WayForward@ITREALMS

Wednesday, August 17, 2011

Ride on broadband makes Nigeria investors’ heaven

A two-day Broadband Investment Summit ended in Lagos a fortnight ago, REMMY NWEKE reports that Nigeria is taking advantage of broadband infrastructure needs to position itself for more businesses.

In the recent past, a lot have been said about broadband and national development, but the assuming interest aspect is the fact that it would spur deployment of infrastructure, which in turn requires massive investment and not just an investment.

It was not startling that the Association of Telecommunication Companies of Nigeria (ATCON) in collaboration with Businessworld Communications Ltd, the publishers of BusinessWorld newspaper took a decision to host a two-day broadband investment summit.

The bottom line here, is the strategies to attract investment in this sector with a view of ensuring broadband infrastructure for last-mile options and sustain the fairly acclaimed existing service operators in this genre.

Although various school of thought have opined that investment could mean putting down fund for the purchase of bonds, stocks, real estate property, more so infrastructure in any given sector of the economy.

Just as experts at Investopedia.com explained that investment overtly means an asset or item that is purchased or built with the hope that it will generate income or appreciate in the future. Economically speaking, they stated that investment is the purchase of goods that are not consumed today but are used in the future to create wealth.

But receiving participants to the Broadband Investment Summit 2011, president of ATCON, Mr. Titi Omo-Ettu, described the event as a major outing on the implementation of a broadband roadmap where access is the bridge between sustaining the gains of the last decade and preparing for the challenges of the next.

ATCON and partners, Omo-Ettu said, had discovered that issues confronting telecoms industry as a component of the Nigeria economy, comprised but not limited to low technical skills, poor access to financing, barrier to investment, thus constituting about 30 per cent and its in finding solution to this percentage that the summit was berthed. Noting that the other 70 per cent, constituted by a poor access to reliable public electricity that refuses to go away, which could only be a dilemma waiting on government of the day to resolve.

He said that the two-day event witnessed keynote speeches; one lead paper, one technical paper, six commercial presentations and two syndicate sessions of business discussion, which would avail participants the chance of closely examining issues of infrastructure, content and rural access in the mission to motivate investment, build a market, remove access barriers, and encourage infrastructure construction especially in the local loop.

The destination, he said, is using broadband as enabler to connect the next 50 million telecommunications users in the country.

“We re-iterate that we will now dispense with the number of connected lines as an index of our industry development as it has become redundant and rather shift emphasis to using the actual number of our citizens who have access to telecommunications as a more insightful index of planning and developing our market,” he said.

Commending the Nigerian Communications Commission (NCC) for regulatory astuteness, Omo-Ettu applauded the Universal Service Provision Fund (USPF), for finding this Summit worthy of its support not just in terms of funding, but also with ideas and logistics. Even as ATCON promised to capture and incorporate into its direction of travel the major ideas to encourage investors, technocrats, and business leaders to look confidently towards the country.

Chairman of the event and former vice presidential candidate for Action Congress Nigeria (ACN) and industry icon, Mr. Fola Adeola, forecasted the existence of enormous untapped investment in Nigeria, especially in the ICT sector and specifically on broadband.

Adeola who lead discussions said that an examination of the investment climate in the next decade in Nigeria, particularly within the context of broadband infrastructure and services, has shown that there are untapped investment opportunities in the country.

“It is note-worthy to emphasize that the Main One project itself underscores the enormous untapped investment opportunities that exist in the Nigerian economy today and in the nearest future,” he asserted.

He said, broadband represents a new frontier for investment in the Nigerian economy in the next decade, just as noted that this forecast showcases the colossal possibilities that exist in this economy for credible infrastructure projects and the investment appetite of both local and international investors in the ICT sector in Nigeria.

Especially, he said, that in the area of broadband infrastructure and services have attracted equity and debt funding from both local and international institutional and private investors with an overall global keen interest to invest in Nigeria given the size of the market and growth potential. Pointing out, investors would remain wary until they see political certainty, which hopefully, should improve, following the performance and outcome of the last election.

“As the country enters a new political dispensation, several critical issues will need to be addressed by the Federal Government in order to renew investor confidence, and drive growth outside the oil and gas sector,” he said, stressing that these would include policy reforms which will improve several areas of dependencies such as power, security, ICT infrastructure, roads and other transportation infrastructure, education, and preparedness of the workforce for skilled jobs, improved financial and capital market structures.

Investment in broadband services, he said, urgently needs the attention of the government to take a critical lead in establishing an appropriate broadband policy that will lead to a favourable operating environment for investors, and encourage service uptake to drive further investments in this direction.

“Going by forecast that wireless broadband services alone can directly contribute additional N190 billion to the GDP by 2015, which will represent 1.22 per cent increase and 1.7 per cent growth in non-oil sector, with indirect contribution as much as N410 billion,” he said, adding that during which time, one could only imagine the enormous impact of full proliferation of these services on the Nigerian economy.

The Executive Vice-chairman, NCC, Dr. Eugene Juwah, in his keynote entitled ‘Robust broadband infrastructure: key to national development’ said that broadband from the regulatory point of view must be all encompassing in nature. Technically, he said, hitherto broadband has been defined in terms of numbers; bits/sec, but the trend is changing fast, the emphasis now is on what could be delivered.

He cited the Secretary General, International Telecommunication Union (ITU), Dr. Hamadoun I. Touré, as defining broadband during Informática 2011, in a speech he presented on February 8, 2011, in Havana, Cuba, asserting “I do not want to define any particular speed for this kind of connection to the Internet, because speeds are constantly rising as technologies advance. Rather, broadband means connections that are ‘always on’, without the need to dial-up every time you want to go online. Broadband also means high-capacity networks that can deliver very large amounts of information simultaneously. As a result, they can deliver voice, data and video, all at the same time.”

According to Juwah, today’s world is faced with growing challenges such as rising population, poverty, epidemics, climate change to name a few, but man also has the tools of Information and Communication Technologies (ICT) of unprecedented power to help humanity meet these challenges.

Prime among them, he said, is broadband access to the Internet, which is creating a revolution in how services are delivered, industrial processes are managed, researches are carried out and so on. Thus, Broadband represents huge opportunities for social and economic progress of any nation or people, mostly by facilitating delivery of more effective healthcare and banking, better education, smoother and more transparent governance, sustainable environment, more efficient transportation, national security, as well as smarter and more economical energy supplies.

Dr. Juwah pointed out that robust Broadband networks and services have globally brought about considerable transformation to businesses and markets, significant wealth, and growth in economies.

“Empowerment of individuals, organizations and communities are the further resultants. Access to Broadband visibly defines how equipped, businesses, people, communities and institutions are to participate in today’s digital and smart global economy,” he said.

Conventionally, he said, internet has been accessed via copper networks, but these networks are slow, have low capacities and poor quality of service (QoS) and grossly inadequately provisioned in the country. While the global revolution towards adopting a more efficient broadband access has led to the deployment of fibre networks worldwide, stressing that fibre networks are more cost effective, though it have a higher carrying capacity than copper or wireless networks, greater transmission speeds and provide better quality experience for internet users who increasingly demand video and file sharing.

For Nigeria to realize its Vision 20:2020 goal of becoming one of the 20 largest economies in the world by 2020, it is essential that advantage is taken of the broadband revolution sweeping across the world, by addressing fibre deployment challenges and position the country as an “e-economy” capable of providing unlimited access to the world and global resources.

Working in tandem with the policy direction of the Nigerian Communications Act, 2003 (NCA 2003), he said, NCC has undertaken initiatives like the Wire Nigeria (WIN) and State Accelerated Broadband initiative (SABI) geared towards the same objectives. Whereas WIN was designed to provide broadband transmission facilities to all corners of Nigeria, SABI was a complement to drive broadband to homes at affordable levels.

“Today, however, the companies licensed to provide these services face infrastructural and operational challenges. Fibre deployment is plagued with different constraints including administrative procedures for securing ‘rights of way,’ urban and regional planning, complexity of roles within the system and other local issues,” he said.

Dr. Juwah emphasised that in order to have true broadband services there has to be a shift, and that shift is towards a structured proliferation of fibre infrastructure across the country. Therefore, NCC, he said, is currently exploring the “Open Access Model” for the effective deployment of a national fibre network that will ensure an even platform for the service providers and enhance the achievement of the nation’s “e-economy” goals.

Describing the open access model as a framework for infrastructure sharing, with the roles of the Infrastructure Provider and Service Provider separated and services would be provided on a fair and non-discriminatory basis. Maintaining that implementation of this model would bridge the gaps in broadband deployment at a reduced price, even as presently the ownership options, pricing and deployment strategies are being explored.

NCC, he assured is ready to license Independent Infrastructure Provider and encourage regulated lease rates as well as retail rates to consumers, in addition to collaborating with stakeholders for funding, facilitate agreements between various arms of government and engage in dispute resolution amongst the various stakeholders as they arise.

Chief executive officer, Main One Cable Company, Ms Funke Opeke, in her contribution said broadband policy is imperative in Nigeria, drawing from the experience of her company in laying undersea cable at the cost of $240m, about N36.9 billion, which is expected to boost the connection of the next 50m users in Nigeria to the Internet within five years.

“Having had one year of successful operation behind us, we have proven our ability to deliver what we promise and during this first year, we have connected the majority of the large telecom operators and internet service providers in Nigeria and Ghana to the Main One network. But this is not enough,” she said.

Opeke admitted that they made some progress in bringing broadband services to the overall population in Nigeria, but because we hear feedback from consumers daily that they are not feeling the impact of our network. Nigerian consumers tell us in very clear was not satisfied, because consumers have made it clear to her company that they want faster speeds, lower prices and improved quality from their retail Internet service providers.

Main One as a pioneer in this area, she said, has removed the bottleneck of limited international bandwidth, high cost, and unreliable connectivity, and Nigerians and the Nigerian economy need to feel more impact from what we have done.

She cited an instance with the United States, which is the most technologically advanced nation in terms of ICT, the country in 2010 published a National broadband policy because “broadband is becoming what electricity was to the industry and for economic development to take place, and to ensure that the United States remains competitive, we must have easy and affordable broadband access for all citizens.”

As stakeholders in the broadband economy of Nigeria, Ms Opeke said, Nigerians and stakeholders could not agree more that there are critical policy imperatives to increasing broadband penetration in Nigeria which if not addressed will have an adverse impact on the nation’s development objectives.

She defined broadband in line with that of World Bank which described broadband as an interconnected, multilayered ecosystem of high-capacity communications networks, services, applications.

These elements create an ecosystem because, as explained by her, investments in high-speed networks improve the quality of service and promote the creation of even more complex or bandwidth-intensive applications. Additionally, applications attract more users by increasing the value of broadband and supports wider investments in networks and quality of services.

Opeke further said that wide spread access to services allows users to create their own content, again driving the demand for high quality services that could do more than simply download‘ content, but also allow sharing among users.

Emphasising that World Bank has found that in low- and middle-income countries every 10 percentage point increase in broadband penetration accelerates economic growth by 1.38 percentage points, more than in high-income countries and more than for other telecommunications services.

Developing other elements of the broadband ecosystem, she said, also provides economic benefits, citing an instance with the growth of Internet-related services and applications, which have created jobs and led to the creation of new businesses.

Bottom line is that investment in broadband infrastructure in Nigeria would not be a wasted effort, therefore, more investors still have opportunities to contribute to this phenomenon called broadband technology.

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