Nigeria takes broadband investment drive to Doha, Qatar

By Emmanuel Okwuke  /  Senior  IT. Correspondent 

 

In most of the sessions at the International Telecommunications Union (ITU) Telecom World 2014, which ran from December 7-10, in Doha, Qatar, the theme was the same even when the proponents came from over 160 nations and multinational organisations that form membership of the ITU.

ITU, the global ICT regulatory arm of the United Nations Organisation (UNO) turns 150 years in 2015 but looking back, the regulator thinks that the last 20 years or so have been quite eventful especially and Nigeria stands out, primarily because of the telecommunication revolution which began in 2001.

Ordinarily, Nigeria looks fulfilled in terms of voice communication for which so much has been done and achieved in the last 13 years. But Communication Technology Minister, Dr. (Mrs.) Omobola Johnson, says so much more remains undone.

 

ICT sector: Work in progress

Johnson who led the Nigerian delegation to the ITU Telecom World 2014, and by implication the chief promoter of the Nigerian broadband campaign, agreed with the audience and participants during the four-day event that ICT has now become the next “Oil and Gas,” and Nigeria is a gold mine. The Minister reeled out in her presentation statistics to prove that successes have been recorded in ICT, but the sector remains work in progress.

With an estimated population of 170 million, Nigeria is the largest country in Africa and seventh largest in the world. Nigeria is now the largest African economy after the recent re-basing exercise, for which ICT alone contributes over 10 percent to the Gross Domestic Product (GDP).

The country’s active infrastructure projects have a total value close to $100bn. “the ICT industry has significant enabling effect on other sectors of the economy, contributing a combined 2.56 per cent of added value,” the Minister said.

According to her, to achieve accelerated roll out of robust, reliable and cost-effective ICT infrastructure to increase citizen access to ICT the following has been put in place: Four Undersea Fibre-Optic Cables with combined design capacity of approximately 10 terabit per second, 100,000 Km of terrestrial fibre-optic cables; approximately 28,000 (2G), 15,000 (3G) transceiver stations; 134 million phone subscription representing 96 per cent teledensity and over 74 million internet users representing 52 percent of the population.

However, she regretted, broadband penetration remains at only six percent, hence the campaign to improve on this side of ICT through deployment of terrestrial fibre optic networks among others.

The minister said government has put in place a national broadband strategy and roadmap that seeks to increase broadband penetration from six percent to 30 per cent by 2018. This will be covered by: 3G/Long Term Evolution (LTE) for up to 80 percent of the population, fixed broadband of about 16 per cent of population based on fibre by 2018 to gurantee minimum download of 1.5 mbps and Open Non-Discriminatory Access.

She maintained that Government is also facilitating increased investments through Spectrum auctions, Regional infrastructure companies (INFRACOS), smart states initiatives to reduce cost of infrastructure deployment; Universal Service Provision Fund (USPF) for subsidised access mechanisms for unserved and underserved areas or demographics.

Success stories of non-telecoms companies

The Minister listed some success stories of non-telecommunications companies to include: IHS Towers which manages over 21,000 towers with 14500 in Nigeria. Only recently it took over 9,151 mobile towers in a deal it struck with MTN Nigeria. “In 2014, IHS successfully raised $2.6bn in debt and equity bringing the total money raised by HIS since 2012 to $4.5bn”.

Mrs. Omobola also told the audience that Techno Mobile will establish a factory to assemble phones in Nigeria by 2015. She also listed Resourcery as one of the success story. Its relationship with world enabling technology firms makes it a major partner of Cisco, Microsoft, HP, SAS and Systimax Solutions.

The Minister said e-commerce companies with retail infrastructure contributes to a growing demand of wholesale/retail services via e-commerce. She listed these to include: Konga, Jumia, Dealdey, Kaymu among others.

 

74 million internet subscribers connected via narrow bands

The Executive Vice Chairman, (EVC), Nigerian Communications Commission (NCC), Dr. Eugene Juwah, while reeling out statistics to explain where we are in Nigeria now, agreed with the Minister that ICT is indeed work in progress. 134 million subscribers, 96 percent teledensity and over 74 million internet subscribers connected via narrow bands.

Also, he noted that the industry has attracted over $32bn Foreign Direct Investment (FDI) so far. “Growth in the sector today continues to be impressive.“But despite these, opportunity for growth is still high hence the adoption of the Open Access Model for the INFRACOS licensing regime to promote healthy competition, affordability and access to all in the seven zones for which they will deploy services. Our adoption of global best practices in regulatory activities has become an inspiration to many African countries that come to ask us to tell them how we do it.”

Juwah said, broadband offers huge returns on investment. He said government will provide incentives like tax holidays of between five and seven years and also provide financial incentives of between 15 to 30 percent of the operators Capital Expenditure (CAPEX), “This is to make it attractive for operators to go to areas they believe may be unattractive”.

Furthermore, Juwah said: “We must report that the positive ways ICT is affecting lives and businesses in our nation is breath taking”.

“Broadband availability and usage is top on the NCC agenda that is why we have entrenched the Open Access Model o actualise this. This is why we have hinged our participation at ITU World 2014 on the theme: Broadband Nigeria, Enabling Access, and Transforming Communities”.

Juwah said part of NCC story is that: “In February 2014, we successfully issued a wireless broadband licence on the 2.3GHz frequency spectrum band. Regional fibre optics infrastructure deployment license is currently being finalised for North Central geopolitical area of Nigeria, and Lagos, the commercial nerve centre of Nigeria with a very huge population”.

 

Broadband: next big thing 

Principal partner of KPMG, Mr. Joseph Tegbe, who serves as consultants to the soon to be licensed INFRACOS gave an overview of the ICT environment in Nigeria at a session tagged “Nigeria Investment Meeting” the Minister, Executive Vice Chairman, Dr. Eugene Juwah, Chief Executive Officer, MTN Nigeria, Mr. Michael Ikpoki and Executive Director, Etisalat Nigeria, Mr. Ibrahim Dikko who also made presentations, told the gathering that INFRACOS  licensing will begin with those for Lagos and the North Central regions; including Abuja.

According to him, Nigeria’s telecommunications sector has undergone rapid transformation on account of the liberalisation in 2001. This makes the ICT sector, the fastest growing in the country. “While data services have not recorded the same level of growth as voice, key trends indicate that demand for these services is on the rise,” Tegbe submitted.

He said there is evidence that the demand for broadband will be very high considering the slow speed experienced by those 74 million connected to the internet now. Online businesses will require high speed to process online trading and delivery of goods, hence broadband is the next big thing to happen in Nigeria after the success of voice communication.

 

Open access model

As part of key actions to implement the National Broadband Policy, the NCC launched the Open Access Next Generation Broadband Network model in 2013. Tegbe listed the key objectives to include: The extension of backbone fibre infrastructure network into metropolitan areas, bringing it close to potential customers as required to encourage and support investment in last mile and make available the new network infrastructure and services to all telecom operators on a fair and non-discriminatory basis by building a foundation for fair and effective competition among others.

The NCC has commenced activities on the Open Access model. The first round auction for two of the seven zones has commenced. The second round for the other five zones is to be done early 2015. This will be concluded in May 2015. It could be recalled that NCC auctioned the 2.3 GHz in February 2014.

The Next Generation Broadband Network (NGBN) will change the way businesses are done by the people in Nigeria. As Tegbe put it, Nigeria has done very well in the strides to implementing NGBN,” but the journey has just begun, because an estimated $2bn in funding/investment will be required yearly over the next five years to bridge the broadband infrastructure gap.” Despite some challenges, Nigeria remains one of the most attractive investment destinations globally.”

 

Making Nigeria preferred investment destination

Nigeria Ambassador to Qatar, Mr. Shuaibu Ahmed agrees with Tegbe’s submission. The Ambassador said since the establishment of the Nigerian Mission in Doha, Qatar, “Our primary mandate has been to make Nigeria the preferred investment destination, because Qatar has an investment appetite of over $50b”. He said, Qatar wants to divest its economy and investment from oil and gas for which it has over reliance of 90 per cent. “

Ahmed added that “the Nigerian Embassy is laying the basic framework for fruitful business partnership and the Qataris have demonstrated good fate in investing in Nigeria.”

 

MTN’s business risk that paid off 

Chief Executive Officer, MTN Nigeria, Mr. Michael Ikpoki in his submissions said: “We consider ourselves an investment ambassador for Nigeria. Indeed, our growth and success in 13 years of operation in Nigeria showcases our nation as a good investment destination. Yet when we took the decision to invest in the Nigerian market, the economic and political climate seemed anything but promising. Invest we did nonetheless and our focus on the nation’s boundless, untapped opportunities and not on the bleak forecasts at the time, yielded amazing results.

Ikpoki said that MTN today is the leading ICT Company in Nigeria employing, directly and indirectly, over 5, 800 staff, with Nigerians accounting for 99 per cent of this number. We have over 58 million subscribers and counting, and this from 400, 000 telephone subscribers prior to our entry into the market.  Today we have been recognised by the Federal Government of Nigeria as one of the top 100 businesses in Nigeria, the 6th on the list to be precise, based on criteria such as – net investment; tax payments; impact on job creation and wealth generation; CSR investment; gross revenues and total net assets.

“Beyond providing ICT services to millions of people and beyond the more than $15 billion we have invested in the network, fixed assets and facilities nationwide, we take great pride in the number of jobs we help to create, the number of businesses we support, the communities we uplift and transform and the multiplier effect on the economy and the quality of life of Nigerians. This is because we place a high premium on our role as enabler of socio-economic development and catalyst for economic acceleration guided by an enduring belief in our nation’s prospects”.

 

Etisalat rakes in 20.5 million subscribers in seven years

Etisalat according to Ibrahim Dikko, started building from zero subscribers in 2007 after it acquired its operating licence. But today, with over 4500 Base Stations and 20.5 million subscribers, investing in Nigeria remains one of the best decisions of Etisalat.

Source : Independent

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