Sean Hsu is the chief executive of NETCOM Africa, a Lagos-based technology solutions company. He spoke with Emma Okonji on the need for businesses to adopt the right technology solutions that will enable them stay ahead of the competition, among sundry issues Excerpts:
Tell us about NETCOM Africa and what type of ICT solutions you offer?
NETCOM has been in business since 2004 as one of the foremost internet service providers in Nigeria, and we try as much to stay ahead of competition. We have over time deployed cutting edge infrastructure technology solutions such as VSAT, WIMAX, radio and as of today, fibre technology, as well as, managed IT solutions such as Cloud PBX, ERP, CRM, SaaS, HaaSas and IT outsourced services. Now we can be seen as a front runner in the area of transformational IT solutions for business. We also try as much as possible to engage organisations and ensure that they lead their market space by keeping abreast of the rapid changes in IT innovations. This is one of our strengths. Through a team of our experts and in line with global best practices, we deliver transformational IT solutions. With a 24/7 dedicated support team, we can be said to be one of the best in the country. From our team of network engineers, system integrators, and application developers, we have been able to bring global best IT solutions to Nigerian firms.
We are leaving the CAPEX business to more of an OPEX based model with managed solutions like Enterprise Resource Planning (ERP). This Is the new narrative of NETCOM. We are going to use technology to our advantage. Instead of high hardware costs, which are eventually outdated with time and need replacement, we charge on per user basis.
What are the basic challenges of running NETCOM Africa?
Well, it is obvious and power is very critical. Our major challenge is power. We have a data centre as well as our network across the country. We need power to run and affordable power is not available 24/7 in Nigeria. That is a big problem that limits all businesses. Another critical issue is that we are in a country that no news turns out to be good news; this is in the area of customer/client feedback. I think no news should be bad news because we are in a service industry and we need feedback. It isn’t just a Nigerian problem but a global one. We have to get feedback, be it positive or negative, it helps us to grow and improve. In spite of the challenges, we try to provide the best of services to our customers and every customer that host data with us or have their data warehoused In our data centre facility, has never had any cause to complain over the years.
NETCOM is more of a customer-centric organisation. How do you respond to customers’ calls, even at odd hours?
To answer your question directly, Yes! We have a round the clock non autobot response, even at IDC hours of the night. We deploy this and have humans round-the-clock also. When people come to NETCOM, they are buying NETCOM for our reputation. We have grown NETCOM as a brand built on quality and trust. One key thing for us on the Internet Service Provider (ISP) side is that we have substantial capacity on all subsea fibre cables and we leverage on these facilities. At the end of the day, we are interested in uptime for clients. We do proactive monitoring and also deploy SMS alerts. We try to engage proactively with customers in real time. We notify our customers of information that they might not be aware of and this has made us to be transparent and customers are pleased. So we don’t take customer feedback lightly. For our managed IT solutions, every single product we provide, we have a NETCOM flavour on it. Let’s put it this way, say an organisation buys Office 365, we manage the service end to end; from migration to configuration, customisation, and support. We encourage businesses to focus on their core businesses and let us manage their IT. In all honesty, from InfraCos to managed services, we use technology to help organisations increase their productivity. We listen to our customers, who have asked us for the past eight years to help them internally, which is why we evolved our business model from just an ISP to Managed IT Solutions, Outsourcing, and IT Consultancy. If Right of Way (RoW) issue can be sorted out In Nigeria, then the cost of broadband would reduce drastically and last mile penetration increased.
NETCOM has changed its business process and model. What really prompted this?
The transition is a matter of economics, the margins on data are small, it’s around three to four per cent and this is not sustainable. The cost of doing business is high and as an organisation, for one to still stay afloat in a highly competitive market, there is a need for evolution. Let us look at this example; data sales need so much volume now compared to when we entered the market 14 years ago. The internet penetration in Nigeria is in major cities and the rural areas need satellite, which is not economically viable. But in managed services, you can make some decent margins. That is why we have to diversify, and in technology there is constant evolution. At the end of the day, we have to look at costs, prices, and margins, and that is why we did a transition. When we started out, the culture in the company was like “we are fine, why change”, but today everyone in the company embraces change because we are trying to predict the future of business, which is business intelligence, analytical intelligence that is the future. Companies are beginning to come to terms that as they mature they might not have that 10 per cent profit or more. The profits would shrink because of the ever evolving market, sophisticated customer base and competition especially in a stable environment. How do companies get to be viable? Its business intelligence, which is by analysing data and having analysts connecting the dots. That is the future and that is the space we are playing in.
NETCOM can be called an early bird operator in data centre service offering. What are you doing to make Nigerian firms host their data in Nigeria?
In terms of data centre services, we are ISO certified and this is international certification recognised globally and we ensure we keep up to these certifications. We also have reputable partnerships with international carriers like TATA Communications and Avaya. We are proud of our international partnerships and we have rigorous workflow and service level agreement (SLA) policies that we follow. I think in terms of an industry like banking, there is a policy restriction that stops firms from hosting data outside the country. They must host in Nigeria. Even in the United States, big companies found it difficult to host in the cloud. Amazon, Azure, Microsoft, and Google, they have services to secure data, that is the fact. Let’s look at it, if someone wants to rob you, the thief would monitor you when you go to work, when you come back, etc then he would strike. That is the same thing like hacking. The key is that you have to be able to protect, detect and resolve quickly. We do our best to protect our clients from these attacks.
How will you assess the Nigerian ICT ecosystem?
The biggest barrier in Nigeria’s ability to leapfrog the ICT space to the next level is the Right of Way access. This is imperative. I lease three different fibre links to Port Harcourt, we have three to Abuja and two to Kano, sometimes operators share fibre ducts. I wish that NTEL, which is the former NITEL has a deal if they can deal or sell off their right of way. They are sitting on goldmine, if they can free up the Right of Way, then it means that access would be there. Also, we would need the cooperation of government from the highest-level right down to the villagers and local communities. If Right of Way issue is addressed in this country, it will go a long way to reduce the current high cost of broadband.
Can Nigeria still achieve the 30 per cent broadband target by the end of the year?
It is just a balance and economics. To achieve 30 per cent broadband penetration by the end of the year, there needs to be incentives given to ensure the private sector delivers on its promises. Not all parts of Nigeria are economically viable, some rural areas and dwellers there might not be able to afford the cost of broadband. The private sector is here to make a small profit and the government has good intentions to drive broadband penetration, so there must be a middle ground where a private investor can deploy these services in the hinterlands. This is what is done in Korea, the government has given incentives and tax relief to operators, which frees up capital to invest in building out the infrastructure of the entire country. To be honest, Nigerian Communications Commission (NCC), the telecoms industry regulator, is far more open than the regulator in South Africa, in terms of broadband access to the citizens. We will get there but it might take some time. The recent award of licences to Infrastructure Companies (InfraCos) by the NCC will shorten that timeline and help us possibly achieve the short term goal of 30 per cent broadband penetration by the end of 2018.
What is NETCOM offering customers this year that will be different from the services of other IT solution providers?
You know Nigeria is still recovering from recession, some industries are recovering and some industries might not recover. If you look at the purchasing power, the naira devalued by more than 50 per cent and this has made us to look at working smarter, more efficiently and increasing productivity. We are leaving the capital expenditure (CAPEX) business to more of an operation expenses (OPEX) based model with managed solutions like ERP. A lot of managed IT solutions today are paid per user, so we have to look at that direction and we hope that Nigerians would start seeing the better value that NETCOM brings to their business. It is not just about cost anymore, the question decision makers should ask is how much can I increase my productivity, which equates to revenues by making this investment? Another exciting direction is our partnership with Avaya. The big PBX in your server room is a thing of the past and it’s now in the cloud, and your desk phone is not even needed.
What is needed is just an APP on your smart phone or laptop. This will change the way companies do business. You don’t need landline again. You can be anywhere in the world and you can take PBAX call on your phone. Businesses need a company like NETCOM to bring these new technologies to help transform them. We can come to your company and help you with the best technology solution for your business. We are more of an IT consultancy firm now. We want firms to be more profitable in Nigeria by leveraging on new technologies.