Ogungboye: Govt Support for Telecoms, Key to Economic Diversification

The Managing Director/CEO and Founder of e.Stream Networks, Muyiwa Ogungboye, spoke with Emma Okonji on the need for government to support telecoms growth in order to enhance economic diversification, among other issues. Excerpts:

Tell us about e.Stream Network?

e.Stream Network is an indigenous company, founded in December 2006 to provide broadband and communications services to corporate organisations. We started out as a satellite communication company, providing VSAT technology services to the people, but as technology and customer taste change, we evolved to providing radio wireless and fibre wireless services. Today we are partnering Bitflux to provide 4G LTE services as well. We are a technology company providing broadband services and we want to be the first choice for organisations that need broadband services.

Being a 4G LTE broadband service provider, what is your coverage area like?

We commenced the 4G LTE broadband service delivery last year and we partnered Bitflux to achieve this, since Bitflux is licensed to provide the backbone infrastructure, but is not licensed to sell to endusers. e.Stream is licensed to sell to endusers and we are one of the strategic retailing partners of Bitflux. Although the Bitflux 4G LTE rollout is not as large as it is supposed to be, but with their service offerings, we are able to cover most parts of Lagos like the Tinubu Square, Broad Street, Marina, South West Ikoyi, and part of Victoria Island. Recently we have covered some areas on the mainland of Lagos, like Ogba, Gbagada, Maryland, Ikeja, Ojodu Berger and we are still expanding our services to cover more areas.

How is low broadband penetration in the country, which is currently put at 21 per cent, affecting your kind of 4G LTE broadband service offerings?

Yes, we currently have low broadband penetration at 21 per cent with a projection to reach 30 per cent by 2018, but the current indices are clear indications that we may not, as a country, achieve the 30 per cent broadband penetration by 2018, more so that 2018 is just around the corner. We may not be able to achieve 30 per cent penetration because of the challenges in power supply, poor access to fund raising, stiff competition from bigger operators, as well as multiple taxes and levies in the ICT industry. Yes it is affecting our kind of service delivery in broadband and we need government support in this regard.

 

Why is Nigeria having challenges with broadband penetration, when we have several landings of submarine cables at the shores of the country?

It is true that we have several submarine landing cables at the sea shores from big operators like Glo 1, MTN WACS and MainOne, including the SAT 3, but the major challenge is about capacity distribution. There is no national backbone infrastructure to distribute the broadband capacities from the shores of the country to the hinterlands and that is why broadband penetration is still low and expensive. Building national backbone infrastructure is capital intensive and the operators do not have easy access to funding and again the operating environment is harsh. All these put together are adversely affecting broadband penetration and at the same time, affecting our kind of broadband business offerings.

 

You try painting a picture that small operators like e.Stream Networks are facing serious challenges in the industry, especially from bigger operators. Why is it so?

The challenges faced by smaller operators are numerous. We are faced with stiff competition from bigger operators, we are faced with multiple taxes from state governments when laying our fibre cables and we also have cash constraints because access to funding is a difficult one for us who are the smaller operators and we need the regulator, the Nigerian Communications Commission (NCC) to move fast in addressing the issue, which has already forced many smaller operators out of  business. There is stiff market competition against smaller operators by the bigger operators and there is the issue of underpricing that is affecting the operations of smaller operators. We have come up with several advocacies through our association, the Association of Telecommunications Companies of Nigeria (ATCON), but government seems not to listen to us and we need the government intervention in these matters also.

The NCC has licensed two Infrastructure Companies (InfraCos) and it is planning to license additional five InfraCos designed to address the challenges of broadband infrastructure. How laudable is this initiative?

Licensing InfraCos is not the issue, but the issue is about nurturing the InfraCos and giving them the right support to succeed. The truth is that the licensed InfraCos do not have the support of government to roll out broadband infrastructure across the country. There are no support on tax rebate, access to funding, multiple levies and taxes from government agencies, and all these put together, makes it difficult for the InfraCos to thrive, even though they have the licence. So those InfraCos that already have licences cannot rollout because of the challenges in the industry, which the government must rise up fast to address.

 

Over time, technology has evolved from 2G, 3G, 3.5G to 4G LTE. How will you classify the 4G LTE adoption rate in the country?

The adoption rate of 4G LTE in the country can be categorised in three folds: There is corporate side, small and medium enterprise (SME) side and the individual (home) side. The 4G LTE is playing out more in the SME and the individual sides, than the corporate side. So the adoption rate is still low and this is so because the high dollar rate has eroded so many things. President Muhammadu Buhari is trying to localise most products that are consumed in the country, and support the Nigerian products as against the urge for foreign products. When this is achieved, the purchasing power of Nigerians will increase and more people will adopt 4G LTE technology, which has to do with speed and quality.

What do you suggest the government should do to address the adoption rate of 4G LTE?

Government must do more to increase the purchasing power of Nigerians and businesses, and government should come up with policies that will encourage business growth in the country. Government must collaborate with ICT experts and work with advocacy groups like ATCON to achieve its goal of diversifying the Nigerian economy. The challenge we have is that government do not listen to us, the advocacy group, yet we contribute our own quota to the country’s   gross domestic product (GDP).

What amount of local content do you have in your operations and how has the corporate social responsibility project of e.Stream, impacted on its host community?

In the area of local content, I want to make it clear that e.Stream Network is not a content provider, but a broadband and communication provider, and as such we do not provide applications, be it local or foreign, but we provide the enabling environment for applications to thrive. Part of our focus is to have alliance with application and content developers. We have data centre seated in our office where we host the data of some organisations. In the area of corporate social responsibility (CSR) initiative, we focused on the education sector and we have been able to assist schools in Lagos. Recently, we selected a school in Ikorodu area of  Lagos that is completely impoverished and we assisted the school in renovating a block of classrooms and we provided tables, chairs and other school materials, and we will do more by appreciating schools that are investing in information technology (IT). We will be looking at schools that are using IT to develop themselves and their students, and teachers. We are developing a product in that regard and our marketing team will be launching it before the end of the year.

You have been a strong advocate for the establishment of telecommunications infrastructure development bank for the information and communications technology (ICT) sector. What value is it going to add to the sector?

It is true that I have been a strong advocate for the establishment of telecoms infrastructure development bank for the ICT sector and I do so because of its  importance to ICT growth. Telecoms has revolutionise the way businesses are being managed, as well as the lifestyles of people, and these are some of the advantages that telecoms has brought to the sector, but there is a huge challenge in raising capital by the operators to sustain telecoms business in the country, hence we need infrastructure development bank in the telecoms sector, like it is in the oil and gas sector. It will help operators get soft loans to manage their businesses effectively. Banks syndicate loans to bigger operators but will not listen to smaller operators, the reason why we need the infrastructure development bank in the telecoms industry. Government needs to support the telecoms industry just the same way that the regulator, the NCC is supporting the industry. The infrastructure bank will help us to expand our business because majority of the smaller operators are struggling to expand their business.

Such bank will provide the necessary financial support for telecoms operators that would assist them in network expansion and upgrade, instead of relying on money deposit banks, whose interest rates are on the high side and inimical to business growth.

 

So who will fund the infrastructure bank that you are advocating?

The government has to fund it. Who funds the agricultural banks that are giving loans to farmers? So the federal government has to fund it and it is not going to be given free of charge because any operator that has access to a loan from the infrastructure bank will have to pay back, but with minimal interest of single digit rate. What we need is the ease to access to such loans. A country like China did that to support telecoms equipment supplier like Huawei, that has turned out to become the biggest telecoms equipment supply in the whole world, and this can be replicated in Nigeria. Very soon, Europe will stop buying oil from Nigeria because they are planning to stop manufacturing of petrol and diesel cars by 2040, and Nigeria will be taken by surprise, hence the need to diversify the source of government income and telecoms is one big market that government can easily rely on for revenue generation if it is well supported and positioned.

 

How will you want government to position the telecoms sector in order to expedite economic diversification?

Government should see the telecoms business as a long term investment that is capital intensive and therefore should support the telecoms sector to attain better growth. The infrastructure bank I am talking about, for instance, should be able to give loans easily with single digit interest that is between one and nine per cent. What the money deposit banks collect as interest is 30 per cent and above with collaterals and all these make it practically impossible for small operators to access loan from deposit banks for business expansion. So government must support the telecoms industry, invest in it and make quick returns through economic diversification in the telecoms sector.

How will you describe the 9mobile experience that took $1.2 billion loan from a consortium of 13 banks in 2013 and was unable to pay back, based on the terms and conditions of the loan?

The 9mobile experience is an unfortunate one that I will not like to discuss, because it is not clear to me what the terms and conditions of the loans were. But the bottom line is that if they were financed by telecoms infrastructure bank, they would not have had issues the way they had.

 

How can the present competition between the big and small operators be addressed?

Regulation is important to address the issue and limited mobility licence that confines operators to a particular coverage area, should be revisited by the NCC. The regulator should wade into the matter of under pricing and stop the bigger operators from stifling the operations of the smaller operators. The big operators should be given condition not to sell beyond certain limit in order to allow the smaller operators to remain in business.

CONSUMER INTERVIEW 

 

Olabode: Research and Strategy, Core to Successful PR Practice

The Executive Director, Strategy and Corporate Planning at CMC Connect, Burson Marsteller, Mr. Raheem Olabode, speaks on the place of strategy in public relations and perception management, and tasks marketing communication practitioners on the need to deepen their knowledge in order to remain relevant. Raheem Akingbolu brings the excerpts:

 

The last few years have been tough for marketing communication practitioners, with many agencies complaining, while many have gone down because of recession. How has CMC Connect been able to weather the storm?

 

I would say it’s not by our strength. We thank God for his support. But the first thing is corporate governance; that is what is keeping us. When I say corporate governance, even as executive director, I know my limits in terms of approval and the type of structure that we run in the organisation to see that we make everybody accountable. We are very analytical here. We analyse things, look at the economy and analyse. This is an advantage because we have people coming from other professions. We have seen recession even before it came because we do quarterly analysis of happenings around economy to see what we need to keep us in the business: like cutting down cost, improve our retainership, improve quality of service and multitasking. We got to a situation whereby if you cannot do four things, we can’t employ you. So, if you are a media person, you must understand research. And for the fact that we have a board of directors which we report to on quarterly basis to plan the year, control cost, look at the revenue. We also have an approval process whereby if anything is not adding value we remove. We had about 38 staff, so we quickly cut down and pay better remuneration to those we have. We compensate for the multitasking. We were also able to identify some sectors in the economy which we know that with the nature of their businesses, no matter how bad the economy is, they will still be relevant. We try to keep those accounts; to ensure that whatever it takes to service it is what we do. And we thank God CMC Connect is waxing stronger, even during the recession, we are able to diversify. As it is now, we are managing four companies in CMC Connect. CMC has turned into a group of companies. We have digital arm, we have public affairs, and others.

How did you find yourself in the PR industry?

To start with, I’m a chartered accountant before veering into public relations.  Though, I started practising accounting, but accounting for me was just the foundation. I needed something beyond accounting. I earlier worked with Marketing and Media; that was what brought me to Integrated Marketing Communication, though from outdoor perspective. I was the head of finance there before joining CMC Connect. Coming in and looking at the vision and work practice of the company, I saw that I joined an organisation where you can become what you want to be. So I picked interest in communication. Going by the support of the team that led me to where I find myself today.

When your company came up with a teaser; ‘wanted, square peg in a round hole’ it sparked debate. How can you relate it to your transition from accounting to Public Relations?

 

I could remember I did a presentation to the council of ICAN when we managed the ICAN reputation and branding. I told them frankly that beyond accounting, there’s something the council need to let accountants know and that is the fact that Accounting sound monotonous. For instance, if you came in as a communications person and you have to report to an accountant, you ask what does he know and why reporting to him? But I have shown that you don’t have to be a mass communicator to practice communication, though that may give you an edge. We have someone who came in as a lawyer and who functions well in strategy in our company. We have someone whose core area is research, but now she writes proposals and do client service. We adopted the strategy of grooming. For you to have human development, you must groom: grooming and mentorship for people who have basic skills beyond mass communication. One of our staff is an engineer and he’s the head of strategy. We have those who studied agriculture in the banks today. For you to manage a communications firm successfully, you need all these skills across. So this business is not mainly for those that read mass communication.

 

Accounting and PR are two different worlds, how was the transition like?

I had a vision when I joined CMC, though my designation was head of finance and admin. Whenever my MD said we have an accountant, I would say I was not an accountant because there’s a perception around who an accountant is. I remember then that we were preparing a budget for 2004, all the departments were tasked to do a presentation and I told my team in finance that I want us to be the best, despite the fact that we are not used to doing presentation. We presented and we became the best at that time. That gave me the confidence that there’s nothing big in this thing. So I set a vision for myself to be one of the top at CMC Connect. I picked interest and invested in myself. I was doing self study; buying books and attending conferences, paying more attention to operations from the media and client service side. Going by my background, I’m a strategic and logical person. That gave me insight that it is about logic and life. We communicate every day. We say sensible and insensible things which mean there’s logic to it. So every aspect of communication, I tried as much as possible to run a study on them. My role then was after they have deliberated, we need to put finance to everything. So when I see ideas, I can tell you that this idea cannot deliver the objective. So that gave me insight at the time.

 

What are the things that really shaped your skills in the industry or it’s your talent?

 

In the area of skill, I am a skilful person. I am an analytical person. I look deep down answering the five Ws and H. I have listening skills and I write; about the industry, government, the economy and happenings around. I only worked for four months as junior. My promotion was very rapid. I was like 22 year old when I qualified as chartered accountant and my knowledge then gave me an edge over my peers. I am a confident person. I challenge authority because I am not in any organisation to just say yes: I am there to contribute. I am also a research person. So it was so easy for me to strategise. Qualification wise, I have traversed many fields; the capital market, accounting, banking and finance, management and stock broking. In nutshell four things worked for me; my background, skill, inspiration and the fact that my MD, Mr. Yomi Badejo-Okusanya’s belief in my capacity. The kind of challenge he gave me then opened my mind to how to be a better person in the industry. I know how I met the company and I remember his frequent statement that we have to tell a good story of CMC connect in the nearest future. So the challenge and the combination of these things made it easy for me to transit from being a finance person to a communication person.

Your key strength is strategy development. How have you developed the skill?

I would say it’s my life and a gift from God. Strategy is how you get things done. When I was in ICAN class, I was being called minor because the people in class then we’re working, I wasn’t. When I see things, I break it down and set a way to overcome the challenge. Enhancing that skill in me, I would say it’s ability to feel that I can overcome any challenge. I see every brief as a challenge and breaking the challenge down to get a solution. It’s just a natural thing.

Talking about your background, what value do you think other professional skills can bring to public relations?

Mass communication is though an art and social science discipline, but other skills can make it more scientific. For instance, the major challenge is how you can measure what you are doing. And you realise that you need research: you need the value you are proposing, value determination and prove what you have added. Most mass communicators, the skills they have is writing and ideas, but we have come in to articulate everything is such that when you are presenting a case, the person can mirror himself in what you have. If an accountant is presenting a performance, no matter how historical it is, you must interpret the figure. So combining these has really changed the profession. For instance, here, for you to be the group head, it’s not just to say you are a media person, we look at skills across. If this business is left in your hands, can you deliver and take it to the next level. The input of these professionals is making PR more challenging and interesting.