ICT adoption must increase in Nigeria for the economy to develop – Main One CEO

Broadband penetration is the rave of the moment in terms of Internet connectivity in Nigeria. The Chief Executive Officer, Main One Cable Company, Ms. Funke Opeke, underscores this in an interview with DAYO OKETOLA, stressing that increased adoption of Information Communications Technology is vital to the overall economic development of the country.

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What challenges has Main One Cable Company faced in its one year of operation?
Ms. Funke Opeke: The challenges faced are mainly related to 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, yet what we find is that the infrastructure on ground to distribute is limited. In areas where better infrastructure or long haul national backbone networks exist, for example, it is controlled in a proprietary manner, whereas with an open access cable, anyone can connect to us at a uniformly low price. The price 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, this 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 forward to working 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 such. 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.

There are two Nigerian broadband cable companies – yours and that of Glo 1. Is there any cooperation between the two of you in trying to make things move?
Ms. Funke Opeke: 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 it became difficult to get access to that country. But the availability of multiple routes allows for constant connectivity. An analogy comparable to this is like having only one airline coming into Nigeria. If that airline is grounded, it only means that people cannot travel out, which will 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 of infrastructure: it is 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. 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 it is critical for us as a nation to get this right and that is why all stakeholders 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.

As being popularly demanded, do you think it is government intervention that is needed in the telecoms industry?
Ms. Funke Opeke: It is 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 but Nigeria as a country has not participated in any meaningful way other than as a consumer 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?

So, we have to think about how we use ICT to do all that in our industry. We are a powerhouse in West Africa. If we start doing that with 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 what I see is the opportunity to do a lot of these things.

Almost a year after, can you tell us what your return on investment is like?
Ms. Funke Opeke: 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 Internet Protocol 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. 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.

If the Federal Government were to implement the broadband strategy today, as an expert in this industry, by what percentage do you think broadband would increase?
Ms. Funke Opeke: When we look at the size of the youth population and our objective in terms of employment, job creation and 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 between 12 and 36 months. In between 12 months and 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 per cent penetration. And what is it going to take to achieve that in this period? If you look at economies that 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 framework 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, which means we have a clearer plan on what we want to achieve.

Do you expect the Federal Government to set up a task force to drive broadband penetration?
In terms of the task force, I am not sure. We have seen GSM take off. We have seen GSM penetration rates above 50 per cent, led by the regulator and the private sector. So I think it’s a policy framework, and 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 task force, 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 the act of engaging them and setting the goals and saying what do we need to do differently? But I don’t know whether we need new bodies or new structures. Certainly perhaps, more focus on ICT at the Federal Government level might be interesting.

Source: The Punch, Nigeria

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