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Broadband business very profitable in Nigeria, FG tells investors at ITU World

By Prince Osuagwu

Nigeria may have taken a sizeable number of Small and Medium size Entrepreneurs, SMEs to the just concluded ITU telecom World in Budapest, Hungary, to showcase the potential of the country’s informal sector, but the opportunity that was not to be lost was that of attracting global investment community into Nigeria’s broadband market. Vanguard reliably gathered that was actually the message that resonated as the country hosted the world in a few opportunity events at the world show.

L-R: Nigeria’s Amb. to Hunagry, Muhammadu Yunusa;   Secretary  General, International Telecommunications Union, Mr. Houlin Zhao;  Director, Policy, Competition and Economic Analysis, Nigerian Communications Commission, Ms. Josephine Amuwa and Executive Commissioner, Technical Services, NCC, Engr. Ubale Maska at the opening ceremony of Nigeria Day at the ITU Telecom World 2015 in Budapest, Hungary.
L-R: Nigeria’s Amb. to Hunagry, Muhammadu Yunusa;   Secretary  General, International Telecommunications Union, Mr. Houlin Zhao;  Director, Policy, Competition and Economic Analysis, Nigerian Communications Commission, Ms. Josephine Amuwa and Executive Commissioner, Technical Services, NCC, Engr. Ubale Maska at the opening ceremony of Nigeria Day at the ITU Telecom World 2015 in Budapest, Hungary.

ITU Telecom world  is a meeting point for telecoms operators, regulators, other government agencies, technology equipment manufacturers and vendors as well as technology solutions providers and investors.

Every year at the apex world telecommunications event, Nigeria is given the opportunity to host participants over two events tagged Nigeria Day and Nigeria Night. Nigeria Day happens on the first or second day after the show kicked off and the Night, signposts the closing ceremony of the showpiece.

These events provide Nigeria, with the opportunity to further strengthen the already acclaimed leadership position in telecom development among emerging markets of the world. Usually, the Executive Vice Chairman of the Nigerian Communications Commission, NCC, who represents federal government, would address the gathering, giving growth statistics of the Nigerian telecom industry and possibly highlight key investment areas to potential investors.

Memory lane

However, Vanguard gathered reliably that Executive Commissioner, Technical Services, NCC, Engr Ubale Maska represented the EVC, this year. Addressing a gathering of investors, regulators and top officials of ITU led by its Secretary General, Houlin Zhao at the Nigeria Day, Maska was said to have gone memory lane, tracing the technology journey of the country from monopolistic NITEL, paltry 400,000 lines to the present day when the country is celebrating over 150 million active telecom lines.

According to Maska, up till 2001 when the country deregulated the telecommunications industry, there were just about 400,000 active phone lines. The determination of the government and empowerment of the regulators instigated a market explosion, which has created enough ripple effects on other sectors of the economy.

Growth in statistics

Since 2001, the telecoms industry has grown significantly, seeing hordes of investors across the world directing their investment towards Nigeria. Today, the country has over 150 million active telephone lines with a teledensity of 107.67 per cent and over 93 million mobile devices connected to the Internet. Low-cost of entry of most feature smartphones as well as the reduction in access cost have also resulted in increased Internet subscriptions.

Also, Nigeria’s telecoms investment profile soars impressively. A market with an investment value of about $50 million in 2000 is worth over $32 billion at the moment. However, a large number of Internet users do so at high cost and even don’t have access to the high-speed Internet service

Meanwhile, Nigeria currently has a target of 30 per cent broadband penetration by 2018 in line with its National Broadband Policy (NBP) approved by the Federal Government in 2013. Till date, broadband penetration stands at 10 per cent up from six per cent two years ago, suggesting that penetration is still very low when compared with the success so far recorded in the mobile telephony segment.

Why Investment is needed

Despite the landing of over 10 terabyte of undersea cables in the country shores,  broadband is still very low. Only in major cities such as Abuja, Lagos, Port Harcourt among others can one enjoy a semblance of broadband.

These are indications that growth, notwithstanding, the Nigerian Information and Communication Technology (ICT) industry is still in need of a lot of investment.

Director, Policy, Competition and Economic Analysis, Ms. Josephine Amuwa, however, had revealed how the government planned to use the 2015 ITU show to attract that investment.  She said: “The key message we bought to ITU this year is the issue of our broadband expansion. Broadband is the future, as there is hardly anything one seeks to do in today’s digital economy more efficiently and effectively without access to the Internet.

“Access and broadband are the infrastructures that enable high-speed Internet, video streaming and other heavy data. Since we have conquered voice with over 150 million subscribers in Nigeria, the new phase is the broadband and that was one key message that we passed to the whole world here during our Opening Day. “We told investors to come and invest in Nigeria with the assurances that their investment is safe and the investment we are looking for majorly is the investment in broadband infrastructure.”

Besides,  global consultancy firm, KPMG, last year projected that Nigeria would over the next five years, need to push for an average investment of N2 billion annually into its telecoms sector towards building a robust next-generation broadband network nationwide. This projection represents a cumulative investment of about $10 billion in the next five years.

Even on the mobile segment investment is also need. The mobile operators on ground, including MTN,   Airtel, Glo and Etisalat and the licensed collocations service providers currently have just over 30,000 base stations from the minimum of 70,000 base stations requirement estimated in 2002. This may also explain the congestion subscribers suffer and the poor quality of service experienced. It also reinforces the fact that the country needs roughly more than half of the infrastructure it currently has.

Incentives

Nigeria also went a step further to promise potential investors of incentives that would immediately translate to Return on Investments, ROI. According to the Director, Public Affairs, NCC, Mr. Tony Ojobo, “Nigeria currently has a lot of incentives for investors willing to participate in the nation’s broadband sector. Besides relaxed regulatory environment which has been acclaimed as one of the best in the world, Nigeria is still making plans to see that the tax regime is favourable to investors”

The Zhao challenge

After listening to Nigeria’s gospel of broadband investment, the ITU sec Gen, Zhao practically endorsed it. “Nigeria and other African nations today are not looking for charity; they are looking for partnership and investment opportunities to grow their telecoms sector. “Chinese and European companies are coming to Nigeria, as my discussions recently with some investors have indicated.

I would encourage Nigeria to work harder to lure these potential investors into your country, which is the largest African country. ITU can also be of assistance to you by facilitating this partnership with foreign investors,”. He also noted that the fact that Nigeria is now championing 4G broadband when most developed countries still grapple with 2G is a good justification this need for increased investment inflow by the country’s regulator.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.