NIGCOMSAT PRIVATISATION AND ROAD NOT TAKEN

Sonny Aragba-Akpore writes that the country’s communication satellite is simply another drainpipe

With what is likened to a white-elephant project, Nigeria’s Communications Satellite NIGCOMSAT IR launched in Xichang, China on December 19, 2011 expires in four years.

Launched with a funfair, and beamed on the NTA Network NIGCOMSAT IR is a replacement for NIGCOMSAT1 launched in May 2007 but failed a year later.

The cost of the satellite, put at $300m, was funded by China Exim bank under the auspices of China Great Wall Industry Corporation (CGWIC). Nigeria’s contribution was $50m as counterpart funding.

NIGCOMSAT IR was Nigeria’s response to join countries that venture into space to provide communications services to its citizens and neighbouring countries which do not have direct access to satellite communications.

But strangely, since the launch of the Satellite, nothing significant has happened.

NIGCOMSAT is like Mtel which paid $285m in 2001, and went on a misadventure in GSM business, buying equipment to deploy services. All of that collapsed despite its sale to a private investor.

To succeed in communications satellite business, Nigeria should take a cue from other climes. No operator runs with a single satellite and expects to succeed.

Telesat owns 298 Satellites while Intelsat has 50, Eutelsat, 36; Arabsat 6, among others.

The government has attempted to privatize NIGCOMSAT a few times but vested interests frustrated such moves and so the government has continued to fund the place year in, year out with little impact on the economy.

With nearly 325 staff on its payroll and over N20billion yearly subvention, the company cannot boast of a yearly income of N300m.

With a restricted clientele which remains predominately some sympathetic Ministries Departments and Agencies (MDAs), no serious business on NIGCOMSAT IR platform. The reason is that in the case of downtime as a result of failure, the company does not have any backup to cushion any form of such downtime.

When NIGCOMSAT I failed in 2008, all the banks and corporations linked to it suffered severe losses before they were migrated to other satellites. Besides, the satellite has its ground station located in China thus making its well-trained engineers and experts redundant since its only local ground station packed up long ago.

With the fear of the unknown especially resulting in downtime, corporate organizations remain reluctant to join the satellite. Even the Direct To Home (DTH) platform which is supposed to augment government drive to introduce Digital Switch Over (DSO) works in fits thereby rendering services inaccessible.

Although there are claims that the issue of set up boxes remain one bottleneck though the DTH with its very laudable capacity has not been able to pop up services to the applause of its subscribers

There are also allegations that the top management is made up of round pegs in square holes which is another tragedy.

The Minister of Communications and Digital Economy Dr. Isa Pantami said the other day that NIGCOMSAT will launch two additional satellites in the next two years and that he has secured government approvals for the funds for that purpose. He also told the staff when he addressed them at the Lugbe, Abuja headquarters that he had also secured government approval to stay action on the privatization exercise. Though the staff applauded this move, what we see on ground does not justify the huge investment on the company set up since April 6, 2006, from a mere project office at the National Space Research and Development Agency (NARSDA)

Chief Executive of NIGCOMSAT Limited, Dr. Abimbola Alale clarified that the launch of the two additional satellites will boost the company’s profile and join the league of global satellite communications players.

She said Nigcomsat 2 and 3 which are expected to be launched by 2025 are still only at request for proposal (RFP) levels and will be funded by Public-Private Partnership (PPP) arrangement.

The space policy which was launched in the year 2000 created a 25-year space plan by which time manufacturing of spacecraft and other rocket testing facilities should be fully on the ground. But strangely all efforts have been channeled to launching Nigerian Satellites abroad.

That is why privatization of the NIGCOMSAT should interest the government if progress is to be recorded in this regard.

A privatized functional communications satellite will reduce the cost of bandwidth very significantly and bring services closer to the user. NIGCOMSAT IR expires in 2016 and only a properly privatized company could muster the courage and the funds to initiate a workable and functional satellite with adequate backup to avoid issues of downtime in the events of failure or other accidents.

NIGCOMSAT IR has 28 transponders made up of 14ku– band, eight Ka-band, four C – band, and two L – bands specially designed for mobile communications. But most companies and other corporate organizations bypass NIGCOMSAT when it comes to Satellites leasing which comes in excess of $1b yearly.

The story of a failed NITEL and its mobile subsidiary, Mtel Limited should be a lesson on how the government has no business in business.

That is why launching two new satellites may not be the answer alone because it will be run like most government businesses which are plagued by red-tapism and nepotism.

The only successful government businesses are those regarded as Self-funding Organisations (SFO) which do not depend on subventions or envelop from the government.

NARSDA for instance frowns at the government’s move especially saying it is counterproductive despite what NARSDA has done to train Nigerian Engineers on the technology of building satellites.

Experts say the NIGCOMSAT IR is idle and the only way to put it into proper use is to privatize the company and allow the new owners to deploy it for commercial success.

A properly utilized NIGCOMSAT IR will ensure that cost of data drops very significantly, boost Digital Switchover (DSO), and create a formidable platform for telemedicine in Nigeria.

Although NIGCOMSAT IR was launched at no cost to Nigeria as a result of the failed safe insurance coverage, its life span which draws near will happen without any significant achievement in this regard, because of the absence of a functional satellite to boost bandwidth, even when broadband penetration remains low at 41%.