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Wednesday, June 28, 2006

Ndukwe lists prospects for ISPs in Unified License regime

Remmy Nweke

Executive Vice Chairman, Nigerian Communications Commission (NCC), Dr. Ernest Ndukwe has said that there are prospects for Internet Service Providers (ISPs) in the country in the recently introduced Unified Licensing Regime (ULR) as well as the coming of the Internet Exchange Points also known as “Internet Gateway”.

Speaking at a one-day seminar organised by the Nigeria Internet Group (NIG) on Internet Service in the UL regime as the guest speaker, he said that anticipation is high including price reduction for various internet access services in the country.

This, he said, would result to higher profit margin for the service providers.

Dr. Ndukwe, represented by Head, Business Development, NCC, Mr. Nnamdi Nwokike, also warned of potential danger in the regime, saying that there are some hiccups for small and medium Internet Service Providers.

Therefore, it will be imperative for them to realign their businesses or possibly think of joining forces in terms of merging in order to be able to compete favourably in the new dispensation.

He also said that they will require a robust network infrastructure and huge capital resources to match the kind of competition that may likely unfold such as the low Personal Computer (PC) penetration in the country which could prove stumbling block for wide internet usage.

He noted that a report according to the Economic Intelligent unit, the stock of personal computer (PC) per 1000 was 11.09 as at the end of 2005. For this reason, low PC penetration remains a big challenge coupled with high level of illiteracy.

Although there is now a growing recognition of the far- reaching impact of telecommunications and information services on the Nigerian economy, the high level of illiteracy still restrict the diffusion of internet. Worst still, even half of those that are literate cannot use the internet for problem solving.

In the Unified Licensing regime, he said, it is expected that there will be growth in Internet access as many players will enter the market. However, as this happens, a major challenge would be in the area of content control.

“The ISPs will need to do a lot of work to ensure that there is a control of access to objectionable content such as adult materials to protect children and vulnerable individuals in the society,” he advocated.

Similarly he said, there is need to ensure that Internet is not used for scams which has in the past years projected Nigeria in bad light in the international community

Internet engineers and technologists, he noted, are still very few in Nigeria relative to the demand. He stressed that the result is that innovations from the home-front are almost non-existent as “we depend on the advanced countries.”

He maintained that no matter what obstacles before ISPs, Internet is central to the new vision of Nigeria to be an IT power in the Sub-Saharan Africa. This, he said, saw to the government’s inauguration of the Nigerian Internet Exchange Point implementation committee recently.

Pointing out that ULR will encourage free growth of new applications and services that will stimulate the development of every sector of the Nigerian telecoms industry.

“There will be substantial improvement in the level of infrastructure required to drive broadband internet penetration,” he asserted. Underscoring that the level of competition in every sector of the telecoms industry, including Internet Service Provision, will deepen with substantial level of investment equally required to be able to compete in the new licensing regime.

He urged ISPs to take advantage of the Internet Exchange Points and Gateway being established in the country by signing to it In order to ensure that the ISPs are not undermined in the scheme of things under the new regime.

“They need to consider merger and coming together. By consolidating, they will enjoy synergy and economies of scale that will put them in good stead to compete favourably and take advantage of the numerous benefits offered by Unified Licensing,” he said.

In his submission, he said expectations are high that the Nigerian Internet market would be sustainable under this regime, considering the strong entrepreneurial culture, advancing local IT industry, both in terms of software and hardware as well as the responsiveness of the regulator.

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