Broadband as Catalyst for ICT Growth in 2016

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Emma Okonji examines the impact of increased broadband penetration and other key indices that drove development in the information and communications technology sector in 2016

When the federal government approved the five year national broadband plan in 2013 with a projection to attain 30 per cent broadband penetration by 2018, up from eight per cent penetration level in 2013, little did Nigerians know that the country will achieve such broadband target, given the infrastructural level of the country as at then.
Although government itself was convinced that the broadband target was achievable if the right policies and infrastructure were put in place, it, however, did not know how it will achieve the targeted penetration level.
Between 2013 and 2015, broadband penetration struggled to reach 10 per cent, a situation that created some atmosphere of uncertainty as to whether Nigeria could attain 30 per cent broadband penetration by 2018. But in 2016  the ICT sector witnessed tremendous growth in mobile broadband penetration, which the Nigerian Communications Commission (NCC), the industry regulator, put at 20 per cent penetration. The rapid penetration in mobile broadband, no doubt, triggered development in the ICT sector, leading to the massive rollout of 4G LTE network among telecoms operators and Internet Service Providers ((ISPs).
Attributing the rapid growth of ICT in 2016 to increased broadband penetration  and other indices such as big data, telecoms infrastructure and proper regulatory framework, stakeholders have said Nigeria would surely meet and surpass its broadband target of 30 per cent penetration by 2018.

About broadband

In technical parlance, broadband is a type of high-speed internet connection that has surpassed dial-up as the standard way to connect to the internet. Broadband packages come in all shapes and sizes, from cable broadband to 3G and 4G mobile broadband.
Alternatively, it is referred to as high-speed internet or wideband transmission. Broadband provides a variety of channels of data over a single communication medium. Today, there are wide varieties of broadband technologies available in most areas   and several organisations like Internet Service Providers (ISPs) and telecoms companies offer broadband service.


Broadband penetration

Statistics obtained from NCC’s website  showed that  broadband penetration from  2011 to 2013, was at paltry eight per cent. But the figure rose slightly to 10 per cent between 2014  and  2015. Mobile broadband, however, climbed to 20 per cent in June 2016, occasioned by the global shift from voice telephony to data communications, as well as the increased number of smartphone devices that are currently in the market, which are the preferred devices to access the internet.
Commenting on the growth of mobile broad and in the ICT sector, former President of the Association of Telecoms Companies of Nigeria (ATCON) Mr. Lanre Ajayi, told THISDAY that the ICT sector witnessed tremendous growth in 2016, saying  one major factor that triggered such growth  was mobile broadband, which  suddenly reached 20 per cent penetration within few months.
“The ICT sector witnessed tremendous growth in 2016, occasioned by increased broadband penetration, which gave room for the rapid launch of the fourth generation long term evolution (4G LTE) technology. With increased broadband penetration, most industry players had to launch their 4GLTE, and with this development, many Nigerians now have faster access to broadband and the internet,” Ajayi said.

Contribution to GDP

Citing the current statistics on telecoms contribution to gross domestic product (GDP), as released by the National Bureau of Statistics (NBS) in June this year, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta said telecoms’ contribution to GDP, moved from $18 billion in private sector investments, including foreign direct investment (FDI) in 2009 to $30 billion in 2014 to $32 billion in July 2015  and to N1.58 trillion as at June 2016, which represents an increase of 1.0 per cent, relative to the first quarter in 2016.
Danbatta quoted the NBS as saying “This is the largest contribution to GDP made from the telecoms sector in the rebased period, which emphasises that growth in telecommunications has remained robust when compared to total GDP.”

Advocacy 

The ICT industry, especially the telecoms sector, witnessed increased advocacy in 2016, from the telecoms consumer right group, like the National Association of Telecoms Subscribers (NATCOMS), as well as from Nigeria Computer Society (NCS), the umbrella body of all Nigerians practicing computer and computational related programmes.
The advocacy from NATCOMS, was in the area of the proposed communication tax bill that has passed the second reading at the National Assembly, which seeks to increase communication tax by another  nine  per cent. The President of NATCOMS, Chief Deolu Ogunbanjo and the President of the Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola, where among the several Nigerians who protested the planned communication tax bill, and called on the National Assembly members to drop the idea, which they said would be inimical to telecoms growth in the country, as subscribers would be made to pay more for telecoms services rendered by telecoms operators. While NATCOMS threatened to drag the National Assembly members to court to seek redress should the proposed communication tax bill be introduced, it also assured Nigerians that it would mobilise civil society organisations, Nigerian students, and coalition of Nigeria Consumer Association, for a five million man-match to the National Assembly in Abuja, to protest the proposed communication tax bill.
For ATCON, its president, engaged the Senate President, Bukola Saraki  and members of the Senate over the proposed communication tax bill, where Teniola made a presentation, highlighting the dangers inherent in the planned bill.
Teniola told Saraki and the Senate that the bill, if eventually passed into law, would exclude 10 per cent of the population of telecoms subscribers, which is over 20 million, from getting access to telecommunication services.
Teniola explained that whereas the survival of the Nigerian economy is about attracting more citizens to gain access to internet and telecommunications services, the bill would cut down on access to ICT services.
Another area of advocacy   in 2016, was in the area of price floor for data services  introduced by NCC. Sensing that the introduced price floor, which is a template that sets price regulation for data service offering, will hike data tariff across networks, Nigerians, championed by NATCOMS, vehemently objected to it and made strong protest to NCC and the National Assembly, which compelled the NCC to suspend the idea  and asked all operators to revert to the old price floor, and to maintain the status quo until the conclusion of study to determine retail prices for broadband and data services in Nigeria.
The Director, Public Affairs for NCC, Mr. Tony Ojobo, who announced the suspension, said it became necessary, following the general complaints by consumers across the country, who perceived that the interim price floor would lead to hike in the cost of data services across networks. He said the decision to suspend the directive was taken after due consultation with industry stakeholders.
Still in the area of advocacy, NCS also engaged the federal government in the area of policy formulation and implementation that would accelerate growth in the ICT industry.

Service quality 

The issue of service quality did not raise so much dust in 2016 unlike previous years. Some stakeholders, who spoke on the issue of service quality, said there was no noticeable drop in service quality this year. They explained that the industry rather experienced slight improvement in the area of service quality in 2016. They, however, called on telecoms operators to ensure good service quality across networks this Yuletide season, as subscribers would be making lot  of calls and sending text messages to their families and loved ones during the season. Ogunbanjo, who said there was slight improvement on service quality this year, also commended telecoms operators for maintaining cheap prices for voice and data services in 2016. According to him, aside fair pricing in telecoms services, the operators were able to introduce value added services and promotional activities that further dropped the prices of data services across networks in 2016.

“Data services got cheaper in 2016. We were buying 1.5GB of data per month for just N1,000, as against the cost of data bundle which sold for N1,000 for 500MB data in previous years,”Ogunbanjo said.

Regulation 

Subscribers and industry stakeholders have commended NCC for its regulatory framework in 2016.  Ajayi commended NCC for maintaining its policies on technology neutrality, which he said was well demonstrated by NCC in 2016. He explained that NCC   regulated the activities of telecoms operators  without delving into regulating the technology that drives growth in the sector. He also commended NCC on the manner at which it handled the introduction of price floor for data service, but expressed his worries that over-reduction in data prices might not be too good for operators whom he said, needed to make marginal profits to remain in business.

The challenges

Speaking on the challenges that bedeviled the ICT sector in 2016  most industry stakeholders pointed at forex as a major challenge for industry operators. According to ICT operators, the devaluation of naira  coupled with the scarcity of dollar, created a lot of challenges for the operators, especially those operators that depended largely on importation of telecoms equipment for their businesses. Since they carry out purchases in dollars, it became difficult for them to raise the naira equivalence  just to make purchase in dollar. They called on the federal government to take urgent steps in addressing the issue of forex in the coming year, in order to ease ICT business in the country.
Although there were pockets of challenges as witnessed in the ICT industry in 2016, its gains however surpassed such challenges, a situation that has brought a lot of commendations to NCC and the industry stakeholders.