Prospects of Nigeria’s broadband potential
IN a world of increasing Internet activities and growing dependence on
online platform for virtually everything from shopping to banking, bills payment and remittances, the need for a robust infrastructure cannot be overemphasized. Globally today, attention is shifting gradually from the Internet to broadband
because of its elasticity, which
includes performance at the speed of light. Before the advent of broadband,
accessibility to the Internet was mainly through dial-up access
which was limited to 56 kilobits per seconds (Kbits/s from here onwards) unlike broadband which has a
traditional capacity of 256 Kbits/s. This led to the popularization of
broadband beginning in the early 1990’s. The broadband uses
various mediums to transfer data, among which includes Digital
Subscriber Line (DSL), Cable Modem, Fiber, Wireless, Satellite, Broadband over Powerlines (BPL) among others.
Already, a World bank report pointed to the fact that in developing
countries like Nigeria, a 10 per cent increase in broadband penetration can actually drive an economic growth. Despite the over 25
terabytes capacity of bandwidth in the country occasioned by the landing of several submarine cables
including MainOne, Glo1, WACS and SAT 3, the country’s penetration is still at a meagre 10 per cent,
which market
observers have been
described as too low
looking at the
potential the Nigerian
market can boast of.
Though, a National
Broadband Plan (NBP)
has been unveiled,
which targeted a 30
per cent penetration
by 2018, the need to
also attract Foreign
Direct Investments to
the sector, have also
necessitated Nigeria’s
participation at the
yearly International
Telecommunications
Union (ITU) Telecom
World 2015.
At this year’s event, in
Budapest, Hungary,
Nigeria also used the
occasion to woo
investors.
The forum provided
opportunities for the
Nigerian
Communications
Commission (NCC),
carrying the flag of
Nigeria, to share its
giant strides in the
telecommunications
sectors to the global
investment community
while also using all the
key programmes held
by the country such as
the Nigerian Day and
the Nigerian Night, to
highlight key
investment areas,
especially in
broadband, to
potential investors.
Pavilion partners to
the NCC, at the event
also include MainOne,
Glo1 and WACS all of
which are in operation
but grossly under-
utilised, stakeholders
from Airtel, Mainone,
Digital Bridge Institute,
Nigerian
Comunications
Satellite Limited,
Galaxy backbone
Limited Phase3
Telecoms, Etisalat,
Zinox and the National
Information
Technology
Development Agency
(NITDA).
Broadband campaign
Addressing a gathering
of investors, regulators
and top officials of ITU
led by its Secretary
General, Houlin Zhao,
at the Nigeria Day,
which was an occasion
to officially open
Nigerian Pavilion to
investors, the Acting
Executive Vice
Chairman of the
Nigerian
Communication
Commission (NCC),
Prof. Umar Danbatta,
said “we have come to
ITU this year with a
clear message to
investors by asking
you to come to Nigeria
to invest because your
investments are safe in
Nigeria.”
Danbatta, who was
represented by the
Executive
Commissioner,
Technical Services at
NCC, Ubale Maska, said
for a country as big
and strategic as
Nigeria,
telecommunications
did not become a
major socio-economic
activity until 2001 .
According to Danbatta,
“up till then the
country had about
400,000 active phone
lines. The
determination of the
new democratic
government and the
refocusing and
empowerment of the
regulators instigated a
market explosion,
whose ripples have
continued to spread,
drawing global
attention to Nigeria
and eliciting deserved
recognition from
global bodies such as
ITU, which has since
seen the NCC as a good
regulatory reference
point.
Industry statistics
Since 2001, the
telecoms industry has
grown significantly,
making Nigerian
telecoms market an
optimistic one even as
global research firms
such as Pyramid
Research and
McKinsey have
predicted that Nigeria
remain an investment
haven for telecoms
business in years to
come.
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
and smartphones as
well as the reduction
in access cost is
resulting in increased
Internet subscriptions.
However, a large
number of Internet
users don’t have access
to the high-speed
Internet service and
this has informed the
desire of the country
to woo investors into
coming to Nigeria to
invest in its broadband
market.
Also, Nigeria’s
telecoms investment
profile has witnessed a
meteoric rise, sending
very clear signals that
Nigeria is the market
to be for discerning
investors. A market
with an investment
value of about $50
million in 2000 is
worth over $32 billion
today.
Low penetration
Nigeria currently has a
target to achieve 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.
“Today in Nigeria,
despite the landing of
over 10 terabyte of
undersea cables in our
shores, a lot of
Internet access is not
actually broadband,”
said Danbatta. “You get
some semblance of
broadband in major
cities such as Abuja,
Lagos, Port Harcourt
and other Grade ‘A’
cities. But in most part
of the country, the
traditional slow
internet access is the
order of the day.”
According to him,
despite all the growth
the industry has seen,
the Nigerian
Information and
Communication
Technology (ICT)
industry is still in need
of a lot of investment.
This, according to the
Director, Policy,
Competition and
Economic Analysis, Ms.
Josephine Amuwa, has
informed the country’s
desire to preach
investment
opportunities in
broadband sector to
the investment
community at ITU
World Telecom 2015.
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 that is not
increasingly requiring
access to the Internet.
“There is nothing you
can do now without
needing the Internet,
as access and
broadband is the
infrastructure that
enables 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.”
Required investment
Meanwhile, Nigeria,
according to Danbatta,
is need of huge
investment inflow into
its broadband segment.
KPMG, a global
consultancy firm, has
declare last year that
over the next five
years, Nigeria would
need to push for an
average investment of
N2 billion yearly into
its telecoms sector
towards building a
robust next-generation
broadband network
nationwide. This
represents an
investment gap of
about $10 billion in
the next five years.
Danbatta told
investors that Nigeria
needs huge investment
in building better voice
network and much
more investment in
broadband sector.
