By Prince Osuagwu, Hi-Tech Editor
As the low 3G coverage comes to the front burner, following the electronic transmission of election result debate in the National Assembly, Group Managing Director/CEO, VDT Communications, Mr. Biodun Omoniyi, looks at how protection of available facilities and more investment in telecom infrastructure can improve service quality and increase coverage.
Omoniyi also used the opportunity to speak about the successes and challenges in offering retail and enterprise solutions in the 20 years his company, VDT, has been around in the telecommunications ecosystem.
Telecom infrastructure is on the front burner today considering the revelation that Nigeria has only 50 per cent 3G coverage even as we clamour for 5G deployment. Do you see a continued poor service quality?
Service quality is a factor of so many things, including the ability to invest in infrastructure. We have moved from 2G to 2.5G and to 3G, 4G and 5G and all these technologies have positively impacted on the telecoms sector and other sectors of the economy.
However, most times telecoms operators face insecurity challenges and threats to telecoms facilities and all these could affect not only service quality, but fast roll out of relevant facilities. If one telecom site is vandalised, it can cause ripple effect on other sites that are connected to it. Again if there is a cut on the backhaul transmission cable, it can adversely affect service quality. So we need uninterrupted telecoms facilities, including investments in telecoms infrastructure, in order to achieve faster, wider coverage and better service quality.
The Federal Government’s national broadband plan is to cover 90 per cent population and 70 per cent landmass by 2025. Where do operators like you stand in this plan?
I am pleased with the bold ambition of government concerning broadband penetration. However, government alone cannot achieve it without contributions of industry players and stakeholders like VDT Communications. 90 per cent population coverage and 70 per cent landmass coverage by 2025 is a tall order but achievable through collaboration with industry stakeholders. To achieve the target, there must be increased investments from industry players.
Already, VDT is fast expanding its services to provide connectivity to more organisations and people. We have plans to further deepen our retail strategies and offerings to customers in the next five years. We are investing in broadband infrastructure to boost our retail and enterprise service offerings, and we are doing so in every state of the federation. Through our expansion plan, we will be covering more organisations and homes, thereby helping government to achieve its broadband target.
There was this Universal Services Provision Fund meant for operators to access in order to move services to the critical areas, why are we still talking about low coverage particularly in rural areas?
The Universal Service Provision Fund (USPF), which is being offered by the telecoms industry regulator, the Nigerian Communications Commission (NCC), is like the equalisation fund that we see in the petroleum industry. The USPF is meant for network expansion in rural and underserved communities, but most operators are only concentrating on urban areas where they can make quick returns on their investments.
The essence of USPF is to encourage operators to develop rural areas that may appear unprofitable at the moment. What the NCC did was to use certain percentage of the money from Annual Operating Levy (AOL) for USPF and only operators that are willing to invest in rural communities have access to the fund. VDT is expanding in some parts of the rural areas and we are working with NCC to achieve further expansion in the rural and under-served areas of our country.
You play in the data space, where revenue for data is fast growing while that of voice is depleting by the day. The bigger operators are beginning to shift operations to data. As a small industry player, is VDT threatened by the shift from bigger operators?
The revenue for voice did not actually drop. What dropped significantly is the rate of growth in the voice segment of the business, because technology evolution is beginning to compel people to do more of data than voice. For VDT, even though we are small industry operator, our business model has been centred on data from the very first day of our operations. So, we are not threatened by the incursion of bigger players into the data space.
You have played in the telecom sector for 20 solid years, tell us your story?
My motivation to become a player in the telecoms industry, providing bespoke telecoms services, started from my school days in the University of Ilorin, where I studied engineering. At my final year as an engineering student, I had the push and zeal, as a communication/computer student, to become a provider of communications services to people after graduating from the university. After graduating, I worked as computer engineer in an engineering company, handling systems integration and maintenance.
From there, I developed the interest to build networks for customers, and ensuring that different computers align and connect with each other in a seamless communication flow. That was 36 years ago. Having seen my dreams come true, I applied for a licence to operate VDT Communications. At the onset in 2001, we started operations with 14 staff addressing just five points of services, but today we have grown to 400 staff, attending to 143 points of services across the 36 states of the federation.
In the last 20 years, it has not been easy doing business in Nigeria, but we remained focused in delighting our customers and meeting their needs. That, and other factors, have brought us this far.
How has the suspension of Twitter operations in Nigeria affected your business, since VDT plays in the data environment?
VDT is a customer-centric organisation and our focus is on customers who use our connectivity services. We provide Virtual Private Network (VPN) for customers but that is strictly private to gain access to connectivity. We also have VPN servers in the cloud where people can log on to and get connectivity to carry out several online activities. So the suspension of Twitter operations in Nigeria is not affecting our business growth. We have built security around our networks to protect the data of customers. The Nigerian Data Protection Regulation (NDPR) is another policy that is helping to protect customers’ and organisations’ data.
How fair is the current Forex regime to your business?
Communication services involve different equipment not manufactured in Nigeria. So we are understandably import-dependent. This makes foreign exchange inevitable for us. But the strength of our Naira currently has been weakened against the dollar. This has raised the rate of Forex which of course is affecting our business in Nigeria. Since the Covid-19 pandemic, the Naira has lost its value the more and it is telling on importation of communication equipment because Forex has gone so high and access to Forex is even a nightmare. Before Covid-19, the value of Naira was N360 to $1, but today, it has jumped to over N500 to $1, which is now eating deep into our revenue.
So what’s the way forward?
On the interim, the government must give ample opportunities for telecoms and communications operators to have easy access to Forex. However, the lasting solution is for the government to protect and promote indigenous manufacturers of communication equipment so that importation of equipment will be drastically cut down.