National broadband targets at risk as poor spectrum management persist

Ben Uzor

Nigeria's may fail to meet its lofty national broadband targets due to lapses in the management of frequency spectrum, which has paved way for gross under-utilisation of this scarce national resource, market observers have said. The federal government has already set the target of an 80 percent growth penetration in 3G services by 2018, in line with the National Broadband Plan (NBP). This target will remain unattainable because many high-net worth individuals, agencies of government as well as telecommunications networks, without requisite capacity to rollout services are sitting on huge amounts of frequency spectrum. Bitflux Communications, a relatively inexperienced player in the market, was awarded the 2.3GHz frequency spectrum for the provision of wholesale wireless broadband services in February 2014. The telecoms company is yet to rollout broadband service across the country.

Benuzorreports.com findings suggests that Nigeria is bound to miss the June 17, 2015 deadline set by the International Telecommunication Union's (ITU) for a global switchover of television signals from analogue to digital transmission. This is because the federal government has not released the N60 billion to the National Broadcasting Commission (NBC), long earmarked as the cost of the Digital Switchover (DSO) process in the country. The migration is expected to free up requisite spectrum under the control of the NBC, providing the needed capacity for telecoms operators to rollout broadband services. For the second time in about five months, the Nigerian Communications Commission (NCC), has postponed the proposed auctioning of the 2.6GHz spectrum band ‘till further notice', a situation that is frustrating the business plans of prospective investors seeking to play critical roles in Nigeria’s broadband market.

Speaking at the BusinessDay CEOs forum held in Lagos recently, Segun Ogunsanya, chief executive officer/managing director at Airtel Nigeria, said due to explosive growth in mobile data traffic, telecoms operators require more spectrum to support this growth. According to him, there is an urgent need to expedite the release of frequency to operators in order to facilitate industry development and enable the nation meet its broadband targets. "Our industry is very spectrum hungry. Spectrum is the oxygen of this business", said Wale Goodluck, corporate services executive at MTN, the nation's largest operator by marketshare. "The more spectrum we get, the better the service we can deliver", he stated. Management of frequency spectrum allocation is handled by the National Frequency Management Commission (NFMC) chaired by Omobola Johnson, minister of communications technology.

The allocation of the available national spectrum band to telecoms is handled by the NCC, which oversees the nation’s telecoms sector. Market observers however are insistent that the telecoms regulator should create a spectrum market for better management of this scarce resource. "If I have a frequency spectrum today that I bought based on certain business plan and for some strange reason, my plans are not working as I already planned, I may choose to sell my frequency spectrum to someone else", said Lanre Ajayi, national president, Association of Telecommunications Companies of Nigeria (ATCON). According to him, such situation cannot play out in the industry due to provisions in the licensing policy. "People are now asking for such market to be created, where I should be able to sell my spectrum to an operator that is ready to deploy immediately", he said in an interview with Benuzorreports.com.

Recall that existing operators offering services on the 2.3GHz spectrum band, including Spectranet, Mobitel and Direct-on-PC (DoPC) had urged the NCC to allocate the remaining slot in the band to them. At the time, the three operators were sitting on 20MHz each of the 2.3GHz band, leaving 40MHz open for licensing. This remaining slots would have enabled them eliminate interference – a major technical issue significantly impairing delivery of efficient service – amongst the three operators.

Poor service looms as vandalism slows telcos N800bn expansion push

Ben Uzor

Nigeria may witness a fresh wave of poor service quality in the delivery of telecommunications service in coming months due to incessant vandalism of equipment and installation owned by mobile operators, an informed industry source has said. According to the source, this worrying development is already restricting many telecoms operators from fully implementing outlined network expansion initiatives across the country, even amidst the rising cost of doing business in an industry heavily dependent on Foreign Exchange (FX) and capital. Speaking on the condition of anonymity, our source said "there are growing concerns amongsts operators that wanton vandalism of network equipments is impacting negatively on their ability to deliver top-notch services to the growing subscriber base." He added, "we could see a fresh wave of poor service delivered to subcribers if telecoms equipment are not fully protected."

The total number of telephone lines currently connected on mobile networks in Nigeria has increased from 188.8 million in the last quarter 2014 to 192.1 million in January 2015, according to the latest industry data released by the Nigerian Communications Commission (NCC). According to the commission, additional 3.3 million lines were connected in January 2015 alone on all the networks including GSM, CDMA and fixed networks. There are more than 26,000 kilometres of fibre cables laid across the country by two of the networks, MTN and Glo. More than 25,000 base transceiver stations have been installed across the country. Speaking at the BusinessDay CEOs forum held in Lagos recently, Segun Ogunsanya, chief executive officer at Airtel Nigeria, pointed out that 2 percent to 3 percent of Nigeria’s telecoms sites are affected by arbitrary shutdown and vandalism at any given point in time.

MTN, the nation's largest mobile operator with about 60 million subscribers, says Boko Haram, the Islamic extremist sect, had destroyed a total of 120 MTN sites during periods between 2013 and 2014. A total of 80 sites were destroyed during the last quarter of 2014, according to the company. In 2013, the NCC noted that it had recorded about 1, 200 fibre cuts in few months. Ogunsanya said Nigerian operators spend $3 billion - $4 billion (about N800 billion) as CAPEX annually on network expansion initiatives. If vandalism of telecoms equipments and installations continue unabated, Nigerian subscribers could experience higher frequency of dropped calls, incohorent transmission, and undelivered text messages. Lanre Ajayi, national president, Association of Telecommunications Companies of Nigeria (ATCON) says vandalism has become regular occurrence as all telecomm operators in Nigeria have stories to tell in this particular regard.

"This particular challenge is estimated to be costing the industry billions of Naira annually and constituting serious hindrances to better quality of service from the operators", he explained. To substantiate further, it costs about N24, 750, 000 to install a single base station together with its tower, special antennas and two generators to power the station. Industry observers are of the view that the current situation is exacerbated by failure by the National Assembly in the passage of the Critical National Infrastructure (CNI) Bill. The bill, if it was passed into law, would criminalise any act of vandalism against telecoms equipment, since they would then be classified as CNI. The President-elect, Buhari has been urged to declare "telecoms infrastructure as a critical national infrastructure and accord such special protection in the interest of the nation", said Funmi Onajide, general manager, corporate affairs at MTN. "The ICT industry is a critical enabler of socio-economic growth in Nigeria and Government support cannot be overstated", she added.

               

Globacom tables $600m for Ivorian Telco in regional expansion push

Ben Uzor

Competition in West Africa's telecommunications market is expected to intensify following plans by Globacom, Nigeria's national carrier to acquire Ivorian mobile operator Comium Cote d’Ivoire, informed sources have said. Globacom, owned by business magnate Mike Adenuga, is embarking on a regional expansion push, as the telecoms company looks to wrest control off closest rivals South African based duo MTN, Vodacom, and India's Bharti Airtel. According to Telegeography, Globacom, is lodging a $600 million takeover bid for Comium Cote d’Ivoire, a company heavily entangled in massive debt and cash flow issues. If the multi-million dollar acquisition deal, which is already within radar, does go through, Globacom would have succeeded in shoring up its cross-border terrestrial network, which currently connects 14 West African countries. The deal, when completed, would further accelerate the growth of internet and mobile data service across the sub-region.

The deal however would put Globacom in pole position to provide advanced communications services to global companies and multinationals looking to deepen their presence across the West African sub-region. The company invested $600 million in 9, 800 kilometre submarine communications cable, which along the west coast of Africa between Nigeria and the United Kingdom. Globacom, second national operator, which already owns an international carrier services licence in Cote d’Ivoire, reportedly plans to invest over $1 billion in upgrading Comium-CI’s network over three years. Comium CI has more than 900,000 mobile subscribers according to L’Autorite de Regulation des Telecommunications. It is a subsidiary of Comium Group, a Lebanon-based telecommunications company owned by Lebanese businessman Nizar Dalloul.

The group operates as a multi-service provider on four continents, specialising in wireless data networks Wireless, GSM communications, Internet service provision and VoIP (Voice over Internet Protocol). Comium CI is heavily enmeshed in debt to the tune of more than $25 million and has been given until 15 May to pay off its debts or risk being placed into receivership. Mike Adenuga, 63, is the 2nd richest man in Nigeria with a fortune currently estimated by FORBES at $4.2 billion. He owes his fortune to his ownership of telecoms outfit Globacom, and Conoil Producing, a Nigerian oil exploration firm that operates 6 oil blocks in the Niger Delta.

In August 2003, Glo Mobile was launched in Nigeria. Glo Mobile introduced lower tariffs, pay per second billing and alongside other value added services. Although Glo Mobile was the fourth GSM operator to launch in Nigeria, within seven years of the company's operation, its subscriber base grew to over 25 million. In June 2008, Glo Mobile was launched in the Republic of Benin. Glo Mobile showed unprecedented growth through the sale of 600,000 SIM cards in the first ten days of operation. Glo Mobile offered Per Second Billing, which charges subscribers for the exact airtime used. They are currently offering value added services such as MMS (Multimedia Messaging Service), Glo Magic Plus news and information, vehicle tracking, musical ring-back tones and mobile banking. In May 2008, Glo acquired an operating license through its Glo Mobile division in Ghana, West Africa's economic power house.

In October 2009, Glo acquired submarine cable landing rights and International Gateway Services in Côte d'Ivoire. Spokespersons for Globacom and Comium were unavailable to comment on the deal. From inception, Globacom has led the industry in the rollout of consumer-focused innovative products and services, making it possible for the operator to record many firsts in the telecoms industry. Globacom has also contributed to the economic growth of sub-Saharan Africa by providing gainful employment for thousands of people and by its active support and promotion of such sectors as entertainment and sports in all the countries it operates in. It has also provided a solution to the internet bandwidth problem in West Africa through its multi-million dollar international submarine cable, Glo 1. The company currently retains, as brand ambassadors, the largest number of key players in the entertainment and sport sectors than any other company in the sub region.

MTN builds robust platform to support local app discovery

...Nigerians can download apps at zero data cost

Ben Uzor

Mobile Telecommunications Network (MTN), the country's largest mobile operator by subscriber base, is building a robust distribution platform to enable the vast majority of Nigerians access locally-relevant mobile software applications at zero data cost. Benuzorreports.com had exclusively reported that local app developers were struggling to generate revenue due to the massive difficulties experienced by prospective users in discovering their innovative solutions in the deluge of global content available in the most popular distribution platforms like App store, Blackberry World, Google Play, and Windows store. In view of this, MTN says it is opening up its network, with over 60 million mobile subscribers to the local software applications development community, as part of its one-week apps awareness campaign strategically designed to support free software application downloads.

Speaking at the MTN APPtitude Conference held in Lagos, weekend, Adebayo Adekanmbi, chief marketing officer, MTN, said the rationale behind the initiative is to get more apps in the hands of Nigerians. "We have organised all Nigerian-centric apps in a portal and through our special gateway Nigerians can access digital content at no cost. We are making it open for all developers in the country to join MTN by bringing the APK for their apps so that we can put it in the hands of Nigerians", said Adekanmbi. Market observers say that Nigerians have indeed succeeded in building problem-solving and life-enhancing mobile apps. Some of the prevailing concerns being addressed by these apps include: traffic, healthcare, education, transportation, e-commerce, tourism and hospitality related issues, among many others.

According to them, the huge strides being recorded in mobile applications development is going unnoticed because Nigerians are unable to quickly find relevant apps, without the distractions of applications that are only useful to people in North America and Europe. "Every Nigerian can now download any app relevant to them free of charge for the next month.", Adekanmbi added. The MTN CMO said that the company would also assist Small Medium Enterprises (SMEs) convert their websites into apps. According to him, there is an urgent need to simplify access in order to grow uptake and consumption of digital services.  "99 percent of Nigerian- centric websites have long URLs (Uniform Resource Identifier), which are difficult to remember, hence, customers hardly visit these pages more than once", he further explained.

Through the new initiative, Adekanmbi said the company is playing a critical in democratising the internet as it looks to allow the generality of the Nigerian populace access relevant digital content. Femi Longe, co-founder, Co-Creation Hub (CC-HUB), a social innovation centre dedicated to accelerating the application of social capital and technology for economic prosperity, has challenged local developers to build apps that fits in seamlessly with the daily lives of Nigerians. Speaking with BusinessDay, Longe said, "When i look at how i consume apps, I consume things that are necessary to get my everyday work done. One the apps I use a lot is the GTBank app. I dont need a platform to get the app because it is relevant to my daily life." According to him, developers need to start thinking local instead of duplicating foreign apps. "They need to build apps that are relevant within the context of Nigeria", he added.

Today, there are multiplicities of apps that have been developed for the convenience of Nigerians. Apps like BudgIT, Traclist, Efiko, Jobs In Nigeria, Genii Games, Nigeria News, Easy Taxi, Ready Cash, Mobile Money, Nigerian Movies and Nigerian Constitution are gaining significant traction in terms of usage and adoption in Nigeria, Africa's largest economy by GDP. Moreover, the mobile software applications industry will be worth US$25 billion this year, according to MarketsandMarkets, a global market research company. While the annual compound growth rate was 29.9 percent between 2009 and 2014, this figure is however expected to rise as emerging markets like Nigeria, Kenya, Uganda, create access for millions of people to be connected to the internet and join the race to launch relevant, locally developed apps.