing competition and service penetration. We currently have an infrastructure sharing Guideline, which I believe is not particularly clear on the inclusion of infrastructures such as leased lines in the list of network facilities to be shared, even though these are already being transacted between operators in the industry, albeit at discriminatory rates.

The guideline does not prescribe or regulate the pricing of access and infrastructure sharing, more or less leaving it to commercial negotiation between the contracting parties. It is hard to imagine in such asymmetric relationship, where one party is a dominant network operators with every incentive to be protective of its market and create barriers to entry, that the negotiation will be fair and rate not discriminatory as is currently manifest in the current cost of these services today.

Conversely, the fear might be that since we have not attained optimum level of proliferation of infrastructure, wouldn’t regulating price discourage further investment and stifle future build. In reality, sharing and cost based, transparent and non-discriminatory pricing of access and distribution infrastructure will immediately improve service penetration in broadband deployment, create new market opportunities through improved services, and thus competition, which will drive further investment in new infrastructures by the initial sharing operators.

As a matter of fact, it will bring more efficient infrastructure build into the industry given that today’s intercity backbone build, for example, are largely needless duplication of resources where each operator is lining up on the same route to build capacity that is in each case sufficient to meet their respective requirement and those of others. It’s a palpable development that highlights our penchant for proprietary interest at all time, which unfortunately adds to the prices that consumer pays for services ultimately. The NCC needs to urgently wade into these issues to save the industry and consumers alike, through a cost study, price determination and mandatory access regulation for leased lines and other wholesale capacity services and effective enforcement modalities.

Question 5:
At various fora, Main One Cable Company has continued to clamour for the development of a national broadband policy. As an expert, what key areas should form the thrust of this policy and how can the policy help improve internet penetration?

I think the best place to begin is changing the perception towards broadband services. Contrary to widely-held belief in this part, broadband is not mere access to fast internet services for on-line entertainment on sites such as youtube or for social networking. It is a quintessential utility service that has the same level of socio-economic importance as electricity or any other social amenities. It not only benefit consumers as a service medium, it allows them to innovate, thereby powering a vibrant reproductive cycle of services and enhanced productivity that cuts across all facets of socio-economic activities in any community where there is ample access to broadband services. It drives productivity and efficiency in public and private sector activities and will impact economic growth positively. This is why, even in countries where one would ordinarily assume high level of internet proliferation, such as the United States, it remains one of the key thrust of government policies as recently as 2010 taking its position as an all-important public utility services, since these countries have come to the realization that market forces and private sector led initiatives will not meet government’s objective in this direction.

Government and policy makers in Nigeria need to take a cue from these more advance markets and develop a national broadband policy, whether as part of the on-going review of the national telecommunications policy or on a stand-alone basis, if Nigeria is to meet the MDG and Vision 2020 objectives, which fate will hang on the level of ICT development in the country going forward.

In terms of thrust of the policy, the focus should be on the demand and supply side of broadband services and should span both regulatory and economic intervention plan by government. The policy should address current regulatory challenges to local access infrastructure build by services providers and efficient utilization of existing infrastructure for common benefit and overall consumer benefit.

It should key in on government funding of access and broadband distribution infrastructure build nationwide through a special national broadband infrastructure development fund, or whatever name it may be called, that will appraise requirements and support operators with viable plans that have also shown historical ability for execution. In fact, government may, with the collaboration of the providers, build a national backbone infrastructure that can be leased to operators on a maintenance cost basis solely. The policy should also incorporate initiatives that will support broadband usage which should include digitalization of public services, promotion of local content and supporting innovation in broadband service usage through fiscal incentive amongst other consumer stimuli.

Question 6:
What is Main One doing to ensure that issues hindering broadband penetration in Nigeria are addressed by the government and other stakeholders?

As you rightly acknowledged, our approach is first to create awareness for the immense opportunities that Nigeria stand to miss out on in the global ICT trajectory if we fail to harness our resource through clear policy direction and implementation. This is why we continue to accentuate this issue at every forum where we have had the opportunity to dwell on it. We also have an elaborate plan to engage, and keep engaging, the NCC, as our industry regulator, the government and other stakeholders on these issues with a view to getting their buy-in on dealing with the challenges that the industry faces in delivering on governments ICT growth objective and how government can be persuaded for more direct policy intervention and economic support.

We know that the NCC is keenly interested in this process as a new service frontier for the industry and will support any initiative that enhances value for consumers. We continue to work with our customers and operator-partners to grow the current level of penetration through dynamic initiatives and partnership that has till date helped to deliver broadband services distribution infrastructure on trade-off basis, which has also helped to improve service penetration to other parts of the country outside Lagos.

Question 7:
Still on the policy side, industry watchers say that a converged media and telecom regulator is needed to support the telecommunications industry in delivering innovative services to Nigerians. Do you share this opinion?

Regulatory convergence has its big hit to the extent that it creates efficient ICT resource management through harmonized processes and should also save cost in industry regulation. The UK, for example, has adopted that model with the emergence of the Office of Communications (OFCOM) and I believe the FCC in the United States has responsibility for both broadcast and telecommunications. Having separate regulatory bodies for broadcast and communications, that is the NBC and NCC, certainly doesn’t optimize benefit for the industry in a world where the line between broadcast and regular telephony service is fast disappearing.

Strangely, converged services in Nigeria continue to evolve gradually, without the regulators being merged, since technology most time is regulation neutral and always ahead of regulation in any case. It may however not be sustained if we fail to get into that space on time. One of the biggest concerns that has been expressed for instance by operators on broadband service penetration is the release of 2.5Ghz spectrum, which is already in the pocket of the NBC, to telecommunications operators for WiMAX services. This, I suppose, would not occur if we had a unified regulator in Nigeria. We may never be able to take full benefit of the so called digital dividends if we continue to run parallel regulators for the telecommunications and broadcast industries.

Question 8:
Experts say that Nigeria’s poor management of national spectrum resources has hindered foreign direct investment into the telecom industry and slowed down the roll out of broadband services by telecom companies. How can the Nigerian Communications Commission (NCC) ensure that spectrum is made available quickly and with maximum transparency?

I am not an expert on spectrum management, so I am unable to comment fully on whether or not there has been poor management. I know for sure that there are series of issues on microwave frequencies and there is a clear need to sanitize usage to ensure that operators who have genuine needs have access to these limited resources and are able to serve the consumers with much desired broadband service from a distribution standpoint, whether point to point or point to multipoint. There have also been series of furor generated in the industry over “access” frequencies both from cost and availability perspective. Having some of these resources split between different regulators have not helped matters, while the cost may also be prohibitive for smaller operators. More than anything else, anytime I hear a clamor for more frequency allocation, the next thing that comes to mind is what people have done with the bands allocated to them. Have they made the most efficient use of these resources for to justify further allocation and are they truly utilizing the spectrum. Maybe that’s where the regulator shout start and focus its attention, i.e. are there operators out there who were allocated resources and are not using it for any meaningful purpose, and should this be withdrawn and given to people who are in actual need of the resources and have demonstrated execution capabilities to make ample case for allocation. I am not aware of any transparency issue, the processes have always been smooth but for the 2.3 Ghz bid fiasco in 2009.

Question 9:
Prohibitive taxation and administrative burden are negatively impacting delivery of broadband services in Nigeria. It is a key challenge facing stakeholders in increasing access to and affordability of broadband services. What can the government of the day do to address this issue?

The issue of multiple, not just prohibitive, taxation has been over-flogged by several industry bodies including ALTON and ATCON. It is also related to multiple regulatory oversights, which continue to stifle deployment of infrastructure and operations of telecommunications operators, affecting delivery of services, including access to broadband services. Until this is resolved clearly and each arm of government fully keeps within its legislative limits, and existing duplicity of oversight functions are resolved, the quality of all communication services will continue to be below desired levels and prices of services may never truly reduce.

Question 10:
A new report from the GSMA shows that by differentially growing non-oil sectors more than the oil sector, broadband can support diversification of the Nigerian economy. How can we better achieve this?

Concerted effort; government, regulator and industry stakeholders including operators and the media, we all have a role to play. We are all witnesses to the socio-economic impact of the advances made in the mobile telephony segment of the market, which has lesser positive externalities than broadband services. I read in some study recently that wireless broadband services alone will directly contribute additional N190 billion to the GDP by 2015, which will represent some 1.22% increase and 1.7% growth in non-oil sector, whilst indirect contribution could be as much as N410 billion during the same time. From crafting a well-articulated policy position and implementing it, to investing in efficient network infrastructure, playing by the established rules of the market and delivering optimum service levels to consumer, as well as subscribing to resources provided by broadband services medium, everyone has a role to play in the process.

Analysts say telcos cannot lead mobile payment schemes in Nigeria

2011-07-18T09:16:00.000-07:00

• CBN gives out seven new approval in principle
Daniel Obi & Ben Uzor Jr

Against the backdrop of plans by some telecommunications companies (telcos) to go into mobile payment services, analysts say the move is against Central Bank of Nigeria (CBN) regulations.The analysts cited regulatory framework for mobile payment services in Nigeria issued by the CBN in 2009 which identifies three acceptable models for the implementation of mobile payment services: bank-focused, bank-led, and third party-led.

According to the analysts, the decision was made because the CBN does not regulate telcos and if the telcos are allowed to lead mobile money, it will mean putting two major segments of Nigeria’s economy in the hands of a few companies. This, they believe, bears great risks for Nigeria. An informed source at the CBN told BusinessDay that the apex bank has issued additional seven approvals in principle (AiP) to prospective mobile payment service providers in the country.

This particular CBN M-Payment regime, which has been tagged the most rigorous, the costliest and the longest-lasting in the short history of the scheme, started about two years ago with the issuance of provisional license to MoneyBoxAfrica and the subsequent release of regulatory guidelines. The issuance of the seven new AiPs takes the number of approvals to 23. Some of the companies included in the latest bazaar are Zenith Bank,MoneyBoxAfrica and Zinternet. The names of the other companies were not available at press time yesterday. There are speculations that VTN and Hendomark made the list.

But the industry is awaiting the result of the just concluded verification of the readiness of 16 firms to start services after the initial four-month trial period. Assessing the development of telcos’ foray into m-payment, Abayomi Atoloye, former director, banking and payment systems department of the CBN, expressed the view that if telcos are allowed to drive the mobile payment scheme, it will create an unequal playing field for other mobile payment operators in the country. This may also give rise to a situation in which a telecommunications company limits its services to only its subscribers.

There should be room for competition, he said. Atoloye went further on to say that “the move is intended to prevent the larger networks from dominating the mobile payment system as they have access to the larger percentage of the population as well as the infrastructure for the deployment of the new payment system.” Head of operations at 3Line, Chinedu Eluchie, said it was not healthy that telcos lead the mobile payment services as this would give them access to the data base of account holders, which is the exclusive preserve of banks.

Rasaq Olaegbe, an electronic payment expert, told BusinessDay it was not ideal for telecoms operators to take the lead in a mobile payment scheme because they lack domain expertise in financial services. “They are not licensed to offer financial services. Telcos are licensed to offer telecoms services. That is why you see MTN partnering with GTBank to roll out mobile money in Nigeria.”

Another analyst, who pleaded anonymity, said: “In the bank-based model, customers have a direct contractual relationship with a prudentially licensed and supervised financial institution, even though the customer may deal exclusively with the staff of one or more retail agents hired to conduct transactions on the bank’s behalf; while in the MNO-based model, customers have no direct contractual relationship with a fully licensed and supervised financial institution. I think this is an area banks have problems with.”

According to the framework, the telcos are required to ensure that their subscribers are free to use a mobile payment system service of their choice. They are also required not to receive deposit from the public except in respect of the prepaid airtime billing of their subscribers; and they are not to allow the use of the prepaid airtime value loaded by their subscribers for purposes of payment or to transfer monetary value. The telcos stand to benefit significantly from the success of mobile money in Nigeria as most of the transactions will be going over their networks.

In November 2010, the CBN granted AiP licenses to 16 companies to operate mobile payment in Nigeria. These operators were required to run a 4- month pilot from December 2010 to March 2011 after which, upon review, full operational licenses were to be issued. The CBN has now concluded its audit of the 16 companies and is expected to issue full operational licenses this month to those it deems ready to launch. The 16 operators are: Stanbic IBTC Bank Plc; Ecobank Nigeria Plc; Fortis MFB; UBA/Afripay; GTBank Plc/MTN, and FirstBank of Nigeria Plc. Others are: Pagatech; Paycom; M-Kudi; Chams; Eartholeum; E-Tranzact; Parkway; Monitise; FET, and Corporeti.

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Tariff wars assume new dimension as Globacom offers 100% free airtime on calls

2011-07-18T09:06:00.000-07:00

Ben Uzor Jr

The on-going tariff war amongst telecommunications operators in Nigeria’s highly competitive market has assumed a new dimension as Globacom, Second National Operator (SNO), on Wednesday introduced a new tariff plan offering telecoms subscribers one free minute for every minute spent on the network. The new offer which comes through a new price plan tagged ‘The Glo 1derfuloffer’, launched at the, Lagos, yesterday, is devoid of any rental payments, hidden charges, and conditions.

Before hand, tariff plan rates on the Globacom network were N15 per minute for on-net calls and N25 per minute for off-net calls. With this new tariff plan, the telecom firm revealed, effective rate becomes N7.50 per minute for on-net calls and N12.50 per minute for off-net calls. This, according to the telecom firm translates into 100 percent free airtime on every call. Besides, subscribers who are on per minute billing plan get to pay only 50 percent of the total cost of every call made within the Glo network.

In addition, calls on the package are effectively charged at only N7.50 per minute. The new plan described by Mohamed Jameel, group chief operating officer, Globacom; as the best value offer in the country telecoms tariff structure gives the caller second minute free for every minute of call. Jameel said that Glo has a strong pedigree as a brand that gives so much back to the society. According to Jameel, the tariff plan was conceived to give the subscriber more value for money.

“This is signposted by this new offer. It is almost like talking for free. Our overall objective is to delight consumers and increase affinity with the Glo brand. Ultimately, subscribers will be encouraged to talk for more minutes and, by so doing, enjoy more free talk-time”, he concluded. Giving lucid insight into what subscribers should expect from the new tariff package, Adewale Sangowawa, executive director, human resources, Globacom, said, “ Subscribers would get 20 percent bonus on recharge, they will be able to make international calls at N9 per minute and get up to 200 MB data bonus.”

Still on the new tariff plan, Sangowawa, said, “The customer pays for the 1st minute, gets the 2nd minute free, pays for the 3rd minute, gets the 4th minute free, pays for the 5th minute, gets the 6th minute free and so on and so forth. In a 4 minute call, the 2nd and 4th minutes are offered free and the pattern continues for as long as the caller stays on the call. Fielding questions relating to how Globacom intends to manage the huge number of Glo subscribers expected to migrate to this new tariff plan, Ashutosh Tiwary, general manager, prepaid marketing, Globacom, said that the telecom company conducted critical test to ascertain network readiness before going live.

“We have conducted network readiness test. We also did our projections to determine the traffic levels and how many call minutes will be generated as a result of the new offer. We are continuously adding base stations in more areas. As soon as we get information that there is network congestion, we commence roll-out of new base station to address issues of poor quality of service and ensure that we provide best-in-class telecommunications services to our teeming subscribers”, he added.

“Glo gives more time to talk and talk. The more the subscriber talks, the more free talk time he gets. The free minute is available on both on-net and off-net calls. To migrate to the new package, all the subscriber needs to do is dial *100* 11*1#” he said. In the past, Globacom had introduced unique price plans that made calls much more affordable to subscribers. They include the Glo Talk More and New Infinito. With superior network quality experienced on the network, Glo is primed to ensure customers on the network engage in effective communication.

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Poor spectrum management slows down telcos’ rural broadband expansion drive

2011-07-18T08:50:00.000-07:00

. . . FG urged to harness Digital Dividend spectrum for rural access
Ben Uzor Jr

There is growing apprehension amongst telecommunications companies that majority of the Nigeria’s population especially those who dwell in the 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. Available statistics reveal that 40 million Nigerians living in about 850 villages across the country do not have access to basic telecoms services. An analyst told Business Day yesterday that Nigeria’s digital divide is still wide even with Nigeria’s 90 million active subscribers.

According to him, rural dwellers yearn to be connected to the rest of the world but have no telecoms facilities to do so. Some telecoms companies like Globacom, MTN, and Airtel have complained that their rural broadband expansion plans have been slowed down by the absence of requisite spectrum needed to rollout broadband internet services. Telecoms companies had earlier called on the federal government to as a matter of expediency harness Digital Dividend spectrum for rural access.

This, they further maintained would ensure that rural communities benefit from the GSM revolution. The digital dividend spectrum located between 200 MHz and 1 GHz offers an excellent balance between transmission capacity and distance coverage, thus enabling efficient network deployment. Due to its good signal propagation characteristics fewer infrastructures are required to provide wider mobile coverage, allowing communications services to be provided in rural areas at lower costs.

“In 2011, Globacom is making significant investment in the area of bringing best-in-class broadband services to rural areas. I am sure that other telecoms companies are doing the same because millions of Nigerians, especially those in the rural communities are yet to enjoy the benefits of the GSM revolution. As it relates to broadband deployment, spectrum unavailability is slowing down our rural broadband expansion plans. Federal government must speed up the allocation of new frequency spectrum to mobile services”, a senior executive at Globacom who pleaded anonymity told Business Day yesterday.

Kazeem Oladepo, head of legal services, Main One cable told Business Day in an interview recently that operators must reassess their spectrum strategies and find the appropriate approach to re-leverage existing 3G spectrums to deliver the scale and coverage needed to deliver affordable and efficient internet services to rural communities. As it relates to the problem with spectrum management in Nigeria, he said that a single agency, familiar with the major uses of spectrum, should manage assignment of spectrum rather than having responsibility split between two or more agencies.

“There have also been series of furor generated in the industry over ‘access’ frequencies both from cost and availability perspective. Having some of these resources split between different regulators have not helped matters, while the cost may also be prohibitive for smaller operators. More than anything else, anytime I hear a clamor for more frequency allocation, the next thing that comes to mind is what people have done with the bands allocated to them. Have they made the most efficient use of these resources for to justify further allocation and are they truly utilizing the spectrum.

“Maybe that’s where the regulator shout start and focus its attention, i.e. are there telecoms operators out there who were allocated resources and are not using it for any meaningful purpose, and should this be withdrawn and given to people who are in actual need of the resources and have demonstrated execution capabilities to make ample case for allocation”, Oladepo further added. The Main One executive argued that the current situation in matured markets like the United States (US) and the United Kingdom (UK) is that the media and telecom regulator are converged.

If this model is replicated in Nigeria, according to him, it would enable efficient management of national spectrum resources and also support the delivery of better services to Nigerians. He said that NCC had done considerably well in the area of spectrum management under the Ndukwe administration, noting that much is yet to be seen from the new administration. Wale Goodluck, corporate services executive, MTN, who spoke to BusinessDay in a telephone interview recently believes that optimal management of national frequency resources will boost rollout of innovative broadband services. According to him, spectrum unavailability is hindering telcos from expanding broadband services especially in rural areas.

“We must look at diverse alternatives to drive broadband capacity. We must also look critically at spectrum sharing. “There is a fundamental need to implement a clear spectrum policy that will lead to ubiquitous mobile broadband services. “They must ensure that spectrum is resold thus freeing up a lot of frequency not in use but held by people and institutions without requisite capacity to deploy services”, he noted. Ross Bateson, spokesperson for GSMA agrees with Goodluck, adding that government must also start to contemplate the release of low frequency Digital Dividend Spectrum.

This, he said would be instrumental in ensuring rural Nigeria benefit from high broadband internet connectivity. “The Nigerian government must also learn from recent developments in Brazil, whereby regulator ANATEL re-farmed already allocated, technology neutral, 2.6 GHz spectrum to Multichannel Multipoint Distribution Service (MMDS) operators for pay-per-view television services and had it re-allocated to operators for mobile broadband provision.”

Migration to new internet commences tomorrow

2011-06-07T08:38:00.000-07:00

. . . Nigerian internet users may witness restricted access
Ben Uzor Jr

Come June 8, 2011, Nigerian internet users will be restricted from accessing the World Wide Web (www). The reason for this however is not far fetched as a test run programme which demands 24-hour migration to a new Internet Protocol (IP) platform (IPv6) will be conducted globally by internet bodies on the said date. Moreover, IPv6 is the sixth revision to the Internet Protocol and the successor to IPv4 platform. For 30 years running, IPv4 has been the foundation of the internet and now that it is almost out of addresses, the transition to IPv6 is no longer a matter of choice but necessity.

Earlier this year, the last batch of IPv4 addresses was allocated at a ceremony in Miami to Asia Pacific Network by Internet Assigned Numbers Authority (IANA) the body that oversees the global allocation of internet addresses. This however underscores the extent to which the internet has become an essential part of modern life. When the test run commences tomorrow, according to analyst who spoke at a roundtable forum organised by DigitalSENSE Africa (DSA) in Lagos recently, Internet Service Providers (ISPs) will be incapable of connecting to Yahoo, Google, Facebook and other online communities.

This is principally because all ISPs in Nigeria are currently on IPv4, which does not operate in concert with IPv6. According to the analysts, the disruption is expected to last for no more than a day. The test run, according to industry analysts was in commemoration of the World IPv6 Day. Businesses wishing to remain competitive, Chima Oleru, a network engineer told Business Day, must apply a mechanism to their infrastructure that would allow both versions to run. “Therefore, it is essential that your network devices are upgraded and configured to run dual-stack, in order to cope with the coming IPv6 traffic.

Dual-stack refers to running IPv4 and IPv6 in parallel. This will allow your servers to respond simultaneously both to the old IPv4 requests, and to the newer IPv6-connected devices”, Oleru disclosed. Some telecommunication companies (telcos) like MTN, Globacom and Etisalat have allayed fears of restricted access to the internet, claiming that they are fully prepared for the migration. Echoing their views, Gbenga Adebayo, president, Association of Licensed Telecommunications Operators of Nigeria (ALTON), stated that telcos have deployed and are deploying world’s most modern technologies.

“It has prepared us well ahead towards significant technology migration as we now face in the world today, therefore we do not foresee any impact on internet networks and users in the course of this migration”. Adebayo went further, “We are fine tuning our equipment and infrastructure to support the migration form IPv4 to IPv6.” According to him, migration will throw another challenge to telcos in terms of infrastructure and software upgrade, hardware replacement. “IPv6 migration may have an impact on ISPs without requisite funding. They may not be able cope.

“It might also open up new opportunities for new operators to take advantage of.” Nkemdilim Nweke, executive director, operations, DigitalSENSE Africa does not believe that Nigeria is indeed ready for this transition, further disclosing that though Nigeria now has 16 allottees of IPv6, none offers internet related services in the country on this new IP platform. She therefore urged Nigerian organisations to position themselves to take advantage of the limitless opportunities IPv6 offers to innovative users of the internet and developers of new technologies.

“We, therefore call on the federal government to establish a task force through it agencies to take immediate proactive actions that will ensure that Ministries, Departments and Agencies (MDAs) as well as organisations in Nigeria prepare their services for IPv6 migration, encourage greater Research and Development investment in activities around the future internet, encourage and support private sector participation as awareness creation is key to the early adoption of the second internet”, she stated.

However, the phenomenal growth of the internet into various areas of society such as mobile devices, IP based consumer electronics, household appliances and even the automobile industry has accelerated the exhaustion of IPv4 addresses. “The heart of any IP network is the IP address system. Every device on the IP network requires a unique address to speak with another device on the network. IPv4 provides 4.3 billion addresses and a large portion of these addresses are unavailable for public allocation.

“IPv4 addressing structure does not provide sufficient publicly routable addressing which will enable a distinct address to every internet service or device”, Cleopas Angaye, director-general, National Information Technology Development Agency (NITDA) said at the roundtable conference. IPv6 functions similarly to IPv4 in that it provides the unique, numerical IP addresses necessary for Internet-enabled devices to communicate. Furthermore, IPv6 is the next generation IP address standard intended to supplement, and eventually replace, the IPv4 protocol used for Internet services.

“IPv4 uses 32 bits for its Internet addresses. That means it can support 2^32 IP addresses in total — around 4.29 billion. That may seem like a lot, but all 4.29 billion IP addresses have now been assigned to various institutions, leading to the crisis we face today. IPv6 utilizes 128-bit Internet addresses. Therefore, it can support 2^128 internet addresses — 340,282,366,920,938,000,000,000,000,000,000,000,000 of them to be exact. That’s a lot of addresses, so many that it requires a hexadecimal system to display the addresses. In other words, there are more than enough IPv6 addresses to keep the Internet operational for a very long time”, Adebayo noted.

Giving insight into some reasons why ISPs are not implementing IPv6, Muhammed Rudman, managing director, Internet Exchange Point of Nigeria (IXPN) said ISPs lacked the technical know-how to migrate. “ISPs are faced with challenges bordering on core equipment compatibility issues, lack of IPv6 upstream service providers, and more importantly, no request from Nigerian internet users”, he added. Finally, IPv6 can accommodate the immensely growing number of users, devices with wireless or wired access, and web services on the Internet. Moreover, this new IP platform will enable Nigerian enterprise customers to have more public IP addresses to allocate within their organisations.

Nigeria to benefit from Bharti’s $1bn new Africa investment

2011-06-01T06:05:00.000-07:00

Ben Uzor Jr

Airtel’s Nigeria, Ghana, Kenya and Uganda operations will benefit from an additional $1 billion investment earmarked by Bharti International to support network expansion of its Africa mobile business. This investment move is subsequent to the telecom firm receiving the necessary regulatory approvals in all 16 countries on the African continent acquired in the preceding year.

Sunil Mittal, group chief executive officer, Bharti International, has disclosed that the Indian firm will invest an additional $1 billion in its fledgling Africa mobile business this year. Bharti Airtel acquired Kuwait-based Zain’s Africa operations for $10.7 billion in 2010 in what has been described by many analysts as the largest cross-border takeover in an emerging market.

Analysts, yesterday, see the Indian based firm injecting about $500 million into its Nigerian operations. Mittal has also reiterated the firm’s resolve to further grow its Nigerian business, stating earlier that the success of Airtel on the continent was largely dependent on Nigeria. “We have already invested $11 billion here and have committed nearly $1 billion investment for this year for expansion of our networks,” said Bharti’s boss in a report sighted by BusinessDay yesterday. However, Mittal seemed to dismiss rumours of further expansion into other African countries.

“At the moment, we are focusing on our 16 countries and for any future expansion in Africa, we will see as the opportunities come, as there is nothing on the table at the moment.” According to the report, in its last fiscal year (2010-11), Bharti reported a net loss of $97.7 million in its Africa operations on revenues of $3 billion. At the end of the company’s fiscal fourth quarter (ending March 31), it had 44.2 million African subscribers, which included quarterly net additions of 2.1 million.

With Average Revenue per User (ARPU) for the African unit at $7.2 per month, Mittal noted that some of the Africa businesses were doing better than others. “Out of the 16 countries, most of them are profitable. As far as Africa is concerned, we have to grow in Nigeria; we have to grow in Ghana, Uganda, Kenya. There are a few countries where we have to step up.” Relating to network expansion, Airtel is building a 3G network expected to cover 80 percent of Nigeria’s population by 2012 and required to offer cheaper and reliable internet services to its customers.

Rajan Swaroop, chief executive officer, Airtel Nigeria, who confirmed this in an interview recently, said the project was strategic for increasing market share as the bulk of telecom revenue in Nigeria was expected to come from data services in the next five years. An analyst told BusinessDay yesterday that the extra investment by Bharti would further strengthen the project; adding that Airtel was spurred on by the prospect of increasing revenue from data services as voice revenue continues to drop.

Speaking in an interview with Russell Southwood of Balancing Act accessed by BusinessDay at the weekend, Swaroop declared: “We are building a 3G (Third Generation) infrastructure and by the time we’re finished, we will have covered 70 to 80 percent of the population and that’s, maybe, one year away. We currently have 100,000 to 150,000 subscribers but we strongly believe that the overall potential for this is something like 2 million subscribers out of an overall total of 16 million”.

Commenting on the company’s financials, the Airtel boss revealed that over the last 12 years, the performance of the business has been declining but by virtue of the investments made in infrastructural development, he believed Airtel Nigeria would be self-funding and cash-flow positive in the next 18 months. “We also intend to encourage the Nigerian Communications Commission (NCC) to introduce Mobile Number Portability. Then the best provider will be successful,” he said.

Giving a vivid insight into the company’s position with regard to international fibre and acquisition of bandwidth capacity, Swaroop disclosed that the telecom firm had bought significant capacity from both MainOne and Glo-1 cables. “The price per MEG is down to US$300-350 per MEG per month at volume and this price is a substantial drop from what was available previously. We will probably double our capacity in the next 6 to12 months and prices will come down again. They are currently pretty high compared to rates across the world. In India, it is sub US$10 per MEG”.

Bharti Airtel, who took over mobile operations in 15 African countries in a deal that makes it the world’s fifth-biggest mobile firm with 180 million customers in 18 countries, is known for its low-cost strategy; but the firm has revealed that it will not adopt the same strategy which has made it India’s market leader. In India, Airtel’s call rate charges are as low as 1 US cent as against the 20 US cents charged in Nigeria currently.

Why mobile phones will replace cash, plastic cards

2011-06-01T06:04:00.001-07:00

Ben Uzor Jr

As Nigeria gradually moves towards the era of mobile payment system, plastic cards (debit and credit) may soon become old-fashioned, analysts told BusinessDay at the weekend. This is even as mobile money operators, regulators make every effort to sustain the shift from card-based transaction to mobile-based transaction. A prominent industry analyst who pleaded anonymity told BusinessDay at the weekend that Nigerians are increasingly ‘living their lives on their mobile phones’.

A development, he added could drive the adoption of mobile payment services. “I definitely believe that the mobile money will eventually replace the plastic card. It is going to take some time though because consumer habits take a long time to change. We hear that some of the 16 firms granted Approval in Principle (AiP) by the Central Bank of Nigeria (CBN) to commence pilot programmes of Mobile Money services have begun submission of trial reports to the apex bank for verification.

“We are going to see it move beyond trials and into reality. Ultimately, we are going to see more and more people leave their homes without their wallets”, he further maintained. In relation to m-payment, industry watchers strongly believe that 2011 will be a dynamic year with service providers positioning in various diverse ways to redefine the digital payment landscape. In 2010, the Central Bank of Nigeria (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. Beyond this, millions of mobile phones capable of making contactless payments are expected to be shipped out this year.

Recent Pyramid Research report has projected that the global mobile money industry would generate over $200bn by 2015. But more importantly, industry analysts believe that the success and expected growth will be largely dependent on subscribers’ trust in the system in respective countries. Onajite Regha, CEO, Electronic Payment Providers Association of Nigeria (EPPAN) who spoke at a forum organised by the body in Lagos recently, said the industry need to “agree on what strategy we must adopt to create an enabling environment which will ensure the success of m-payments to adequately protect investors and ensure credibility within the operations to gain consumers trust.”

Chuma Ezirim, group head, eBusiness for FirstBank of Nigeria (FBN), pointed out that the robust mobile payment ecosystem would drive incremental value propositions to all parties involved in the scheme. “For banked consumers, mobile payment provides new ways and places to make payment. For Banks (Issuers & Acquirers), it helps to grow payment revenue, merchant accounts. Mobile payments also open up new business opportunities for financial institutions and reduce cost of service delivery.

“In the case of telecoms operators, mobile payments reduces airtime cost, churn and helps grow ARPU (Average Revenue per User) and VAS (Value Added Services) and so on”, Ezirim stated. Commenting on the huge potential of mobile money in Nigeria, Luqman Balogun, divisional head, e-Banking, UBA told Business Day in an interview, “today, we have less than 30 million accounts in Nigeria relative to the population of 150 million. As at the last count, figures show that we have almost 100 million mobile subscriptions. “The question is why don’t you convert those phone lines to bank account”.

The future of mobile payments industry in Nigeria looks bright, many industry analysts believe. However, Nigerians are doubtful about its successful implementation. Emmanuel Okogwale, principal consultant, Mobile Money Africa, thinks that a robust agent network drives mobile money, not technology. “Stakeholders should endeavor to build a shared agent network to serve all the stakeholders. Since agency is the Heart of mobile financial services and the agents do not sell primary products of the licensee unlike in Mobile Network Operator (MNO) driven ecosystem.

“There is a need to source, develop, train and deployed agents on a shared basis. “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”, he posited. According to Okogwale, many potential agents do not know on what authorisation are these providers acting on.

He called on the CBN to step in by allaying the fears of the agents and also help the industry develop a standard enterprise Risk and mitigation framework.

Mobile Money Service operators begin submission of trial reports

2011-06-01T06:01:00.000-07:00

. . . CBN may issue final license in July
Ben Uzor Jr

Nigeria is gradually moving towards the era of mobile payment system as operators, regulators make every effort to sustain the shift from card-based transaction to mobile-based transaction. Indication however are that some of the 16 companies granted Approval in Principle (AiP) by the Central Bank of Nigeria (CBN) to commence pilot programmes of Mobile Money services in the country have begun submission of trial reports to the apex bank for verification, Business Day can reliably reveal.

Mobile Money Service Providers granted provisional licenses by the apex bank 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 firms, informed sources told Business Day, are expected to show concrete evidence that 50 customer have carried out live transactions on their mobile payment platforms during the four months trial giving to them by the apex bank.

Other conditions, Business Day further also include: the logs of the transactions, showing dates and time. Besides, each of the 16 companies must submit at least names and locations of 30 agents for verifications. Meanwhile, it was also learnt that the apex bank may issue final licenses in July based on the advice of the auditors. Emmanuel Obaigbona, deputy director, banking and payments system department of CBN at an industry forum recently disclosed that the CBN has invited Enhancing Financial Innovation & Access (EFInA), a body set up to promote access to financial services for the unbanked and under banked in Nigeria to do an audit trail of the operators to ensure that there are no systemic risks.

Obaigbona stated that subsequent to the audit trail, licences would be issued to deserving operators, further adding that any mobile money service providers that fall short of the required criteria for assessment on the pilot by the CBN would not be licensed. Moreover, the apex bank had earlier warned mobile money operators that the approval-in-principle does not guarantee them automatic license after the four month period. According to the CBN, each of the operators must earn their place in the new initiative which is expected to take banking services to underserved and unserved areas.

Emmanuel Okogwale, principle associate, Mobile Money Africa, who spoke with Business Day in an interview, confirmed that mobile money operators had begun submitting trial reports, further stating that the apex bank was checking the provider's processes to validate technology, agency network, risk, customer protection. Okogwale pointed out that the audit is necessary to understand the operations of the providers and if necessary advice them, drop some and approve some as the case may be. “Some of them do have compelling services for the unbanked however, Mobile Network Operators (MNOs) connectivity challenges might be standing in their way but that is not to say they will not pass through.

“The CBN in their wisdom are not looking for perfect systems but checking for vulnerabilities to prevent a systemic risk that will have a knock-off effect not only on primary business of the providers but the whole economy. I welcome the audit process and I also commend the providers that are ready for such audit. It is to all Nigerians advantage to have a working and secure mobile payment system”, he said.

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

2011-05-24T10:37:00.000-07:00

• 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

2011-05-13T09:45:00.000-07:00

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

2011-05-11T08:18:00.000-07:00

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

2011-05-05T07:29:00.000-07:00

…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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Nokia E7: Pretty, hot and tempting

2011-04-29T08:19:00.001-07:00

Saturday night, I was dressed to kill, spotting a pink TM lewin shirt, a pair of sky blue Wrangler jeans, Armani belt and black Paul Smith footwear, fresh boy! On my wrist, I had a Baume & Mercier watch on and gold Christian Dior wrist chain. Geez, I was fully equipped to make that kill tonight, if you catch my drift. I stepped into Number 10 Restaurant and bar, got myself a bottle of Heineken, picked a spot in the bar with a pleasant view, sat down to enjoy the appealing flavor of a perfectly brewed beer.

After a few minutes, Alex came in and we exchanged pleasantries. I had earlier spoken with Alex and we agreed to meet at the bar. Alex is quite a catch with the ladies but honestly I get fed up with his overly boring gist of his numerous escapades. Anyway, he sat down and as expected the next thing he said was: “Dude, I was with one cute babe last night……” Hear we go again, I murmured. Just as we were about to get into another long and windy argument about how insensitive I was, a guy stepped into the bar.

In his hands was the most beautiful….goodness! My mouth was agape for at least ten seconds before I got a hold of myself. It was my first time of seeing something like this, lord have mercy! Stunningly beautiful, that’s what ‘she’ was. We (I and Alex) practically drooled at what we saw – one of the sexiest we have ever seen. The glossy lines, hoary colour and nice curves screamed, “Look at me! Hold me!! Touch me!!!” God knows, I wanted to. I am trying not to over flog it, but if ‘bling’ and ‘effizy’ is your thing, taking this ‘sassy babe’ with you to any meeting or social event is bound to get heads turning.

I was tempted into snatching the ‘hottie’ from the guy. Sweet memories of the pastor preaching on the pulpit filled my mind. Just like a sledge hammer slamming against the anvil, I heard a voice, ‘Thou shall not covet you neighbours wife or property’. I turned to Alex and with an ecstatic tone said, “Lexy, check out this Nokia E7, this phone is off the hinges man!” Got ya! I hope you guys were not having any grimy thoughts. I can’t believe this….I mean, come on! This is a Business newspaper not Hints or Hearts magazine. Nevertheless, the Nokia E7 actually makes the N8 look very unattractive.

I use an N8 but I was practically lusting after the new communicator in this guy’s hands. The dude, who later identified himself as Abdulrasheed, a staff of MTN Nigeria, was not a natural flaunter. I could tell by just looking at him, but the E7 made him look like a ‘pro’. Filled with excitement, I asked him, ‘where did you buy the device?’ He replied: ‘It’s not in the market yet, I had to order it. It’s a nice phone. It provides direct, secure and real-time access to e-mail, calendar, contacts, tasks and the corporate directory through Microsoft Exchange servers, and Office Communicator Mobile, developed by Microsoft for Nokia smartphones, which brings presence and corporate e instant messaging.’

He went on, “With its tilting 4 inch clear black display, full keyboard and a fast access to a wide variety of apps directly on the homescreen, the Nokia E7 is the key to having a successful day in or out of the office. The E7 supports business applications from leading enterprise technology firms including IBM and Microsoft.” I was blown away by his in-depth knowledge of Nokia devices and was forced to ask him, do you also work with Nokia sales and marketing department? He smiled and said, ‘I am just a phone freek’.

Over the years, we've seen a steady stream of business and messaging-centric landscape QWERTY smartphones come and go, with HTC arguably leading the pack via its collection of Windows Mobile, Android, and WP7 devices featuring sliding keyboards and tilt-out displays. But few of HTC's offerings are as iconic or memorable as Nokia's line of Communicator clamshell phones -- starting with the Nokia 9000 in 1996, continuing with Symbian S80 models, and culminating with the Nokia E90 atop S60v3. The Nokia E7 is the latest Communicator in this distinguished series and the manufacturer’s current flagship device, dethroning the Nokia N8 which continues on as the company's media mogul.

A lot has changed in the six months since the N8 was introduced, including Nokia’s recent partnership with Microsoft and the stunning announcement that it will be adopting Windows Phone for future high-end smartphones. So, is the E7 -- which is finally shipping in the United States of America (USA) -- the greatest Communicator to date? Can it carry the torch for Symbian in the immediate future? And more importantly, how does it fare in today’s shark-infested Android and iOS waters?

Hardware

Let's make one thing abundantly clear: black or silver, the Nokia E7 is one gorgeous piece of hardware. It might not have the proportions of the Dieter Rams-inspired iPhone 4, but it's a handsome and refined phone that can definitely compete in terms of materials and build quality. The E7 design language mimics its N8 sibling, and consists of a flattened aluminum cylinder that features a 4-inch glass-capacitive touchscreen on one side, a glass window protecting the 8 megapixel camera and dual-LED flash on the other side, and tapered plastic covers hiding antennas and connectors at each end.

From the front the E7 looks like a larger N8, but in order to accommodate the physical keyboard, the body is sliced longitudinally into two sections. The thinner "half" houses the tilt-out display and the menu key (centered below the touchscreen), the other "half" contains the keyboard, the camera, and most of the electronics. Without a camera pod sticking out the back, the E7 ends up being thinner than the N8 overall, and one of the slimmest landscape QWERTY devices we've come across. The E7 feels hefty in a reassuring, confidence-inspiring way -- as a point of reference, it's almost the same weight and size as the HTC Thunderbolt, but about 6 mm (1/4-inch) narrower.

Fit and finish are impeccable, and so is the attention to detail: there's a machined and polished bevel surrounding the camera window in the back of the E7 and lining the edge of every control on the aluminum body. The top cap contains a 3.5 mm headphone jack, the power / profile key, a mini-HDMI port (behind a plastic door), and a micro-USB connector with a charge indicator. At the opposite end, the bottom cap hosts a microphone and a single speaker. We found a few niggles here.

While the headphone jack supports stereo accessories (3-pin) without any problems, it's electrically incompatible with most non-Nokia headsets (4-pin). The speaker is very loud and clear but is positioned such that it becomes muffled slightly as soon as the phone is placed face-up on any flat surface. On the right edge of the E7 you'll find a SIM tray (that's easily removed with a fingernail), a volume slider (which feels downright awkward), and the camera shutter button. The screen-locking slider benefits from the same excellent spring action as on the N8 but lives by itself on the left edge, where it's easier to access when using the keyboard.

Camera

The E7 is equipped with an 8 megapixel EDoF (Extended Depth of Field) camera and dual-LED flash. In typical Nokia fashion the optics and sensor is top notch. This, together with superior image processing results in beautiful shots. As you can see in our sample pictures, color balance and exposure are excellent, and noise is kept under control without obliterating detail. While it's no match for the phenomenal N8, the E7 camera stands out amongst today's smartphones. There's however one massive, glaring problem -- the elephant in the room, if you will -- and that's the EDoF lens.

Depth of field becomes meaningless with this camera. Sure, everything from 60cm (two feet) to infinity is perfectly in focus, but just like with a fixed-focus lens it's impossible to take closeup shots. Nokia waxes poetic about how EDoF means no moving parts, allows for a thinner device, improves shooting speed, and makes it easier for the average person to use the camera. We're reminded how the 8 megapixel sensor captures enough information that images can be enlarged and cropped without a huge impact on quality. This is all true, but we feel EDoF is too much of a compromise especially when it's combined with a decent sensor and optics. It just takes away an entire layer of creativity from the picture taking experience when compared to an autofocus lens.

Software

We're going to be frank here: Symbian breaks what is otherwise great hardware. Most of what we mentioned about the software in our N8 review applies to the E7 -- it's the same tired routine, a frustrating user experience that quickly becomes a burden day-to-day. Now, before you get up in arms, you have to remember that we've been Symbian users for a very long time, so we're well aware of the strengths and weaknesses of this once-glorious OS.

The sad reality is that when measured against other major platforms Symbian is no longer competitive, especially at the high-end of the market, and that's even true today than it was six months ago after the launch of the N8. With that disclaimer out of the way, let's look at some specifics. Our European review unit was running what was formerly known as) Symbian^3 PR1.1 while our US model was one release behind at PR1.0, and both devices were using browser version 7.2.

Cybercafé patronage drops as Nigerians opt for individual subscription

2011-04-25T07:52:00.000-07:00

Ben Uzor Jr

Cybercafé patronage in the country is declining in favour of individual subscription as telecommunications operators (Telcos) continue to roll out cheaper and innovative broadband internet services, industry analysts told BusinessDay at the weekend. Confirming the development, Ross Bateson, spokesperson for the Global System for Mobile Communication Association (GSMA) told BusinessDay that only 66 percent of users accessed the internet from a cybercafé in 2009 down from 82 percent in 2008, as workplace, home and mobile usage increased.

“Cyber usage is declining in favour of individual subscription”, he said. An analyst told BusinessDay this has also translated into revenue loss for operators of Cybercafes and job loss for those who work in those places. A prominent analyst told BusinessDay earlier that the bulk of telecoms revenue was expected to come from mobile broadband and data services in the next five years.

To this effect, mobile network operators are paying keen attention to data (internet) services as the new revenue generating stream. However, a new report from the GSMA, a global body representing the interests of mobile operators, indicated that 31 million Nigerians accessed the internet in 2009. Other estimates put the figure as high as 43 million. According to Bateson, broadband internet usage will be driven essentially by an increase in personal computer (PC) ownership, expected to rise from 7 percent of households in 2009 to 13 percent in 2014.

Gbenga Adesanya, a telecom analyst, agrees with Bateson; claiming that low-end smartphones and PCs will increasingly become the preferred consumer broadband devices. Industry analysts maintain that with the proliferation of underwater cables on the country’s coastline, and by virtue of their unified license - designed to allow them offer a bouquet of services - telcos are offering innovative and affordable internet services geared towards meeting the growing internet demands of Nigerians.

As of today, MTN, Globacom, Airtel, Starcomms, Visafone, ZoomMobile and even new entrant Etisalat, offer broadband internet services to Nigerians. Conversely, stakeholders in the Information Communication Technology (ICT) sector have said that Nigeria’s cybercafé industry could spring up again and become an enterprise haven if operators are focused and geared up to bring to bear the required professionalism and innovation into the business, without necessarily succumbing to the evident infrastructural challenges facing the industry.

They blamed that failure of the industry on wrong use of application and the absence of professional advice. For the industry to be revived, they suggested that operational challenges such as bandwidth unavailability due to high cost, power, poor technology infrastructure, unfriendly taxation for Internet service providers (ISPs), unaffordable modems and electronic fraud must be fully addressed. Lanre Ajayi, past president, Nigerian Internet Group (NIG), pointed out that only a change of approach will help revive the ailing industry and avert its imminent collapse.

According to him, changing of tactics has become necessary in view of the dynamics inherent in running a Cybercafé enterprise in modern day business environment; especially as it relates to emerging technologies. Ajayi observed that the demand for internet services had started increasing; this is in addition to steady adoption of online payment in the government establishments across the country in line with the global best practices. This, he added to a large extent underscores the need for evolution of Cyber business in Nigeria, built on strong business ideals and professional competence.

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Broadband to generate N598 billion for Nigeria’s economy by 2015, says GSMA

2011-04-06T05:35:00.000-07:00

Ben Uzor Jr & Biodun Coker

Indications are that Nigeria’s wireless broadband market will have a direct revenue impact of N598 billion by 2015, the Global System for Mobile Association (GSMA), a global body representing the interests of mobile operators, predicted yesterday. A new report made available to BusinessDay revealed that mobile broadband can potentially contribute over 1 percent of GDP (Gross Domestic Product) and 1.7 percent of non-oil GDP in 2015, supporting diversification of the Nigerian economy.

Such economic gain, the GSMA however maintained, would depend on a positive environment created by all stakeholders with regard to infrastructural development, frequency spectrum management, and access to internet for women and rural citizens. The report further asserts that if positive policy actions are effectively taken by the federal government to remove barriers to mobile broadband adoption and delivery in the country, the benefits to GDP in 2015 will be an additional N190 billion.

However, according to the GSMA, in bringing this projection to fruition, government support could take the form of harmonisation of tax and levies, as well as proper management of national frequency spectrum. “The federal government must reduce the 35 percent tax level faced by Nigerian mobile operators, a tax which is double the global average. The federal government must also implement harmonised levies or taxes and environmental approvals processes at state and local levels of government”, Ross Bateson, spokesperson for GSMA told BusinessDay in an interview.

According to the study, only 6 percent of all Nigerians currently have access to broadband services, and 74 percent of those do so through mobile broadband. There is little fixed broadband connectivity outside Lagos, and even in cities, most cyber cafes now connect to the internet using wireless services. Bateson said Nigeria’s poor management of national spectrum could slow down foreign direct investment in the telecoms sector, thus reducing the uptake and growth of mobile broadband.

“The 2.3 GHz award process has been mired in controversy for over a year. More than 2 years have passed since 2.5 GHz was proposed to be offered by 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”. The GSMA spokesman called on the Nigerian Communications Commission (NCC) to ensure that spectrum is made available quickly and with maximum transparency, using international harmonised band plans.

Bateson also pointed out that the federal government must, as a matter of expediency, implement e-government initiative, including online transactions, for license and levy payment, and support the development of web content and applications as well as commit to publishing state-owned datasets (e.g. population, geography and financial), so that entrepreneurs can easily leverage their benefits.

The report also forecast that wireless broadband will create N410 billion of indirect value through 2015 in various sectors of the economy, namely: Manufacturing, services, and agriculture; diversifying outside the oil and gas industry. This, the report noted, was because industrial productivity increases as workers increasingly use e-mail and electronic file exchange, thus providing quicker access to businesses’ critical information and faster access to more distant customers and suppliers.

Another core benefit the report alludes to is that improved broadband would increase the attractiveness of Nigeria to foreign investors. Over 30 million Nigerians accessed the internet in 2009, increasingly choosing personal subscription over cybercafé access, the report disclosed. In addition, only 66 percent of users accessed the internet from a cybercafé in 2009. This represents a drop from 82 percent the year before as workplace, home and mobile usage increased.

Key metrics confirming the direct impact of wireless broadband penetration on the Nigerian economy shows that the number of users will increase from 1.3 million in 2010 to 13.9 million in 2015. This figure could grow further with the enormous bandwidth capacity emanating from two submarine cables. Conversely, the GSMA has called on the federal government to adopt best practices spectrum policy, with spectrum resources managed by one entity in order to improve penetration.

However, the GSMA fingered power supply as a key barrier to widening broadband usage in Nigeria. “In Nigeria, where generators work for up to 22 hours a day, two generators (costing in total $40, 000) are typically used to power a base station. In more energy reliable markets such as Ghana, Kenya and Tanzania, the cost is about half. “Benchmarks show that OPEX (Operating Expenditure) spend on power per telecom tower in Nigeria is as high as $2, 000 compared to $429 in India”, the report stated.

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Airtel Nigeria set sights on data market as competition thickens

2011-03-29T10:16:00.000-07:00

. . . Expect to be cash-flow positive in 18 months
Ben Uzor Jr

Airtel Nigeria 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, disclosed in an interview. This is even as the data market has emerged as the new ‘competition war front’ for telecommunications firms in the country. An analyst told Business Day that the project was strategic for increasing market share as the bulk of telecom revenue in Nigeria was expected to come from mobile broadband and data services in the next five years.

Swaroop noted that Airtel was spurred on by the prospect of boosting revenue from internet data services as voice tariffs continue to fall. “We are building a 3G (Third Generation) infrastructure and by the time we’re finished, we will have covered 70 to 80 percent of the population and that’s maybe one year away. We currently have 100,000 to 150,000 subscribers but we strongly believe that the overall potential for this is something like 2 million subscribers out of an overall total of 16 million.

Commenting on the company’s financials, the Airtel boss revealed that over the last 12 years, the performance of the business has been declining but by virtue of the investments made in infrastructure deployment, he believes Airtel Nigeria would be self-funding and cash-flow positive in the next 18 months. “We also intend to encourage the Nigerian Communications Commission (NCC) to introduce Mobile Number Portability. Then the best provider will be successful.”

Giving vivid insight into the company’s position with regard to international fibre and acquisition of bandwidth capacity, Swaroop disclosed that the telecom firm had bought significant capacity from both MainOne and Glo-1 cables. “The price per MEG is down to US$300-350 per MEG per month at volume and this price is a substantial drop and what was available previously. We will probably double our capacity in the next 6-12 months and prices will come down again.

“They are currently pretty high compared to rates across the world. In India, it is sub US$10 per MEG. Bharti Airtel, who took over mobile operations in 15 African countries in a deal that makes it the world’s fifth-biggest mobile firm with 180 million customers in 18 countries, is known for its low-cost strategy but the firm has revealed that it will not adopt the same strategy which has made it India’s market leader. In India, Airtel’s call rate charges are as low as 1US cents as against the 20US cents charged in Nigeria currently. “We have not dropped prices significantly in Nigeria.

It’s no good having a too good N12 product that is actually a N14 product. But with our new tariffs, we’ve created excitement and pull. “There’s not been huge numbers but there has been some change. We wanted to see what kind of reaction there would be to this kind of offer and galvanise our sales distribution process. The question was: can we galvanise our own teams.

If the answer was positive, then I think we can stand and fight. We didn’t want to do disruptive price packages because we don’t believe the lead to customer stickiness or loyalty. I’m going to see how I can take some customers from others but we don’t want to destroy the value in the business”, he posited. In the area of customer care service which some telecoms operator often say differentiates them, he explained that the firm needs to provide higher levels of customer service as it was discovered that 90 percent of its customer care calls failed to get through to the call centre.

“We’ve added 1,400 people and bought this number down by 30 percent. By April this year, we should have cleared the backlog out and got that figure down to 5 percent or less. We’re also enabled customers to use self-help services. And for example on what’s the balance at the end of a call? We’re pumping up capacity on that. We’re setting a level of quality of service we should be able to sustain”, the CEO maintained.

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Globacom to apply for new license from NCC

2011-03-29T10:12:00.000-07:00

. . . Seek to dominate Nigeria’s internet access market
Ben Uzor Jr

There are burly indications that Globacom, Second National Carrier, will obtain a new spectrum license from the Nigerian Communications Commission (NCC) by third quarter of 2011, informed sources close to the network told Business Day at the weekend. This new frequency spectrum, our sources further maintained will enable the telecom firm offer more efficient and reasonably priced broadband internet services to its teeming subscribers on its Long Term Evolution (LTE) platform. Officials of the telecom operator however declined to comment on the development when contacted.

Only recently, Globacom announced that it had launched the LTE network in Nigeria but industry watchers had doubted the telecom firms claim because suitable spectrum was yet to be issued and also because compatible devices were yet to become available in the country. A prominent industry analyst, who spoke with Business Day at the weekend, said Nigeria had failed to effectively manage its national frequency resources, stressing that it might pose a serious challenge to Globacom’s aspirations.

Our sources disclosed that Globacom was testing LTE in 30-40 locations in Lagos, with preliminary results showing that internet 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. Besides, Equipment providers have emphasised the need for effective management of the spectrum resources.

According to them, the frequency bands most suitable for deploying LTE are 700MHz and 2.6GHz.The 700MHz band is recommended for wide and rural areas, whilst 2.6GHz is said to deliver better internet speed and more effective in urban areas. But ironically, such spectrum bands are hardly in use by telecoms companies in Nigeria. According to the analyst, there is an urgent need to free up these frequency spectrum because LTE deployment will further deepen competition in the data segment of Nigeria’s highly competitive telecoms market, thus, giving Nigerians more value for their money.

This, the further analyst explained was because LTE promises to open up new revenue generating streams for telcos by enabling new capabilities well beyond traditional voice and data services. According to the analyst, the price of data and other broadband internet services, including BlackBerry (BB) subscriptions, will come down remarkably as the recent take-off of two submarine cable initiatives (Glo-One and Main One ) have continued to drive data and Internet subscription charges down.

Until recently, monthly BlackBerry charges were about N5, 000 across networks, today however, it is as low as N2, 500 and promises to go lower still. With regard to the timeline for implementation, our source confirmed that Globacom will commence roll-out of LTE services in the beginning of 2012, pointing out that modems will however be available in Q3 of 2011. 3G customers will ultimately become LTE customers, one industry analyst told BusinessDay, but warned that unless handsets are available at a cheaper rate uptake will be limited.

LTE is a revolutionary Fourth Generation Mobile Technology which enhances data transfer rates, providing unmatched mobile broadband experience. 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 LTE networks.

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Poor policy formulation, high equipment cost hinders PC Penetration

2011-03-08T11:17:00.000-08:00

• Country has 3.3 million functional computers
• Telcos, OEMs seek to perk up penetration rate

Ben Uzor Jr

The computer hardware market has remained underdeveloped due to poor policy formulation and implementation on the part of government as well as the attendant high cost of equipment acquisition in Nigeria, analysts told Business Day at the weekend. According to the analysts, inspite of the growing number of Original Equipment Manufacturers (OEMs) and resellers, along with the significant growth recorded in the telecommunications industry after the sector was successfully deregulated in 2001; there are only 3.5 million functional Personal Computer (PC) systems in the country.

In the estimations of the analysts, there are a total of 10.5 million PCs in offices, hospitals, homes and schools across the country. Business Day further gathered that only 34 percent of the total is in functioning condition, which leads to the conclusion that PCs are still uncommon in a country of 140 million people. Besides, it is imperative to stress that dependable statistics of PCs in Nigeria are difficult to get hold of because a good number organisation do not have proper documented inventories and also because of the apparent unwillingness of many to release information they consider vital.

Moreover, reliable statistics from the International Telecommunications Union (ITU) reveal that PC penetration remains very low at 7 per 1, 000 Nigerians. Analysts are optimistic that the PC market has the prospects of growing exponentially in no distant time. According to them, it will be sustained by increasing awareness levels in the population, especially the youth, spurred by education, the internet and deliberate initiatives from stakeholders. Johnson Obioma, a telecom analyst told Business Day, that the fundamental barrier to increased PC penetration was the high cost of buying equipment.

According to him, most indigenous OEMs offer affordable computing equipments, but are hindered by the prevailing high cost of doing business in Nigeria which to a large extent impacts on the quality of their equipments when compared to other foreign brands. He called on government to as a matter of exigency introduce zero tax policies for local computers manufacturers as well as an exemption on duties on the import of computers parts and accessories. With regards to price reduction, some telcos and PC manufacturers have entered into strategic alliances to offer affordable laptops to Nigerians.

Only recently, Globacom and HP introduced an innovative offering that enables Nigerians to own top-end internet-equipped netbooks. Under the special bundling offer, customers can get Glo 3G powered HP netbook for N34, 000. MTN followed suite by introducing its Internet Netbook Bundle which offers 20 percent of the purchase price of the Netbook back after 12 consecutive months of subscription to internet service from MTN. Though operators believe that the trend is very positive for the market, analysts do not think that PC penetration will suddenly shoot up on account of Telco’s resourcefulness.

Over the years, the federal government has introduced numerous PC acquisition schemes with little or no impact on PC penetration in the country. One of such initiatives was the Computer for All Nigeria Initiative (CANi), a government-private sector collaboration designed to increase computer penetration in Nigeria. The CANi scheme suffered numerous setbacks, one of which came from government agencies which still prefer to patronise foreign brands like HP, Toshiba, and Dell even when local brands like Zinox, Omatek, and Brian computers have proven just as good.

Leo Stan Ekeh, chairman, Zinox Technologies, strongly believes that governments at all levels must support indigenous computer manufacturers through policy and preferential patronage. This, he added, was if government intends to make significant headway regarding increasing the number of Nigerians who have access to PCs. “The endorsement of Zinox Computers in 2002 by the Federal Executive Council of Nigeria under President Olusegun Obasanjo…may not have created patronage but it achieved fascination for the Zinox brand. “Governments must do more than pronouncements, they must buy into the numerous marketing schemes designed to move the products to end users.

The indigenous manufacturers/assemblers must carry the governments along on these schemes. In the same vein, Tunji Balogun, chief executive officer, Brian Computers, urged to the federal government to improve their participation in the computer hardware market by making requisite funds available for indigenous OEMs. “If OEMs are empowered, it will do two things. It will reduce the cost of ownership of systems and make things easier for people to buy because we can do installmental payment over a period of time. But we cannot do that without government empowerment by talking to the banks on our behalf or empowering the banks for them to empower we local OEMs”, he added.

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New fibre initiatives pose no threat to satellite business, operators say

2011-03-04T07:24:00.001-08:00

Ben Uzor Jr

Satellite operators and resellers in Nigeria have declared that the new fibre initiatives (Main One and Glo-1) pose no threat to their existence due to the variation of services both technologies offer. This comes on the heels of heated debates amongst industry analysts that the revenue of satellite operators will dip following the growing number of submarine cable systems on the country’s shores. Fibre optics is quicker and has higher bandwidth but for long distances requires more infrastructures.

On the other hand, satellite is slower with lower bandwidth and noticeable delays. The long range capability is greater but parts of the infrastructure are expensive to replace and repair. Satellite operators told Business Day yesterday that because most of the national fibre backbones and fibre rings only run through large cities and towns, majority of Nigeria’s unserved and underserved population will get internet access through satellite communications and other wireless technologies.

Analysts who are familiar with the evolution of internet in Nigeria say that that the internet connectivity business has been dominated by satellite. This, the analysts maintained was because satellite and subsequently other wireless technologies for a long time were the only viable option in the past owing to non-availability of fibre across the country. With the boom in the telecoms industry, they noted, it became essential for operators to lay fibre to attain the high capacity required for a good voice network.

A senior executive in one of the new cable firms’ who pleaded anonymity told Business Day that satellite business will experience a severe downturn on the African continent owing to the proliferation of submarine cables initiatives. He further revealed that satellite operators in Africa have already invested huge amounts in new and replacement satellites at a time when there was already growing apathy to satellite/VSAT use. In his estimation, $4.395 billion will be invested in new and replacement satellites against $2.15 billion in seven international submarine cable systems.

“By the end of 2010, the internet submarine fibre capacity had increased by 1, 683 percent by the end of 2010. It is expected that by the end of 2011, the capacity would have increased by a whooping 3, 967 percent, which is a clear indication of the growth of fibre deployment”, he stated. For Johnson Obioma, a telecom analyst, the big transition from satellite to fibre would force satellite operators to dig deep and come up with new strategies to enable them retain market share.

More importantly, he noted that, if they are to survive, they would need to find new ways to reduce cost of access. As at today, MainOne, Glo-1 and SAT-3 sell bandwidth capacity to their customers within the range of $300 - $400 per megabyte. Lanre Ajayi, past president, Nigerian Internet Group (NIG) who spoke with BusinessDay in a telephone interview, pointed out that the emergence of these new fibre initiatives would only mean expanded business for satellite operators. According to him, satellite was extremely effective in reaching places where the volume of traffic would not justify a fibre connection.

“The tendency is to think that the submarine cables will eliminate satellite communication but it might actually expand the business of satellite in Nigeria. The truth is that fibre cannot get to everywhere. “Most of the national fibre backbones and fibre rings would run through large cities and towns. But for the rural populace, the way for them to get internet connectivity would be through satellite technology.

“This means that the emergence of these cables would only mean expanded business for satellite operators”, Ajayi posited. In the same vein, Oladapo Raji, general manager, DCC Networks, a subsidiary of Computer Warehouse Group (CWG), observed that Nigeria cannot boast of as much fibre as any of the countries in Europe and America, adding that despite the extensive use of fibre in these countries, they have very large installations on satellite and it’s growing quickly.

“If in these economies fibre does not compete with VSAT but both co-exist as compliments why should we expect the contrary in Nigeria? “Even though fibre is faster and has high capacity, its availability is very low especially in our environment where there are no proper cable ducts and infrastructure development is still massively ongoing. So in this light, the VSAT comes in as a compliment to the fibre.”

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‘Nigeria needs nationwide broadband strategy’, says Main One

2011-03-01T07:43:00.000-08:00

Ben Uzor Jr

If Nigeria intends to fully attain its economic target of been one of the top 20 economies in the world by 2020, then there is an urgent need to develop a robust broadband strategy at national level that would assist in speeding up the deployment of broadband infrastructure in order to give optimum connectivity within the country as well as transform facets of the economy that could take advantage of the internet for wealth creation, Adebayo Oyewole, head of marketing and strategy, Main One Cable, revealed.

Available data from the GSMA show that wherever there is a 10 percent growth in broadband, it translates to 2 percent growth in Gross Domestic Product (GDP) for any country. Oyewole, who spoke at a broadband forum organised by e-Business Life held in Lagos told industry stakeholders that Ghana had commenced work on its broadband strategy in 2009 which earnestly seeks to achieve 50 percent broadband penetration rate by 2015 and an 80 percent reduction in broadband cost by 2015.

According to him, affordability remains one of the fundamental reasons why so many Nigerian do not have access to broadband, further adding that Nigeria will require additional underwater cables to ensure that the vast majority of the Nigerian populace has reliable access to affordable broadband internet services. “Today, some people are basically saying well, Glo-1 cable has come in, West Africa Cable System (WACS) is coming in, some people are still on SAT-3, and MainOne cable is in town.

“Is there too much broadband capacity in Nigeria? Our response to this is no. If you look at data from the World Bank, our market penetration for every 100 inhabitant is still at about 1.9 percent for sub-Saharan Africa. When you compare 1.9 percent to 62.5 percent for every 100 inhabitants who have broadband accessibility in the United States or 60.5 percent on the average for the EU, we still have a very long way to go in terms of making broadband available and affordable for people”, he added.

In his paper presentation entitled: ‘Transforming Nigeria with Broadband Access and Connectivity’, Oyewole, pointed out that the company was the first submarine cable firm offering open access, wholesale broadband capacity in West Africa with the vision to expand the much need capacity and reduce the cost of broadband communications in Nigeria. According to him, Main One cable had transformed the wholesale bandwidth pricing structure to provide more value to customers.

Giving lucid insights into some of the trends to expect in the broadband market over the next 12 to 18 months, Oyewole said pricing will become better with the introduction of plans from Glo-1 and WACS. “Content creation from younger Nigerians will increase tremendously and it is expected that Nigeria will sustain its position with the highest number of Internet users. There would be an astronomical increase in the number of Nigerian on Facebook, Twitter, LinkedIn, etc. Nigerians will be able to download and access digital content such as music, research, training, film on You Tube at higher speeds.

“Corporates will be able to deploy more innovative solutions for their customers and see a channel shift, for example, banks will continue to see a migration to the utilization of online banking services”, the Main One executive posited. The company has developed a well-managed connectivity platform towards the realization of effective Internet telecommunications access across the continent. In addition, Main One intends to stimulate growth of key economies along the West Coast of Africa through reliable and affordable access to global information, data, resources and markets.

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NCC out with rural penetration strategy for internet services

2011-02-28T08:17:00.000-08:00

Ben Uzor Jr

The Nigerian Communications Commission (NCC) is developing a new fibre infrastructure development strategy that would see internet penetration shoot up to over 40 percent by 2015, informed sources close to the telecoms regulator told Business Day yesterday. The aim is to spread the benefits of the growing number of submarine cable systems on the country’s coastline by ensuring that more rural communities and remote areas have reliable access to reasonably priced broadband internet services.

Prior to this proposed initiative, the NCC has issued subsidies for companies and organisations to build fibre and broadband infrastructure with little or no impact in terms of deepening internet penetration. Besides, available statistics reveal that Nigeria currently has 16 million internet users. BusinessDay is reliably informed that the new infrastructure deployment plan which is based on an open access model would complement emerging cable initiatives by pushing available bandwidth capacity to the hinterland.

The ‘open access model’ is a framework for infrastructure sharing where fibre optic cable carriers share the infrastructure used in the deployment of their fibre cables. But more importantly, this model, informed sources said would be strategically designed to bridge the gaps in broadband deployment through central deployment to mid and small sized telecoms operators at subsidized pricing, thus, providing services to operators on a non-discriminatory basis.

Eugene Juwah, executive vice chairman, NCC, who spoke at broadband forum organised by e-Business Life Magazine in Lagos yesterday, said that the model would eliminate the monopoly of big companies, who fix very high prices, providing opportunity for small firms to also have access at the same price as their bigger competitor. Juwah, who was ably represented by Sylvanus Ehikioya, director, new media, NCC, noted that it would provide very light regulation in terms of access and fees to be paid.

He added: “Our strategy is to go into partnership with either state governments or local government areas, which ever authority that owns the right- of- way in that particular area, in conjunction with a technology solution provider, and together, we are going to build an infrastructure. The way we structure it is that, the technology solution provider provides funding and technology. “The state or local government provides the equity through provision of the right of way and NCC comes as a development arm of government. We are not there to make money but to subsidise and augment what the solution provider is doing. In doing so, the primary infrastructure will be build on a community based network.

For example, in an area like Apapa, we will build a number of infrastructures, in Lekki, we build one but all of them will be interconnected. This particular infrastructure will be run by licensed infrastructure providers. They are not GSM operators and when we license them to run these infrastructures; we make sure that all the service providers in the telecom sector will have access to the infrastructures on an equal basis”, the NCC EVC stated.

Amos Patrick, an industry analyst who spoke with Business Day yesterday said that the move by the NCC was indeed commendable, further adding that the immense bandwidth capacity emanating from these underwater fibre-optic cables will remain under-utilised and only serve the coastal areas, if the federal government does not encourage investment in the area of constructing national fibre and cross-border transmission backbone infrastructure.

“I believe that we need to encourage more investment in the deployment of broadband infrastructure and that would include deployment of in-land fibre networks such that it criss-crosses the length and breath of the country. This will enable majority of the Nigerian populace enjoy the full benefits of the cables coming into the country. The move by the regulator is very commendable but proper implementation of this strategy is important, if we intend to improve our internet penetration rate.”

Check out my blog: www.benedictspace.blogspot.com

Hey peeps, I got tablet fever!

2011-02-24T10:42:00.000-08:00

It’s really amazing that the tablet revolution sweeping across Europe and America is finally here in Nigeria. Trust Nija now, we no dey carry last! Excuse my language, I got carried away a little bit….Okay, back to the day’s business. After taking the world by storm and dethroning the netbook as the hottest technology device, the tablet computer now enjoys widespread use. Moreover, there are people who consider it to be the next best innovation after wine and cheese and then there are others who think of it as a frivolous waste of technology. Oopsy, did I say wine and cheese? Oh please, I am trying so hard to sound sophisticated. Perhaps, boli and epa (Roasted Plantain and groundnut) will do.

Well, that’s on a lighter note. I remember few years ago, when tiny and thin phones like the Motorola RAZR came out and became hugely popular. I felt like the forthcoming trend in cell phones was: the smaller the better. I saw movies that made fun of the tiny phones and figured that this was just the way the industry would go. I was completely wrong. Who would’ve thought that the mobile phones would just get bigger and bigger, and that we would love it that way? The year 2010, the end of a rather challenging decade saw the world’s introduction to mainstream tablet devices. They’ve been around before, but were executed poorly and nobody wanted them. But now it’s becoming a part of everyday living, and everyone who buys one seem to get addicted.

That means this obsession with tablets that started with the iPad isn’t going to stop anytime soon. It’s going to keep growing. But more importantly, other non- tablets manufacturers like Research in Motion (RIM), Motorola, and Hewlett Packard (HP) are rushing to launch their own versions. Every one is looking to get a piece of tablet PC market. Apple's iPad is however seen as a forerunner for a mass market of tablet PCs, which are lighter than netbooks and use touchscreen technology. Back home, telecommunications companies (telcos) are more than ever determined to generate revenue from the data segment of Nigeria’s highly competitive telecoms market due to steep declines in voice revenues.

What we see currently in the market are telcos going into strategic alliances with computer and tablet manufacturers to offer tablets PCs/laptops with mobile broadband connections to their teeming subscribers. The market is already agog with the new product offering in the tablet/PC space which industry watchers strongly believe would assist the country improve its digital index. Initially, it was ‘the Etisalat and Samsung connection’ but more recently MTN ‘wowed’ Nigerians again with the new Apple iPad offering …. Earlier in February, LG Electronics released the first 3D (Three Dimensional) tablet PC. Who knows? There might be another Telco, tablet PC manufacturers alliance in the making. Let’s look at some innovative tablet PC offerings in the market today.

MTN+iPad: A union made in heaven….

A perfect match, you would agree…. You favourite network is here again with an innovative solution that not only offers a unique computing experience but has the potential to challenge the primacy of the laptop. Apple has the potential to change portable computing profoundly, and to challenge the primacy of the laptop. Tech enthusiasts say it could even assist, eventually, to propel the finger-driven, multitouch user interface ahead of the mouse-driven interface that has prevailed for decades.

Enough of the techy stuff peeps; let’s get down to the real reason why we are here. What make the MTN/iPad union thick? You see, with the MTN 3.5G service, you can indeed enjoy the full strength of the iPad. Through the MTN 3.5G service, users can take full advantage of the powerful technology built into the iPad. You can connect to the web at unmatched speeds. Because MTN 3G network can power the latest web video and audio, you can enjoy the rich multimedia experience you expect from the internet.

With iPad, navigating the web has never been easier or more intuitive, because you use the most natural pointing device there is: your finger. Scroll through a page just by flicking up or down on the screen. Double-tap a section on a page to enlarge or shrink it. Or pinch to zoom in or out.

When you touch and hold a link, Safari shows you the URL so you know before you go. There’s also a handy thumbnail view that shows all your open pages in a grid, so you can quickly move from one page to the next. For N157, 000 and N141, 000, customers can get the 32G and 16G version of the iPad respectively. This offer is open to existing and new MTN Prepaid Customers only.

Etisalat/Samsung Galaxy Tab, experience the difference!

How would you like a device that opens up a world of new possibilities making you work smarter and your life delightfully easy? This is what the Samsung Galaxy Tab/ Etisalat bundle offer is giving you ….the opportunity to explore more virtual possibilities. Business or pleasure, the Samsung Galaxy Tab/ Etisalat bundle offer provides the upwardly mobile and dynamic business executive a rich data experience.

Samsung Galaxy Tab, the Android powered tablet computer is a beautiful device with a 7-inch display and thin lightweight design combined with premium content and functioning tools that deliver total effectiveness. It is truly a mobile tablet that is as comfortable to carry around in meetings as it is to use while relaxing on the couch at home. It is a perfect device for working smarter, watching movies, reading e-books, catching up on your favorite TV shows or even chatting with old friends. Plus, the Tab is sleek and appropriately sized that it would fit easily into jacket or trouser pockets.

The Galaxy Tab is bundled with a free Etisalat SIM card that comes with:
• Free monthly voice [25 minutes], Text [25 SMS] and data [250MB] bundles for a 12-month duration. The bundle is awarded on the first day of every month for 12 months beginning from the day of activation. This way, you get the feeling of availability of free services every month for 1 year.
• Free platinum 0809 special number
• Access to installmental payments and consumer loans (terms and conditions apply)

To order yours, visit any Etisalat Experience Centre or Samsung Brand Shop nearest to you or call us on 08090000200.

Starcomms MyPad: Make way for the King

The Starcomms MyPad is the first Android based tablet to be introduced into the Nigerian market by a CDMA operator. The MyPad is an innovatively designed as a high-end tablet/data device, the stylish hi-tech device is technologically crafted to support multiple and up to date data functionalities that helps the user maintain his /her high social profile, adding that besides being powered by a 2.1 Android operating system that gives the best of processing speed, the Starcomms MyPad comes with an exquisite and attractive appearance that radiates the grandeur.

With the MyPad, customers have access to innovative products and the service that keeps them in tune with technological trends. The device has embedded functional applications that will excite the user adding that some of the applications include: Skype, Yahoo, YouTube, MSN, Yahoo messenger and Facebook. Besides, there are entertainment applications for music and games with free downloadable games. It has a wider screen of 10.2 inches that offers the user excellent visibility while using the tablet.

The device, which comes with an optional branded luxury leather case carrier, has a 10-giga byte memory that can be expanded to 64-giga byte, 2 USB and LAN port, an HDMI out and a 2.0 mega pixel webcam, a user friendly manual and a battery charger. But more importantly, the MyPad offers an exciting movie experience for movie lovers as it comes with an HDMI out for connecting and downloading video to Television (TV). For Just N74, 999 customers get FREE iZap Wi-Fi Internet router + FREE 3 Months internet access.

Check out my blog: www.benedictspace.blogspot.com

Web Jurist ranks Zenith Bank, Etisalat high on customer experience

2011-02-24T10:34:00.000-08:00

. . . Effective websites essential for business growth, says Phillips Consulting
Ben Uzor Jr

It did not come as a surprise to most Information Communication Technology (ICT) savvy people as Zenith Bank Plc once again emerged the overall winner of the Web Jurist award, instituted by the website rating agency of Philip Consulting Limited. The rating is meant to check the effectiveness, aesthetics, user-friendliness and information content of various websites in the country.

Announcing the results during the Nigeria-South Africa Chamber of Commerce monthly breakfast forum in Lagos last week, Phillips Consultants, also named the Etisalat’s website as the overall best in the telecommunications industry. In this year’s survey of the seven telecoms firm’s, Etisalat Nigeria ranked high in six areas used to measure the effectiveness and efficiency of a business website.

Beyond every reasonable doubt, Zenith Bank has acquired a reputation for the deployment of cutting edge Information and Communication Technology to drive its processes. The bank’s name has featured prominently at the top of the annual web jurist survey since inception. The bank has remained consistent in the quality of service delivery via its website. Apart from being the winner in the overall website effectiveness category, the financial institution’s website also won in the following categories: Most operational site (technical aspects), most captivating site (customer experience).

Oluwaseun Ngonnase, senior consultant, technology group, Phillips Consulting, told Business Day in an exclusive interview that the web evaluation process was developed strategically for the purpose of evaluating websites to determine effectiveness through benchmarking with local and global peers. According to him, the evaluation processes would assist businesses to identify best practice, suggests improvement strategies and act as a catalyst for constructive, value-added e-business growth.

Ngonnase pointed out that businesses can better widen their market share as well as expand their customer base on a global scale by developing websites that can become a major marketing tool. He admonished businesses to leverage the power of technology, which saw ordinary ideas like Facebook, Google turn into multi-billion dollar businesses. Web-Jurist, in arriving at the rating, uses a combination of experienced e-business consultants and a rigorous and comprehensive rating methodology.

It assesses websites using six high-level categories namely, website content, user experience, performance, technical aspect, aesthetics and online service quality. Website content refers to the accuracy, freshness and presentation of the site; User experience refers to the quality of the user interface from a functional and aesthetics point of view; performance refers to the speed, reliability and findability and the ease with which all types of users, including those with physical or visual impairment, can find and access the site; technical aspect refers to the navigation, functionality and security of the site; aesthetics refers to the design principle and brand consistency of the site.

The Web-Jurist also assess the quality of the sites content in terms of spelling, grammar and case-consistency while it also assess the transactional capability of the site, as well as product quality and extent of value-added services.

Nokia provides financial forecasts linked to new strategy

2011-02-18T09:37:00.000-08:00

Nokia has outlined a new strategic direction, including changes in leadership and operational structure to accelerate the company’s speed of execution in a dynamic competitive environment. In connection with this new strategic direction, Nokia has set new financial targets and forecasts for Nokia and the mobile device industry and for Nokia Siemens Networks and the mobile and fixed infrastructure and related services market.

Targets and forecasts for Nokia and the mobile device industry

Nokia expects attractive mobile device industry revenue growth in 2011 and over the longer-term, driven by the further adoption of smartphones by consumers globally and the further adoption of mobile devices and services, particularly in emerging markets. Over the longer-term, Nokia expects mobile device industry gross margins to come under pressure due to competitive factors.

Due to the initiation of Nokia’s strategic transformation on February 11, 2011, the full-year prospects for its Devices & Services business are subject to significant uncertainties, and therefore Nokia believes it is not appropriate to provide annual targets for 2011 at the present time. However, Nokia expects to continue to provide short-term quarterly forecasts to indicate its progress in the company’s interim reports as well as annual targets when circumstances allow it to do so.

Nokia expects 2011 and 2012 to be transition years, as the company invests to build the planned winning ecosystem with Microsoft. After the transition, Nokia targets longer-term:

• Devices & Services net sales to grow faster than the market.
• Devices & Services non-IFRS* operating margin to be 10 percent or more.

Targets and forecasts for Nokia Siemens Networks and the mobile and fixed infrastructure and related services market

Nokia and Nokia Siemens Networks expect overall industry revenue to grow slightly in 2011, compared to 2010. While growth is expected in certain areas, such as mobile broadband and services, this is expected to be offset to some extent by declines in certain areas and a continued challenging competitive environment.

Due to Nokia Siemens Networks’ solid position in industry growth areas, Nokia and Nokia Siemens Networks target:
• Nokia Siemens Networks net sales to grow faster than the market in 2011.
• Nokia Siemens Networks non-IFRS* operating margin to be above breakeven in 2011.

Additionally, Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks to reduce its non-IFRS* annualized operating expenses and production overheads by EUR 500 million by the end of 2011, compared to the end of 2009.

Cost forces telecom firms to embrace equipment sharing

2010-12-22T01:41:00.000-08:00

•To trim network operating expenditure
Ben Uzor Jr

Determined to step up their game in the new business year, telecommunications companies (Telcos) have placed infrastructure sharing as top priority for 2011. Sources close to some of the networks told BusinessDay that most operators have finally found a better way of reducing the prevailing cost of doing business in Nigeria. According to the sources, the telcos intend to trim network operating expenditure, which is taking a huge toll on their profit margins, a move said to be headed in the right direction.

Analysts, who spoke with BusinessDay, affirmed that the telcos are determined to go down this path because infrastructure sharing (Collocation) allows for greater flexibility in terms of administration and implementation of services. They argued that with falling average revenue per user (ARPUs) due to heightened competition in Nigeria’s telecoms industry, operating companies are seeking to derive significant savings on capital expenditure (CAPEX) and OPEX required for site build.

This, the analysts maintained, would allow for more efficient utilisation of CAPEX to expand coverage and capacity. More importantly, scarce capital and management attention can now be diverted to key value-creating activities such as the opening up of Nigeria’s data market, which over the years, has remained untapped, the analysts noted. According to a notable industry watcher, the massive capital requirement involved in infrastructure roll out has made it quite difficult for telcos to operate profitably.
As a result, expansion plans geared towards meeting growing subscriber demands are very difficult to execute. Available statistics from the Nigerian Communications Commission (NCC) reveal that Nigeria has 84 million mobile subscriptions. Telcos have also complained at various fora about operational constraints with regard to getting approvals from local and state government authorities in the laying of transmission links such as cables, fibre and building communications towers.

Initially, telecom firms, particularly GSM operators had resisted plans by the Federal Government to make them embrace co-location to protect the environment and aesthetics of major cities in Nigeria. Former Federal Capital Territory (FCT) minister, Nasir El-Rufai had a long drawn battle with the operators in Abuja where he forced them to co-locate their equipment. However, huge operational cost has now forced them to seek for equipment use and co-location.

Undoubtedly, infrastructure sharing has become a global practice within the telecoms landscape and CDMA (Code Division Multiple Access) operator, Starcomms Plc is showing considerable leadership in this regard. Understandably, these are not the best of times for CDMAs, as a significant number of them are finding it extremely difficult to survive the stiff competition in the nation’s telecommunications industry. CDMAs have insisted that their poor performances were primarily due to the high operating cost.

Starcomms Plc recently announced that it had successfully concluded a sale and leaseback agreement with Swap Telecomms and Technologies relating to 407 of its 557 Base Station for a consideration of N12.2 billion ($81.4 million) in cash. Maher Qubain, chief executive officer, Starcomms Plc, strongly believes that leasing, rather than owning these passive infrastructure network facilities can free up capital to fund additional growth, reduce debts and operational costs in the company.

Alluding to the need for telecoms companies to adopt cutting-edge co-location models that would assist management of telecom firms focus on their core business of providing best-in-class telecoms services, Qubain revealed that $67 million of the proceeds realised from the sale will be channelled towards repayment of a sizeable portion of the company’s bank debts.

He further explained that this would significantly strengthen the balance sheet of the company and also reduce interest charges. Presently, most operators are faced with challenges that include - theft and vandalisation of equipment as well as pressure from authorities to reduce the number of towers scattered all over the country. In the estimation of analysts, sharing of such infrastructure would greatly reduce cost of operations, duplication of equipment and waste of scarce resources.

“It is incredibly important that rather than duplicate sites across the nation, it will be much more sensible if all parties were able to co-locate so that we don’t have to duplicate infrastructure. “We can also save money and reduce our costs and the cost of other operators. This will also translate to reduced costs to customers”, Steve Evans, chief executive officer, Etisalat Nigeria, maintained.

Evans, however, expressed optimism that his firm will be a leader in the area of infrastructure sharing by the end of 2011, further suggesting that all telecoms companies operating in Nigeria should aggressively implement infrastructure sharing in line with global best practices. Other telecoms companies were however rather vague on what they intend to do in the new business year with regard to infrastructure sharing. A senior executive at Helios Towers told Business Day that two GSM firms were already in talks with his organization, especially on how to initiate a sale and lease back agreement.

“I can confirm to you that we are in talks with two GSM firms on a sale and lease back deal but due to the nature of the deal, I can’t give you their names. But I assure you, telcos will embrace co-location in 2011. “Telcos will have no option but to embrace infrastructure sharing. Running of base stations constitutes a big challenge for telcos in the country. A GSM operator for instance spends an average of $5, 000 monthly to run a base station.

This expenditure include - servicing of generators, fuelling, and security among others”, a senior executive at IHS telecoms told BusinessDay. The huge financial commitment, he said, was a limitation to most providers - big or small, adding that the return on investment (ROI) is slow after huge amounts of money would have been spent on this infrastructure. He disclosed that like Swap, IHS was also working on a sale and lease deal with two telcos whose identities he declined to reveal.

It was learnt that IHS Plc and Helios Towers, two licensed infrastructure building companies together own more than 2,500 co-located sites. BusinessDay checks reveal that pioneer infrastructure building company, IHS has 1, 500 co-located sites occupied by operators whilst Helios Towers has over 1,000 of its sites already occupied.

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Nokia N8 - All hail the king of camera phones!

2010-12-16T07:32:00.000-08:00

These days, mobile phones are very personal and people use it to do lots of things other than the original purpose it was designed for, making calls. If a device can give you a higher sense of personalization, would you go for it? Well, smart phone faithful’s itching for a high-end smartphone from the stable of the world mobility leader, Nokia, need not wait any longer. The highly anticipated Nokia N8 has finally hit the Nigerian market. Besides, the N8 can be compared to the second coming of Christ, not because it’s necessarily deliverance in a phone, but because it’s taken a long time to get here.

Nokia's reputation as a leader in the smartphone market has come under increasing pressure in recent years, as a string of 'high end' handsets have failed to capture the minds and wallets of the phone-buying public. To address this challenge, Nokia went back to the drawing board and came up with the N8, featuring a new OS (Operating System) and a huge amount of high end tech packed under the hood. It is expected that the device will restore Nokia’s standing as a serious player in the smartphone market.

With the N8, and the new Symbian software, Nokia is bringing a familiar, faster and more intuitive user experience to the world’s most popular smartphone platform. Moreover, the Nokia N8 has received the highest amount of consumer pre-orders in Nokia history and Nokia says it is thrilled that the wide acceptance the device is getting globally. The first of a series of smartphone based on the new Symbian, the N8 is fast and easy to use and supports true multitasking, allowing users to run multiple apps simultaneously and switch between them easily.

Dubbed the world’s best camera phone, the Nokia N8 lets you take the highest quality photos and shoot HD (High Definition) -quality videos in supreme clarity with the 12-megapixel camera with Carl Zeiss optics. You can edit photos and videos on-screen and choose from multiple ways to share them; transfer large files to an external hard drive with USB-on-the-go, or upload photos to social networks like Facebook, Twitter straight from the homescreen. All this is delivered in a robust aluminum body in a range of vibrant colours with a real-glass 3.5” AMOLED display. The Nokia N8 has a black belt in entertainment. Its Web Television (TV) apps from channels like E! Entertainment, National Geographic and CNN and the intuitive music player inject an element of fun into idle moments.

Plug the device to the home entertainment centre to watch HD-quality videos from the big screen with full Dolby Digital Plus Surround Sound. The latest version of Ovi Store, available first on the Nokia N8, gives easy access to more apps – from social networking services like Foursquare to games like Need for Speed Shift or productivity apps like Tesco in the United Kingdom (UK). Like other Nokia smartphone, the Nokia N8 comes with free Ovi Maps walk & drive navigation in more than 70 countries worldwide, with no hidden costs. The latest beta release of Ovi Maps is also available for transport in 85 cities around the world, as well as real-time traffic, safety and speed limit warnings.

Here’s what I think about this very amazing device. N8 feels lightweight, yet sturdy in hands. N8 gives superb and attractive looks to its users. The hardware button lets you switch between the home screen and menu screen and when held down, shows you all of your open applications. If you want to purchase a new mobile phone, then N8 is the best deal for you. I am impressed with its slick hardware and superb multimedia features. That’s not to say I am Nokia sales person, peeps, I am just in love with the N8.

Design
If there is one thing different about Nokia N8, it's certainly the way it looks. The smartphone is quite a sight for sore eyes. Nokia used an anodized aluminum alloy that gives the phone a solid look. To make it feel even better, the phone doesn't have a battery cover. That means that you will never be able to pull out the battery unless you shred it to pieces, literally. The generous 3.5-inch touchscreen display takes hold of the entire front part of the device.

Just above the screen there's a secondary video-call camera and an ambient light sensor, while at the bottom there's a small mic. All three standard Symbian keys have been replaced by a single button, which was placed a little to the left. That makes it a little bit awkward to reach when you keep the phone with your right hand, but it's perfectly usable for a left handed person. The top side of the phone features a 3.5mm audio jack port, a HDMI port, as well as the usual power off button. The charging port has been placed on the bottom side of the phone.

Display
Nokia N8 comes with an AMOLED 3.5-inch capacitive touchscreen that supports 16 Million colors and 360 x 640-pixels resolution. This is the second Nokia phone to include a capacitive touchscreen, after Nokia X6, which was released on the market at the end of 2009. Even though it's a capacitive display it cannot be compared with Samsung's Super AMOLED displays. The image shows high quality, but I had some troubles when I tried to use it outdoors in sunlight.

The screen is covered by scratch resistant Gorilla glass, which makes it almost unbreakable. Oh, well, not quite, but at least it won't scratch when kept in your pocket with other metallic items. The phone also features built-in accelerometer for display auto-rotation, multi-touch input method, as well as proximity sensor for auto turn-off.

Camera
The 12-megapixel camera of N8 features autofocus, mechanical shutter, Xenon flash, geo-tagging and a pretty standard interface. Nokia has partnered with Carl Zeiss for this one, so you will get Carl Zeiss optics. Other notable features include: 1/1.83-inch sensor size, ND filter, and face detection feature. The camera UI is its only downside, as it seems old and obsolete, but you will be getting the usual settings: White balance, ISO, Colors, Contrast, Sharpness and Scene modes.

One of the main reasons that make Nokia N8 the best camera phone is the embedded 1/1.83-inch sensor, which is bigger than Samsung Pixon's 1/2.5" sensor, previously known as the best camera-phone on the market. Furthermore, another interesting thing is the processing software of the camera, which barely interferes with the pictures. Even though this should be translated in more noisy picture, unresolved detail and/or color degradation.

Communication
Nokia N8 is a quad-band GSM (850 / 900 / 1800 / 1900) handset, HSDPA 850 / 900 / 1700 / 1900 / 2100 (10.2 Mbps) compatible, which features GPRS class 33, EDGE class 33. The smartphone is a real “swiss knife” when it comes to connectivity. It has all the possible tools that one would need on the go. Wi-Fi 802.11 b/g/n, UPnP technology, Bluetooth 3.0 with A2DP, microUSB v2.0, USB On-the-go support, HSDPA, 10.2 Mbps, HSUPA 2.0 Mbps offer users enough connectivity options for any budget.

The USB On-the-go feature is extremely useful, especially if you're an active person who likes to travel a lot. Basically, you will be able to attach an USB stick to the phone, or even connect another compatible smartphone directly to the N8 through an USB cable. There's no list of the compatible phones, but most Nokia phone will work, while others like Motorola Milestone won't. I was surprised to be able to connect a Samsung Galaxy S device to the Nokia N8 through the micro USB cable.

The integrated browser is the same that you can get in the older N97, but got small improvements and bug fixes. It has now full Flash Lite 4.0 support, kinetic scrolling and pinch to zoom. Other features included in the browser: auto fill-in, RSS reader, download manager, password manager, pop-up blocker. The device features a GPS receiver, which works in conjunction with Ovi Maps 3.0 Touch.

Processor and Memory
Nokia N8 is powered by and ARM11 family processor running at speeds of up to 680 MHz, and also includes a 3D Graphics HW accelerator. The device works pretty smooth, without having the usual hiccups and lags when the web browser was running in the background. The smartphone also features 16GB internal memory, as well as 256 MB RAM and 512 MB ROM. The memory can be expanded up to 32GB, thanks to the hot-swappable card slot.

Multimedia
The smartphone features a newly designed good looking music player, which is now including a Cover-flow album art feature. The rest of the settings are also there, such as: pre-installed equalizer modes (Bass booster, Classical, Jazz, Pop and Rock), Balance, Loudness and Stereo widening. Sound quality is simply exceptional, so N8 can be used as a music phone with no problems at all.

The device features Radio FM with RDS function, as well as a FM transmitter. Reception is very good, and sound is above average. The Bluetooth 3.0 with A2DP support enables you to listen to music wirelessly. The included video player comes with DivX and XviD codecs, but it won't display subtitles.

This is one of the new things that you get with the device. Add to that the HDMI port and you get yourself a real portable multimedia studio. I only got one “System error” message after running about 5-6 short trailer movie, but I would put it on the fact that my unit was a test sample. All in all, Nokia N8 includes stellar multimedia features, so customers have one more reason to try it out besides the excellent camera.

Menu and Software
The N8 is the first Nokia smartphone released that runs Symbian ^3 operating system. If you're expecting innovations or amazing new things, then you will be very disappointed. Lack of time or ideas made Nokia engineers continue the Symbian project, which turned in the end in Symbian ^3, which is still far from its main competitors, Android and iOS.

At first glance, one can notice the main homescreen, which is now stretched on three panes. Users will now be able to use any of the three homescreens to add widgets, shortcuts, contacts, or favorite websites. The interface is now a little bit faster during browsing and more responsive. The latter is due to the removal of the “touch-to-select-touch-again-to-open” approach, that was specific to all Nokia touchscreen phones. Unfortunately, there are a lot of things that are not user-friendly or intuitive, but I should probably overlook it as this is Nokia's first try on Symbian ^3.

The same block-like layout for the homescreen had been implemented, so if you want to add contacts, widgets and other stuff, you can only do it in the form of block. You can change between them or remove them with ease, by tapping and holding on any of them. Kinetic scrolling is also present, so you'll be able to scroll much faster. Clicking near the battery icon, on the upper right corner of the homescreen will give you quick access to the clock, alarms, while by clicking on the connection icon you'll be able to get to connectivity settings.

Battery

The 1,200 mAh Li-Ion (BL-4D) battery has an officially stated life expectancy of 390 hours in standby (400 for 3G) and of about 12 hours and 30 minutes in talk time mode (5 hours and 30 minutes for 3G).The manufacturer also states that the smartphone's battery should last about 50 hours of continuous music playback. Unfortunately, I noticed big gaps between the real numbers and the official ones.

The phone's battery is draining fast when the phone is used mildly, and I had to charge it 3-4 times per week. I hope this will be corrected in a future update, because the device is suffering from the same low-battery life issue like Nokia N97. Add to that the fact that the smartphone includes a non-replaceable battery, which means there's no way you can buy another one.

Hardware
The Nokia N8 feels great in your hand. It’s mostly made from anodized aluminum which comes in vibrant colors. The chrome accents around the camera lens, camera button, and volume controls get the thumbs up too. There are no wiggly parts and the buttons all feel solid. As expected, the hardware design is top-notch. The build quality is excellent, too. The screen is made of gorilla glass which is damage and scratch resistant. I tried scratching the display with my keys using a lot of force and did not notice any effect. The Nokia N8 isn’t the thinnest phone in the world, but it sits comfortably in the pocket. It measures 113.5 x 59 x 12.9 mm and weighs 135g.

Internals
Inside the Nokia N8 is an ARM 11 microprocessor clocked at 680 MHz with 256MB RAM. All the latest Symbian^3 devices such as the C7, E7, and C6-01 have the same CPU and RAM. This is an increase from previous Nokia devices, but not as high as the numbers featured in the latest devices from other manufacturers such as HTC, Samsung, or Motorola. Some would argue that Symbian has better memory and CPU management compared to other smartphone OS out there and I have to agree. I haven’t seen any memory full messages, but I wouldn’t exactly say the Nokia N8 as a speedy device. It zips through menus, photos, and apps, but the app that’s not very fast is an important one: the web browser.

The Camera
The Nokia N8 is a photographer’s dream phone. The images it produces are awesome and it’s really quick to share what you capture. The cameras on Nokia Nseries devices have always been ahead of the competition, but the Nokia N8 really shines. Nokia combined the largest sensor ever put into a mobile for incredible detail with Carl Zeiss optics and a hands-off attitude with imaging software to produce really natural photos.

Speakers
Call quality is loud and clear on all the calls I’ve placed and received. Listening to music, the speakers are reasonably loud and have nothing to complain about. The location of the loudspeaker is at the back of the phone. That seems to be the favorite spot for new devices even from other manufacturers.

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Cyber criminals invade West African countries, says EFCC

2010-12-13T05:52:00.000-08:00

. . . Region plans to harmonise cybercrime legislation by 2011
Ben Uzor Jr

Nigerian cyber criminals, fleeing from the heightened surveillance and crackdown from the anti-graft agency - the Economic and Financial Crimes Commission (EFCC), have moved en mass to other West African countries. This mass exodus of the cyber criminals to neighbouring countries was confirmed to BusinessDay by Farida Waziri, chairman of the EFCC, in an exclusive interview in Abuja.

Waziri told BusinessDay the development was disturbing and that Nigeria would not allow a few misguided individuals running from the law to cause undue hardship to its neighbours. Total loss from all referred cases globally was $559.7 million in 2009. This is up from the $264.6million in total reported losses in 2008, according to the 2009 Internet Crime Report.

To help the agency and its counterparts in West Africa win the war against the criminals, Waziri said governments in the sub-region must, as a matter of expediency, begin to adopt common measures for combating cyber crime. The measures, the anti-graft czar noted, should include the establishment and harmonisation of legislation on cyber crime and electronic evidence throughout the region.

Sources close to the secretariat of the Economic Community of West African States (ECOWAS) informed Business Day that plans in this direction were already underway and by June 2011, legislation on cyber crime will be approved by all presidents in the sub-region.“We have noticed a movement of cyber criminals from Nigeria to neighbouring West African states, and it is important that political leadership all through West Africa adopt common measures and strategies for combating cyber crime.

“We must continue to collaborate to evolve common strategies that are beneficial to the sub-region. Today, Nigeria and Ghana are within the top 10 global cyber crime index. Our goal is to ensure that West African countries drop out of the top 10,” Waziri told BusinessDay. She argued that while the growing number of underwater cable systems on the West African coast will spring up new business opportunities, as well as improve the region’s digital index, “it could also expose the sub-region to increased cyber crimes as new sophisticated computer fraud schemes will emerge rapidly,” Waziri declared.

Cyber crime is acknowledged to be on the increase globally, and the Internet Crime Complaint Centre has recorded a 22 percent increase in criminal activities between 2008 and 2009. This, it is believed, could be because more people have access to the internet. “What should be frightening for us is that only about 20 percent of the West African population has access to internet connectivity and it may well mean that if we have the level of connectivity of Europe and North America, we will perpetually remain in the top 10. The challenge for West Africa is how to put in place remedial measures that will ensure that with higher connectivity, crime does not necessarily follow suit,” she said.

Commenting on some of the critical milestones the Commission has achieved with regard to addressing the menace of cyber crime, the EFCC boss stressed, at the first West African Cyber crime Conference held in Abuja, that since the inception of the Commission, the EFCC had secured over 300 convictions in cyber crime while there are over 500 cases pending before various courts across the country. “We have recently set up the Transaction Clearance Platform and within a year, it has stopped over 3, 000 cyber crimes and advised over 400, 000 potential victims,” she explained.

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Airtel fires fresh shot as price war heats up

2010-12-06T10:40:00.000-08:00

…Crashes network calls to N9 per minute
Ben Uzor Jr

In the coming weeks, Nigeria’s highly competitive telecommunications market will witness sweeping squeeze in call-rate prices following Airtel Nigeria’s move to crash prices of mobile phone talk-time to as low as N9 per minute from the current industry rate averaging N35 to N42 per minute across networks.

This move comes barely two weeks after new owners, Bharti, acquired a substantial percentage of Celtel’s shares and re-branded in line with its mother company. Rival firms were non-committal about what kind of response would be forthcoming but analysts say they see a huge specter of price war looming with Airtel’s unexpected move. Analysts view Airtel’s move as strategic for market share as it intends to invite new subscribers on to its network and wrestle existing ones from competing networks.

This, of course, will boost revenue in the long run as Airtel will enjoy better economies of scale through reduced cost per unit of delivering services as volume increases. “This move is in line with Bharti Airtel’s promise to Nigerians to give them affordable telecommunications services. We are indeed fulfilling that promise and we expect more Nigerians to come aboard Airtel”, a senior Airtel executive told Business Day in an interview yesterday.

Bharti Airtel, who took over mobile operations in 15 African countries in a deal that makes it the world’s fifth-biggest mobile company with 180 million customers in 18 countries, is known for its low-cost strategy which has made it India’s market leader. In India, the company’s call rate charges are as low as 1US cents as against the 20US cents charged in Nigeria currently.

The new owners, analysts say, are aiming basically to squeeze the current leadership of the market and this could force a new price war that has the potential of revolutionising GSM usage in the country.
In the past four months, innovative promotional schemes from telecom companies (telcos) have reduced prices of voice calls and internet download access by 50 percent.

The internet download price slash has forced prices down to as low as N3, 000 from N10, 000 in less than three months with MTN leading the slash race. Industry experts believe the price will in no time drop to levels comparable to UK charges which is currently about N1, 250 or 5 UK pounds sterling. Industry analysts thus strongly believe that the move by Bharti will force other operators to further review their present voice call rate in order to stay competitive.

Some analysts are however skeptical about the Airtel’s price strategy. “In my opinion, I don’t think N9 per minute will be profitable for them considering the current interconnect rate. As you know, the difference between the price of voice call and the interconnect rate is what makes them profitable. So, for instance, if the current interconnect rate is N10.12 and they intend to offer N9, then it makes no sense business wise. I believe this price reduction will be for on-net calls and not for off-net call”, one analyst who pleaded anonymity told BusinessDay.

Recently, Ernest Ndukwe, past executive vice chairman, Nigerian Communications Commission (NCC), told a gathering of Information Communication Technology (ICT) stakeholders that the Commission had laid the foundation for tariff reduction with the issuance of a new interconnect regime in December 2009. Interconnection rate represents the rate which a telecommunications operator who originates a call pays to another operator on whose network a call is terminated.

“I have continued to see tariff drop since the last exercise with respect to interconnect rates. Going forward, prices will continue to fall because we have always insisted that more competition will affect tariffs in a positive way”. It would be recalled that in August, MTN Nigeria floated a new set of value added propositions which featured product offerings that allow customers enjoy more call time at a highly reduced cost across its market segments, causing increased competition among telecom players.

For instance, customers on MTN Smartlink will enjoy retrogressive tariff plan which allows the customer to pay less for more time spent calling; voice call price could then fall to as low as 25 kobo/second from a peak 50 kobo, a whopping reduction of 50 percent.

In a swift reaction to the earlier strategic move by MTN which enticed teeming subscribers to its network with its new tariff plan (MTN Funlink, Smartlink, Prolink, Bizlink and Happilink), the fifth licensed GSM operator, Etisalat Nigeria, introduced a new tariff plan that allows subscribers enjoy lower rates of 25 kobo per second for voice calls from a peak of 50 kobo per second.

The unique selling point of the value proposition is that subscribers could make calls to anyone regardless of time, network or even location. National operator, Globacom, launched a package in Port Harcourt that enables telecoms subscribers pay 25 kobo per second for all calls to any network in the country without any rental or access fee. In addition, the package, ‘Glo Infinito’ offers free midnight calls from 12 midnight to 5a.m as well as a bonus of between 10 percent and 20 percent for every recharge with N500 and higher.

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Nigeria will make or mar Bharti Airtel in Africa, says Mittal

2010-11-22T06:47:00.001-08:00

. . . Zain finally dissolves into Airtel
Ben Uzor Jr

Going by Nigeria’s position as the largest telecommunications market in Africa boasting of over 80 million mobile subscriptions, Sunil Bharti Mittal, chairman and group chief executive officer, Bharti Enterprises has stated that the success of his firm in the continent was dependent on Nigeria. Mittal who disclosed this on Friday in Lagos at the unveiling of the firm’s new identity across 16 countries in Africa, promised to deliver high quality customer benefits through the power of the global Airtel brand.

With the unveiling of the new brand identity Airtel becomes the master brand for all the group’s 19 operations in Asia and Africa covering over 200 million customers. In Africa, Airtel replaces the Zain brand and comes with the promise of delivering high quality customer benefits through the power of global Airtel brand. Earlier this year, Bharti Airtel, fifth largest telecoms company in the world acquired Zain assets across Africa earlier this year for $10 billion.

Going forward, all future new products and services will follow the Airtel brand structure. The ZAP mobile money service will be re-branded Airtel Money with immediate effect. “Nigeria is our second largest market after India. Nigeria will make or break Airtel in Africa. This is because Nigeria is the critical key for our success here. I will like to make one commitment and one request. Let me talk about the commitment first, we will make a big difference to the way this country communicates.”

“Our passion to win in the market place has not dimmed on bit. Infact, we are fired up when we see competitors who are already dominant, who are very big, it spurs us to do something special. I and the entire management of Airtel and our worthy partners, watch us and see what we will do. My request is that you embrace us, you adopt us, and this is a good brand. One thing I want to be remembered for is that this company was good for Nigeria, it was good for Africa and it was good for the human race”.

The new Airtel brand was also unveiled in Abuja at the weekend, in the presence of Nigeria’s President Goodluck Jonathan and Mittal. At the event in Abuja, Mittal, said that the company began its African journey by promising to deliver world-class and affordable mobile services to customers and delighting them with innovative products. “I believe we are taking a major step towards delivering on this by introducing the heart of our business - the Airtel brand - across our operations in Africa. “Our African customers will now be able to enjoy the same best-in-class brand experience as our customers across India, Sri Lanka and Bangladesh. “We remain committed to taking our network deeper into Africa, ensuring our services touch the common man and bridge the digital divide in the continent.

“I am confident that over the coming years Airtel will win the hearts of customers across Africa and emerge as one of most admired brands of the continent”, he explained. According to the company, the “new Airtel brand comes with a promise to meet the emerging needs of customers with innovative, affordable and relevant solutions to empower consumers, giving them the freedom to do what they choose and provide them with the tools to meet life’s daily challenges.

As part of the celebration of unveiling the new brand, Airtel also announced the launch of a new ultra low cost handset package which effectively provides a mobile phone free of charge to all new subscribers. The package, launched in conjunction with Nokia, will be priced at approx N 3,500 (USD $23) and includes a brand new Nokia 1280 mobile phone, a free SIM card and the equivalent value in free Airtel talk time and SMS text messages.

In addition, Airtel promises to launch a number of leading product innovations which focus on delivering relevant information for customers to enhance their quality of life and provide tools that will help them overcome their daily challenges. In the past four months, Airtel has already made tariff interventions in 11 of its 16 markets in Africa for the benefit of its customers. The firm has also signed agreements to extend its networks to the most remote areas which are still not connected with the outside world.

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Competition forces telcos to reduce tariff on data services

2010-11-19T05:31:00.000-08:00

•Internet users in for good times
Ben Uzor Jr

Going by the increasing number of undersea cables coming into Nigeria, both finance and market watchers say the nation’s highly competitive telecommunications market appears poised for a tariff war. Speaking on the development, which they already estimate will spur exciting times for internet users in the country; they told BusinessDay that most operators are spurred by the prospect of boosting revenue from internet services as voice tariffs continue to fall.

To this effect, data services has now emerged as the new ‘competition war front’ for telecoms firms. Since the liberalisation of the telecoms sector in 2001, internet access market has remained untapped while voice services thrived. For years, and until the last few weeks, the only cable system serving Nigeria’s internet needs was the South Atlantic 3/West Africa Submarine Cable - a submarine communications cable linking Portugal and Spain to South Africa, with connections to several West African countries along the route.

MainOne cable and Glo-1 have already commenced commercial services. Equally, the West African Cable System (WACS) - an initiative of nine countries (including Nigeria’s MTN Group), which comes with a high capacity submarine cable system linking Europe, West Africa and South Africa is, at the moment, under construction. Analysts who spoke with BusinessDay confirmed that some telcos are already taking advantage of the enormous bandwidth on offer from these new cable systems to lower internet tariffs, strengthen existing services and produce new solutions that promise to transform the economy.

Leading the pack in the area of pricing, meanwhile, is MTN Nigeria which has reduced its monthly Blackberry Internet Service (BIS) tariffs from N5, 000 to N3, 000. This thus rates it as the cheapest in Nigeria currently. According to Kenneth Omeruo, an internet analyst, for other telcos to stay competitive, they will have to lower their respective BIS tariffs.

This, he noted, will translate into more Nigerians getting connected to the internet at international broadband speeds and at more affordable prices. However, in a swift response, second national operator, Globacom, which has its own self-feeding submarine cable - ‘the Glo-1’, has also reduced the price of its 3G internet service by 25 percent. Now, Globacom’s internet subscribers can enjoy data limits of 6GB on its ‘Always Max Package’ for only N7, 500 from the previous price of N10, 000. Moreover, insider sources disclose that Zain is also making plans to introduce a new promotional package that would see BIS tariffs fall to as low as N1, 500 monthly.

Some GSM operators have also introduced new bundled product offering, with the pay- off being free internet service. Only recently, Etisalat and Samsung launched the Samsung Galaxy Tab, a new smart device that allows users to enjoy PC (Personal Computer) like web browsing, e-mail-on-the-go with an optimised user interface. The Tab comes with an Etisalat SIM card which offers 25 minutes of free voice calls, 25 free SMS and more importantly, 250 MB of free internet access every month for one year.

Similarly, Globacom and leading technology solutions provider, Hewlett-Packard (HP), have introduced an innovative offering that enables Nigerians to own top-end internet-equipped netbooks. Under the special bundling offer, customers can get Glo 3G powered HP netbook for N34, 000. Without doubt, data services have become the next frontier in Nigeria’s telecoms industry even as the voice segment reaches saturation point, analysts have submitted. They added that telcos would however have to pay keen attention to data services as a new revenue generating stream.

The analysts believe that even as telcos focus more on internet services due to the proliferation of submarine cables, the cost of internet access will continue to drop significantly as more bandwidth capacity becomes readily available to the market. Lanre Ajayi, president, Nigerian Internet Group (NIG), who spoke with BusinessDay at the weekend, said: “Telecoms operators are increasingly paying attention to the internet. The reason for this is that voice services is reaching saturation point. They are looking at data as a new revenue generating stream. This is also why they have rolled out their 3G and GPRS services to their customers.

What we are seeing today is not surprising to me. We are witnessing the effect of having more than one submarine cable in the country. With three cables fully active in the country, there is an abundance of bandwidth capacity available to telecoms operators. They have no options but to offer innovative data services to their subscribers at lower costs. The trend will continue and we hope when other cables berth on the country’s shores, the cost of internet access will become even more affordable and improve Nigeria’s digital index and internet penetration rate,” the NIG boss noted further.

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Mobitel re-enters telecoms market with 4G wireless broadband service

2010-10-28T11:41:00.000-07:00

•Promises better services, to invest $350m in two years
Ben Uzor Jr

Nigeria’s data market, characterised by slow and exasperating access to the cyberspace, will soon experience a shift for good in the area of service delivery as Mobitel Nigeria Limited, Tuesday, re-entered the nation’s telecommunications industry with a promise to further deepen Nigeria’s digital index through the provision of its latest fourth generation (4G)/WiMAX wireless broadband services.

4G refers to the fourth generation of cellular wireless standards and is a successor to 3G and 2G families of standards. With this wireless broadband service that boasts of speed 10 times faster than available 3G services, Mobitel has guaranteed to provide the nation’s telecoms consumers with widespread all-IP (Internet Protocol) based services such as high quality multimedia streaming, enhanced gaming services, super fast broadband internet access, IP telephony, among other services.

Though 4G wireless technology is not yet established to have an agreed set of standards, as it is still undergoing trials and testing globally, industry analysts say the launch of the 4G/WiMAX wireless services by Mobitel could assist the industry to potentially get ahead of many markets, thus putting Nigeria on the fore rather than playing catch-up. According to some industry experts, it could also help the company gain significant market share as competition thickens in the country’s telecoms landscape.

As at today, Nigeria’s digital index stands at about 4 percent, hence, industry stakeholders who attended the launch in Lagos all agreed that the introduction of this service would radically improve quality of service as it relates to internet service delivery. In March 2010, Mobitel acquired a 2.3GHz licence from the Nigerian Communications Commission (NCC), and with this launch, becomes one of the first providers of ‘real broadband’ in Nigeria.

Johnson Salako, chief executive officer, Mobitel, who spoke to newsmen at the unveiling event, disclosed that by investing over $70 million in the roll-out of the new service, the company was ready to deliver on its value proposition of providing ‘real broadband’ to Nigerians. Salako further revealed that the company would invest $350 million in the next two years on its national roll-out plan.

“Our mission is to deliver the best customer experience in all aspects of telecommunication service delivery as Africa’s most successful 4G network,” Salako told industry stakeholders who included Ernest Ndukwe, past executive vice chairman, NCC, Ibrahim Nakande, former minister of state for communications, Dave Salako, chairman, house committee on communications, Okechukwu Itanyi, executive commissioner, NCC, Funke Opeke, chief executive officer, MainOne Cable, among others.

Giving insight into the company’s national roll-out plans, Tomi Davis, chief operating officer, Mobitel, said: “We have already started with coverage in Lagos which we expect to be fully 4G before year-end, and the rest of Nigeria can expect to see Mobitel 4G Access delivered to them next year. By the middle of 2011, 11 more cities will get 4G coverage and by 2012, full national coverage will be achieved,” noting that the firm would focus on rural telephony.

In the same vein, Michele Scanlon, chief commercial officer, Mobitel, indicated that Mobitel will be launching cutting edge devices and service packages that push the boundary, in performance terms, to deliver an enhanced experience to customers. With speeds of up to 2,048 kbps available to customers on its network, Mobitel’s 4G Access gives customers the capability to transfer large amounts of data in seconds, listen to music and watch video from internet websites comfortably.

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GSM operators shy away from CDMA acquisitions

2010-10-28T11:39:00.000-07:00

•Prefer internal organic growth to M&A
Ben Uzor Jr

Indications are that the much anticipated consolidation in Nigeria’s telecommunications industry will not take place anytime soon as major GSM operators are increasingly shying away from mergers and acquisitions (M&A), and paying more attention to improving internal organic growth, analysts said. Most GSM operators, according to analysts, note that growth generated internally frequently result in better returns on investment (ROI) and lowers employee turnover as opposed to acquisition.

Industry analysts had earlier disclosed that a spate of hushed mergers and acquisitions moves was going on in Nigeria’s telecoms space, as the small operators struggle to acquire the critical mass necessary for survival, and bigger ones strive to acquire the small and move to positions of greater strength. Industry analysts who spoke to BusinessDay at the weekend strongly believe that by consolidating the CDMA landscape, GSM operators would be better positioned to offer more efficient data services whilst their core network would be used solely for the delivery voice services.

“GSM and CDMA are going to end up on a new technology called Long Term Evolution (LTE). In a couple of years, we would see a full scale commercial implementation of LTE. So, if you are going to have a convergence, we are gradually moving to technology neutrality or, if you like, interoperability of devices, networks, and so on. This is the time for a major GSM operator to begin to look at consolidating the CDMA sphere because it just adds value. Now, CDMA is the best technology for data service. GSM, as a basic technology, is very good for voice. GSM has to be upgraded to GPRS, EDGE to begin to do data.

CDMA in its basic form, CDMA 20001X, already does internet very well. Invariably, if you take the entire spectrum that we have on the CDMA area in Nigeria and dedicate it to data, then leave your GSM spectrum to voice only, I think you will see a lot of efficiency in that”, Aigbinode told BusinessDay in an interview. A senior executive of a GSM firm told BusinessDay at the weekend that CDMAs offer very little value to a GSM company. “For us, it is better to spend the money for acquisitions on improving internal organic growth. It is better to invest that money on rural network expansion and roll out new products and services because we can get better returns on our investment”, he added.

But another analyst argued that with the enormous bandwidth capacity coming from the Glo-1 and MainOne submarine cables, GSM operators may have no need for CDMAs to offer better data services. They further expound that the poor financial results of most CDMA operators have made CDMAs unattractive and reduced the prospects of M&A in the telecoms industry.

According to the analysts, the poor performances were a vivid manifestation of the protracted growth crisis in the CDMA market. In spite of the fact that CDMA operators pioneered the telecom revolution after the telecom sector was liberalised and deregulated in 2001, CDMA operators have failed to dominate the market. Over the years, their anecdote has been that of poor performances, low capital and weak competitiveness in the country’s GSM dominated telecoms landscape.

Starcomms, Multilinks-Telkom, Visafone and ZOOMmobile are the CDMA firms operating in Nigeria’s telecoms industry. Between January and July, CDMA operators in Nigeria lost about 1.08 million active subscribers. Subscriber information made available by the Nigerian Communications Commission (NCC) covering December 2009 to July 2010 shows that active mobile CDMA lines, which stood at 7.7 million in January 2010 dropped to a dismal 6.6 million lines by July.

Under the Ernest Ndukwe administration, the Nigerian Communications Commission (NCC) had admitted that some telecoms companies had begun to show disturbing signs of distress. The NCC disclosed that issues revolving around poor corporate governance, wrong business decisions, and the management style employed by these telcos in the economic crisis were some of the major factors responsible for the poor performances recorded by some of them.

Giving more insight into some of the reasons why CDMA networks have continued to perform poorly, Oladipupo Alabi, treasurer, Association of Licensed Telecommunications Operators of Nigeria (ALTON), a telecoms engineer, noted that the greatest problem facing the CDMA networks was funding. Alabi said: “The greatest problem confronting the CDMA companies in Nigeria is funding. The CDMAs are not as highly capitalised as the GSM operators. So, they do not have the same level of coverage or reach.

Also, the ease to change from one network to the other gives GSM operators an edge, whereas, the CDMAs have to buy handsets and subsidise them. This adds to their costs of operation. If a handset is faulty, GSM subscribers can easily buy another handset and swap their SIMs, but for CDMA subscribers, it is not like that. Most times, subscribers have to buy new handsets and re-programme their old numbers. That is one of the reasons why CDMA is not really growing”.

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Telcos move to provide affordable telecoms services in rural communities

2010-10-28T11:38:00.000-07:00

Ben Uzor Jr

More rural communities in the country will have access to reasonably priced telecommunications services by 2012, as operators are making significant investment in rural network expansion, and taking advantage of submarine cable infrastructure to ensure that remote areas benefit from the GSM (Global System for Mobile Communications) revolution, analysts told BusinessDay.

Available statistics show that about 40 million Nigerians living in the rural areas do not have access to basic telecoms services. Industry analysts told BusinessDay that Nigeria’s digital divide is still wide even with the country’s 80 million active mobile subscribers. According to the analysts, rural dwellers desire to be connected to the rest of the world but have no telecoms facilities to do so.

Telecoms service providers do not consider such areas as economically viable and therefore give them no attention. To this effect, a significant proportion of the country’s rural populace have, before now, been ignored in the telecoms revolution which had operators focused on cities for quick returns on their investment, analysts argue. This trend is changing with the commercial launch of Glo-1 and MainOne submarine cables, according to analysts who also said this development will usher in a new era of telephone and internet access in the rural areas.

Lanre Ajayi, president, Nigerian Internet Group (NIG) told BusinessDay: “Telecoms companies are looking at rural areas because the urban areas are more or less saturated. The phase of expansion will be the unserved and underserved areas. It has not come as a surprise to me because if they have succeeded in covering the urban areas and cities, the next logical step will be to address the rural areas”.

Globacom, owners of Glo-1, disclosed plans to leverage its massive 10, 000 kilometre national optic fibre backbone to push available bandwidth capacity to the hinterlands at more affordable rates. Besides, the country’s bandwidth market is expected to witness explosive price wars as a result of heightened competition in the submarine cable market. It is further expected that the price of bandwidth will fall from $2, 400 to $10 per megabyte as the number of submarine cables increases.

Currently, MainOne cable is already bringing down existing pricing model through the reduction of communications cost by 50 percent. Prior to MainOne’s commencement of commercial service in July 2010, BusinessDay gathered that the cost of bandwidth was between $1, 200 and $1, 700 per megabyte, but it has drastically reduced to the range of $500 to $700 at the moment.

Similarly, the West African Cable System (WACS) - an initiative operated by nine countries (including Nigeria’s MTN Group), intends to adopt an aggressive entry strategy that would see prices of bandwidth fall as low as $10 per megabyte in Nigeria, informed sources told BusinessDay. Mike Adenuga Jr, chairman, Globacom, at the launch of Glo-1 submarine cable in Lagos, said: “Today, I really feel excited because we are looking at a major step change in Nigeria.

“I promise you, things are never going to be the same again because now, the Glo-1 submarine cable has arrived and we can now connect it to our 10, 000km in-land fibre optic network. This is the time we can now provide our country and its rural populace with clearer lines as well as high quality internet services to any international destination at really affordable prices”. In the same way, MTN Nigeria and Huawei Technologies have signed a $40 million (N6 billion) deal to provide rural telephony in about 850 villages across the country.

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Nigeria’s internet market expands as Glo-1 goes commercial

2010-10-28T11:35:00.000-07:00

Ben Uzor Jr

The commercial launch of Glo-1 Cable at the weekend has ushered in a new era of prosperity in Nigeria’s internet market, with promises of providing high speed broadband access to the doorstep of Nigeria’s rural population by leveraging on the company’s massive 10, 000km in-land metro fibre network. By delivering 2.5 terabits of bandwidth capacity, Glo-1 cable will address Nigeria’s bandwidth requirement for the next 20 years, the Second National Operators (SNO) has revealed.

In addition, Globacom disclosed that it had customised services to address the requirements of a wide segment of clients - including telecoms operators, oil and gas companies, manufacturers, education and medical institutions. Analysts say that the country’s bandwidth market is expected to witness explosive price wars occasioned by heightened competition in the submarine cable market. It is expected that the price of bandwidth will fall from $2, 400 to $10 per megabyte as the number of cables increase.

“Today, I really feel excited because we are looking at a major step change in Nigeria. I promise you, things are never going to be the same again because now our cable has arrived and we can now connect it to our 10, 000km in-land fibre optic network. “This is the time we can now provide our country and its rural populace with clearer lines as well as high quality internet services to any international destination at really affordable prices”, says Mike Adenuga Jr, chairman, Globacom, said.

As stakeholders gathered at the launch, Mohammed Jameel, group chief operating officer, Globacom noted that ‘Nigeria is a bandwidth hungry country’, further adding that by providing 2.5 terabits per second of bandwidth, the underwater cable will cater for the country’s bandwidth need for the next 20 years. The commercial launch of the cable was imperative step towards lowering cost of international communications and improving internet speeds, Jameel told the audience, which included the Senate President, David Mark, Lagos state governor, Babatunde Fashola, Edo state, Adams Oshiomole, Ogun State governor, Gbenga Daniels and the deputy governor of Osun State.

“Today is a very important day in the development of telecommunications in the country of Nigeria. Nigeria has always been a bandwidth hungry country and so is the case with many countries in Africa. Today, with the arrival of Glo-1, the people of Nigerian and corporate bodies can now enjoy efficient internet services. Nigeria is today looking for connectivity to the rest of the world. The Nigerian economy is dependent on effective communication to the rest of the world. Today is the day of teleconferencing, telemedicine, e-learning and all these initiatives cannot be achieved if the country does not have excellent bandwidth available”, the GCOO noted.

Industry stakeholders declared that the emergence of the cable will have a multiplier effect on the Nigerian economy as it would boost the adoption of new and emerging technologies such as IPTV ( Internet Protocol Television), LTE (Long Term Evolution), VoIP (Voice over Internet Protocol), among others. According to them, the commencement of commercial services would go a long way in ushering in the much anticipated broadband boom Nigerians have been yearning for.

Senate President, David Mark, also assured that the federal governments would work assiduously to provide the right environment for companies like Globacom to thrive in Nigeria. “If we provide the right opportunities and the right environments for Nigerians who would have found ourselves on the moon ever since. If a young Nigerian like Mike Adenuga has been able to achieve this amid Nigeria’s tough business environment, then you imagine what many young Nigerian can do if the environment was conducive enough. Government needs to encourage Nigerians to join the rest of the world in business, industry, education, research and development”, Mark added.

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Telecom investments threatened by poor spectrum management

2010-10-12T07:54:00.000-07:00

•Hinders telcos from expanding mobile broadband services
Ben Uzor Jr

Nigeria’s telecommunications industry risks losing huge foreign direct investment as a result of poor management of the national frequency spectrum resources, analysts warned at the weekend. The nation’s telecommunications industry ranks among the top 10 in attracting FDI in sub-Saharan Africa and analysts told Business Day that the sector could miss its slot as investors are already taking a second look at the industry.

National frequency spectrum refers to the entire range of electromagnetic communication frequencies available to a particular country, including those used for radio, radar and television. According to the analysts, one of the key drivers for the success recorded in Nigeria’s telecoms landscape was the country’s impressive rating as one of the top ten receivers of FDI in Africa, based on the investment made in the telecoms industry.

Investment in telecommunications sector since 2001 has exceeded $18 billion, out of which about $12 billion is from FDI while the balance is from local investors. Ernest Ndukwe, immediate past executive vice chairman (EVC), Nigerian Communications Commission (NCC) had earlier warned that for Nigeria to attract more foreign investment into the telecoms sector, there was an urgent need to efficiently manage the country’s frequency spectrum resources.

This, he further explained, would include the timely sale of available spectrum bands to support the rollout of new technologies and services. Meanwhile, telecoms operators (telcos) have complained that spectrum unavailability is hindering them from expanding mobile broadband services in Nigeria.

This is even as growth in voice service revenue is expected to stagnate, industry analysts say, thereby putting pressure on operating companies to key into data (internet) offering as a valuable new revenue stream. Wale Goodluck, corporate services executive, MTN Nigeria, who spoke to BusinessDay in a telephone interview at the weekend believes that optimal management of frequency resources will not only boost rollout of new technologies but also improve the quality of broadband services delivered by operators in the country.

“We must look at diverse alternatives to drive broadband capacity. There is a fundamental need to implement a clear spectrum policy that will lead to ubiquitous mobile broadband services. The ‘digital dividend’ must be allowed to bear fruits in Nigeria. Government must speed up the allocation of digital dividend spectrum to mobile services. They must ensure that spectrum is resold thus freeing up a lot of frequency not in use but held by people and institutions without the requisite capacity to deploy services. We must also look critically at spectrum sharing”, he noted.

The digital dividend spectrum located between 200 MHz and 1 GHz offers an excellent balance between transmission capacity and distance coverage, thus enabling efficient network deployment. Due to its good signal propagation characteristics, fewer infrastructures are required to provide wider mobile coverage, allowing communications services to be provided in rural areas at lower costs.

Lanre Ajayi, president, Nigerian Internet Group (NIG) has also emphasised the need for proper management of national frequency resources so as to sustain the remarkable growth recorded in the telecoms sphere. “Yes, I have always talked about this issue; the Federal Government has not managed our national frequency resources properly. In the early stages of Ndukwe’s tenure, management of spectrum was nicely done and it was applauded around the world. This is however not the case today.

There are three spectrums adopted globally for WiMAX deployment and they are the 2.3 GHz, 2.5 GHz and 3.5 GHz spectrum. In Nigeria, all of them are having issues. For instance, the 2.5 GHz spectrum remains ideal for WiMAX and LTE deployments but is still managed by the National Broadcast Corporation (NBC). In the case of the 3.5 GHz spectrum, NIGCOMSAT is holding strongly on to it.

I will not be surprised if investors shy away from investing in the country’s telecoms sector. Naturally, they will want to invest in other countries in Africa where they can get the needed spectrum to roll out the new services”, Ajayi told BusinessDay at the weekend.

Besides, Nigeria faces another dilemma with much of its available 2.3 GHz spectrum lying dormant at the hands of existing WiMAX operators with no imminent plans for deployment of services. Analysts say part of the responsibility of the regulator would be to guarantee that these frequencies are allocated to operators that would use them.

This, they said, was because the allotment of such frequencies to the mobile industry would assist the sector to potentially get ahead of many markets, thus putting Nigeria on the front foot rather than playing catch-up. But more importantly, it could dramatically speed up the rollout of broadband communications and increase coverage.

In 2009, the late Umaru Musa Yar’Adua’s administration cancelled the licensing of the 2.3 GHz spectrum band conducted by the NCC on the grounds that “the letters and spirit of the stipulated rules and guidelines were not adequately complied with.”

The late President thereafter directed the NCC to initiate a fresh process for the award of the 2.3 GHz spectrum band license. Consequently, the telecom regulator disclosed recently that it was urgently looking at feasible ways to provide new licenses for spectrum dependent services on 2.3 GHz, 2.5 GHz, 3.5 GHz and 5.4 GHz spectrum bands.

Cheap Internet coming, as undersea cable glut sparks price war

2010-10-04T00:00:00.000-07:00

•Bandwidth may fall from $2,400 to $10 per MG
• Nigeria records 5,400% increase in Internet use
Ben Uzor Jr

More Nigerian homes will have access to cheaper internet services by 2012 as the country’s bandwidth market is expected to witness explosive price wars occasioned by heightened competition in the submarine cable market, analysts have predicted. It is expected that the price of bandwidth will fall from $ 2, 400 to $10 per megabyte as the number of submarine cables increase.

This is coming after a decade of slow, expensive and exasperating access to the information superhighway owing to the dearth of broadband infrastructure. According to them, Nigeria recorded a 5,400 percent increase in internet users from 2000 to 2009, indicating triple digit annual growth rates. Furthermore, it is indicative of the enormous potential in the growth of the internet market representing huge business prospects waiting to be harnessed, if only the necessary regulatory push and implementation of internet-based initiatives are made.

Besides, Nigeria will have five undersea cable systems connecting her to Europe and America in 2012 and they would boost data capacity to over 12 terabits per second. For years, and until the last few weeks, the only cable system serving Nigeria’s internet and data needs was the SAT-3/WASC or South Atlantic 3/West Africa Submarine Cable, which is a communication cable linking Portugal and Spain to South Africa, with connections to several West African countries along the route.

In the last few weeks, the Main One Cable System has launched, promising an astounding 4.92 terabits per second of bandwidth after upgrade. More recently, the Glo-One cable has also gone. Equally, the West African Cable System (WACS) - an initiative operated by nine countries (including Nigeria’s MTN Group), which comes with a high capacity submarine cable system linking Europe, West Africa and South Africa, will provide over 3.8 terabits per second of bandwidth.

Informed sources told BusinessDay that the WACS intends to adopt an aggressive entry strategy that would see prices of bandwidth fall as low as $10 per megabyte in Nigeria. According to the source, the reason why WACS would be able to sell at this ground-breaking rate is because the initiative is not for profit making, as most of the capacity is for members of the consortium.

Although WACS’ proposition has not yet come to fruition, Main One and Glo-One are already bringing down existing pricing model by reducing communications cost by 50 percent. Before Main One Cable commenced commercial operations, telecoms operators and Internet Service Providers (ISPs) bought 1 megabyte of bandwidth capacity for as much as $2,400, according to BusinessDay investigations. In the United States, the same megabyte per second costs $3.33 and in Japan $0.27 while in Kenya it is $600.

Moreover, Main One Cable seems not to be perturbed by growing competition in the undersea cable market. Funke Opeke , chief executive officer, Main One Cable Company had told BusinessDay recently that its open access strategy which dictates that the cable will not be in direct competition with telecommunications operators but rather provide high value wholesale bandwidth at affordable costs would definitely be the distinguishing factor as competition thickens in the cable sub-sector.

“We are open access which makes a lot of our operators’ customers feel comfortable. We provide services to all operators; we are not a retail operator, we only do business on a wholesale basis. So, we are not competing with them, its shared infrastructure. Our objective is to deliver superior value to them at a reduced cost in an open pricing scheme. You get a higher discount if you buy more volume or if you subscribe for a longer period. So, no operator is treated unfairly.”

Some industry analysts share Opeke’s opinion, arguing that WACS and ACE cables are consortium cables designed primarily to serve their members whilst Glo One cable is self-feeding for Globacom. In both cases, their idea of pricing will be very different from Main One as an independent cable. Globacom’s group chief operating officer (GCOO), Mohammed Jameel, thinks that the telecoms company’s regional reach and unique pricing model will also be a huge advantage for Glo-One cable amid competition.

“With telecoms licences in Nigeria, Ghana, Benin Republic, Cote d’Ivoire and Gambia, we are able to give circuits to customer locations and offer seamless services in several countries without engaging third parties”, Jameel explained. The GCOO further added that even where Globacom did not have operating licence, the company would be able to reach any global destination because of its strategic partnership with all major carriers.

Jameel disclosed that the primary beneficiaries of the Glo-One facility would be telecom carriers, GSM and Code Division Multiple Access (CDMA) operators and Internet Service Providers (ISPs) who will extend the benefits to remote enterprises, retailers and individuals.

Also, there are other underwater initiatives in the offering. The ACE submarine cable system covering Nigeria and other countries will stretch 17,000 kilometres (10,500 miles) from Penmarch, France, to Cape Town, South Africa, connecting 23 countries. The network will have built-in 40 gigabit per second capability and it is slated to be operational in the first-half of 2012.

Only a few days ago, BusinessDay learnt that Alcatel-Lucent was selected by eFive Telecoms, a South African telecoms firm, to build a new submarine cable network linking the west coast of Africa to South America. The system, according to sources, will be composed of two trunks - the first one connecting South Africa to Angola and Nigeria and the second trunk linking Angola to Brazil.

Meanwhile, growth in the telecommunications sector has remained on the upswing as latest statistics from the Nigerian Communications Commission (NCC) reveal that active connections peaked at over 80.6 million lines as at July this year with the GSM mobile sector accounting for the traditional market dominance with over 72.7 million lines. Furthermore, the mobile CDMA segment dropped 7.7 million lines whilst the fixed wired/wireless segment accounted for 1.1 million lines within the period.

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NCC boss assures telecom subscribers of quality service

2010-10-03T23:58:00.000-07:00

•To meet with telcos on Friday
Ben Uzor Jr

Eugene Juwah, executive vice chairman, Nigerian Communications Commission (NCC), has pledged to intensify efforts to improve the quality of service by ensuring that telecommunications operators are more responsive to the need of the consumers. Speaking at the Institute of Directors’ (IoD) members evening held at the weekend in Lagos, Juwah disclosed that the commission would meet with telecom operators on Friday, to draw up a feasible roadmap to improving service quality.

He stated that the commission had set up a taskforce to address the issues of quality of service in the telecoms sector, adding that the commission will work assiduously with operators to achieve network optimisation and speed up the rate of deployment of new base stations, switches and transmission infrastructure. “This is an important area I am particularly concerned about. I will meet with telecom operators on Friday and the issues of poor quality of service will form an integral part of my discussions with them”, the NCC boss revealed.

Giving an insight into some of the factors responsible for poor quality of service from a technological perspective, Juwah pointed out that most telecom operators may have failed to design some of their coverage areas properly, resulting in ‘blackpools’. Blackpools refers to grey areas in between base stations. This is even as they jostle to expand their network quickly in the country. “There may also be a lack of capacity in that the base stations that actually connect your calls are not properly sized and in many cases they get easily overloaded”, he added.

Since the inception of the mobile telephony in 2001, telecommunication subscribers have persistently complained about the quality of service rendered by telecom operators, which always results in billing issues, drop calls, and difficulty in recharging account, among others. But most of the frustrations, according to the telecoms operators, are as a result of cable and infrastructure cuts, particularly in Lagos and most other urban towns where road construction and maintenance are being carried out.

Alluding to the size of the population as one of the major challenges to building a quality network, Juwah pointed out that some of the actions of local and state governments and other regulatory agencies like the National Environmental Standards Regulatory Agency (NESREA) contribute significantly to poor quality of service. “If the NESREA actually locks up a base station because they feel people are complaining about radiation, then there will be poor quality of service there. One of the biggest problems we have with internet in Nigeria is that of infrastructure in terms of fibre penetration in our cities and residences. This problem normally arises in difficulty in gaining right-of-way because you cannot come and lay fibre on the road, you must have permission from the state or local government.

“NCC is planning to go into discussion over partnership with local governments, state governments, vendors, and operators in order to solve the right-of-way problem where it will be a win-win situation for everybody. Our plans will shortly be unfolded and I hope that in the near future we will start seeing the impact of this programme”, he explained.

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