President, Association of Telecoms Companies of Nigeria, Mr. Olusola Teniola, in this interview speaks on the need for right policy adoption to grow the Nigerian economy. Emma Okonji brings the excepts:
ATCON had its AGM last week, and some vital issues like fund repatriation were raised. What are the strategies to address the issues raised?
There is no sector of the Nigerian economy that has no issues to address, and we had reasons to address our own issues at our AGM last week. The truth is that our members are in business to make money and in the process, serve the nation, but they need clear direction from the regulatory body, the Nigerian Communications Commission (NCC). Our members invest in building their networks and therefore are legally permitted to make profits and spend such profits at their discretion. So the issue of funds repatriation in business is not out of place. What our members need is actual direction to know exactly their limits to national investment. The recent threat by Nigerian Civil Aviation Authority (NCAA) to destroy 7,000 masts belonging to telecoms operators, which the government did not invest in, calls for concern and this is one of the national issues raised at the AGM. It is an act of impunity for government agency to threaten investment made by telecoms operators, which the government has no input, and this calls for serious concern. Government must create the enabling environment for our members to operate upon, and we will not relent in bringing these worrisome issues to government’s attention.
Based on the threat from the NCAA, what does ATCON expect the NCC to do in addressing the situation?
NCC must rise to intervene and stop the NCAA from carrying out the threat, for the purposes of maintaining better service quality and for national security. NCC should also warn the NCAA to stop threatening investment that they did not contribute to build. I am aware that NCC has intervened and I hope the threat is reversed, based on the intervention because we cannot sit back and watch our investments destroyed by those who do not contribute in building them.
What is your view about the proposed merger and acquisition in the telecoms sector?
Merger and acquisition in the telecoms sector have become necessary for the purpose of business continuity, and they will come in various ways. Some will be mergers between two financially strong telecoms operators in order to present a formidable force in the telecoms sector, while some will be outright acquisition of financially weak telecoms companies, by the financially strong to avoid business extinction.
Whichever form it takes does not really matter, because the end result is about consolidation for better telecoms services delivery. Consolidation is necessary because the telecoms sector is currently passing through a transition phase, with technology disruptors emerging, and riding on the networks of others to achieve success in their business models. So the bottom line is that telecoms operators must consolidate, innovate and come up with new business models in order to survive the current transition phase. Data centric is gradually overtaking over voice centric and operators who initially depend heavily on voice centric service deliveries, must begin to innovate in the areas of data and data analytics in order to remain in business, and acquisition and merger are sure ways to achieve this.
What actually triggered the need for merger and acquisition. Could it be that the telecoms market is shrinking and no longer attractive?
Not really so, because the market is not shrinking and it is still attractive, but the truth is that technology is evolving and disruptive solutions are equally emerging, which calls for innovative thinking about survivability and business continuity. One of such innovative thoughts is about consolidation among members through merger and acquisition. Consolidation will help the telecoms industry to grow in line with technology transformation and to create more jobs for the country.
What is ATCON doing to promote digital transformation in Nigeria?
Digital transformation and digitisation are no longer new to us, but they are things that shape the mind-set of our members in the telecoms industry. We have since been playing big in the entire process of digital transformation and our financial transactions in the country have gone electronic and digital. Government has a major role to play in promoting digitisation through better policy formulation and implementation that will boost infrastructure development. Our members have been promoting digital transformation, through innovative solution and they are also using their resources to provide the basic infrastructure, but we need government to do more in providing the enabling environment through basic infrastructure that will drive digital transformation in Nigeria.
Broadband penetration is on the rise according to recent statistics, but Nigerians need ubiquitous broadband to access the internet to enable them do more businesses online. What is ATCON doing to promote broadband access in the country?
Broadband is key to national development and Nigeria has already achieved 33 per cent broadband penetration, with plans to achieve 70 per cent penetration by 2023. After Nigeria achieved 30 per cent broadband penetration in December last year, ATCON came up with a new target for the next five years and government bought into the idea and then set another target of 70 per cent broadband penetration for the country by 2023, and our members are working towards achieving this new target. So influencing government’s position on national issues like broadband penetration and access, is actually one of the ways we are promoting ubiquitous broadband access in the country.
So what are your members doing to help the country achieve its 70 per cent broadband penetration by 2023?
Our members are already investing in 4G network rollout, which offers higher broadband speed than the 3G network. Already most parts of the country have been covered by 4G network and by the time the country is fully covered by 4G network, it will bring online activities to speed and also access to the internet will be cheaper, thus enabling more Nigerians to become digitally inclusive, which is a pointer to further growth in broadband penetration. Our members are playing their roles well, but we need government to provide the enabling business environment in the area of infrastructure development that will further boost broadband penetration and access. The key thing that will drive broadband penetration is investment in the technologies that will help to drive it, and we need government to do the needful that will enhance the ease of doing business in the telecoms sector.
What is your take on 4G rollout in the country when Nigeria is predominantly covered by 3G services?
The 4G rollout is ongoing and it is a gradual process. Before 3G network, Nigeria survived with 2G network. It is better to look at the progress made in the telecoms sector than to begin to compare Nigeria’s telecoms growth with developed nations of the world. So technology evolution is in phase and I am sure that in no distant time, the entire country will be covered with 4G services before looking at 5G network that is existing in some advanced countries of the world. The 4G network offers 21 megabits per second, which comes with high speed video streaming, with opportunity to download documents in seconds. But the challenge is that if we have infrastructure that is not backed by fibre, and we rollout 4G or 5G network in such area, what it means is that services will run at the weakest links. It is for this reason that we kept emphasising that 4G and 5G networks are not really about speed of delivery only, but also about fibre that demands the rollout of fibre infrastructure.
Are you concerned about the views of some of your members who are not pleased with the idea of shopping for foreign investors by the telecoms industry regulator, when some of them have the capacity to invest in the country if given the level playing ground to do so?
The federal government, through the NCC had always shopped for foreign investors at international fora. Vice President Yemi Osinbajo had done same in the past. Government has its reasons to sell Nigeria to foreign investors because government believes in the power of foreign direct investments (FDIs) to the growth of the Nigerian economy. But historically, Nigeria has been known as a trading nation because the British colonial master that colonised Nigeria, had no intention to develop the country but to position the country as a trading nation that imports virtually everything via trading, and that has been ongoing, even after we were gained independence 59 years ago. But our members are saying that we have local players that can invest in the country if given the enabling environment. We have the capability and if given the right playing field, we can actually contribute to GDP of the country for national development.
Today, India is the leading country in software engineering because their government invested in ICT and provided the enabling environment for rapid growth in software development. So the idea of government getting money from foreign investment to grow the Nigerian economy must stop, and government must begin to look inwards to invest in Information and Communications Technology (ICT), and support local investments in ICT in order to grow the Nigerian economy.
What kind of investment in broadband infrastructure for instance, do you expect from the government?
Broadband infrastructure is a national asset that needs to be invested in through tax payers’ money. But what we see today is that government has left telecoms development in the hands of the private sector. Backbone infrastructure that is expected to transport national broadband from the shores of the country where we have avalanche of submarine cables, to the hinterland where the demand is high, is being left in the hands of the private sector to provide, which is a mismatch for a country like Nigeria. So I expect government to invest in national backbone infrastructure that will transmit broadband capacity from the shores of the country to the hinterlands, where demand for broadband connectivity is on the rise.