Managing Director, VDT Communications, Mr. Biodun Omoniyi, spoke with Emma Okonji on the company’s expansion plan into retail broadband service, and the need for government to protect indigenous ICT companies. Excerpts:
What is your view about ICT regulation in Nigeria?
Regulators need to come up with policies that will protect indigenous companies and help them to survive, rather than relying so much on the gains from foreign multinational companies. For some time now, there has been policy summersault in the industry and in the country, which is not good for business growth and sustainability, especially with indigenous companies. But even at that, I still give kudos to the telecoms regulator, which is the Nigerian Communications Commission (NCC) for its initiative in promoting telecoms business with workable policies. But we still need them to do more in the area of protecting indigenous telecoms companies.
Broadband penetration has reached 33 per cent but Nigerians still lack ubiquitous broadband access, especially in the hinterlands. What is your view on this?
Yes, broadband penetration is increasing and we are happy about that as a business but we need ubiquitous broadband to work with, and also to operate in the hinterlands. Operators are afraid to invest in broadband in the hinterlands because of the low commercial value of the business over there, unlike the coastal areas where we have beehive of broadband activities. We need capital to invest in the hinterlands because taking investment to the rural communities and the hinterlands is quite expensive, and that is what the Universal Service Provision Fund (USPF) of the NCC seeks to address.
Having been in the ICT industry for over 18 years, what in your views are the best policies government should implement to enhance industry growth?
Government should begin to think of policies that will enhance innovation and growth in the ICT industry. If I have the opportunity to influence government policies, I will look at policies that will promote indigenous companies, especially small companies and protect them to enjoy maximum growth. Today, the Treasury Single Account (TSA) is driven by indigenous software called Remita, developed by SystemSpecs. So we need more of such encouragement and support to indigenous companies operating in the country. We also want government to implement policies that will compel government agencies to use technology to drive governance. Technology in governance saves government a lot of money, it promotes growth and reduces corruption. Again there should be policies that will harmonise government activities and address the issue of government agencies working in silos.
VDT Communications was part of Bitflux consortium that won the 2.3GHz spectrum in 2014 that was auctioned by NCC. What is the state of service rollout since then?
Bitflux was set up as a special purpose vehicle to bid and acquire the 2.3GHz spectrum to enhance our strategy for the rollout of retail broadband services to our customers, and Bitflux eventually won the bid. Since 2014 that we won the spectrum licence, we have been using it to provide certain services to customers, but we are now extending the service to retail broadband service for our customers, which was recently launched. So the major product that we have been building on the 2.3GHz spectrum, which is our retail broadband service, has just been launched in Lagos, with plans to extend it to other cities across the country.
Before the launch of the retail broadband service, you were into enterprise business service. How well have you covered the enterprise business space, now that you are moving into retail broadband business?
We have been in the enterprise broadband market for some years, and now we are giant in that field. VDT is known all over the enterprise market for quality and timely provision of services in that market segment. With just three branch offices in 2001 when we started the enterprise business, we have, today, expanded that business to over 35 branch offices across the country and our customers are delighted with our service deliveries. So we want to take that same success to the retail broadband market and ensure that our retail customers also have a feel of quality service at affordable prices.
The retail broadband service is built on your 4G LTE Advanced technology. What makes this technology different from the 4G LTE technology that is known to other operators?
What makes our 4G LTE an advanced technology is because of out kind of infrastructure that we are using to offer the service, which is a brand new infrastructure that was built from the scratch to offer LTE services. Today the world is beginning to talk of 5G technology, which is a technology for the future. So our 4G Long Term Evolution (LTE) Advanced technology platform, gives us an edge over others that are still offering broadband service on 3G and 4G technologies. The added equipment to our 4G LTE Advanced technology is actually advanced with high speed of downloads and browsing, and providing qualitative service experience to customers.
Since 5G technology is the technology for the future, do you have plans to switch from 4G LTE Advanced technology to 5G technology anytime soon?
5G technology is the technology for the future but it is not available in the country yet. Since our 4G LTE Advanced technology is close to 5G technology in terms of speed of operation, we will definitely be one of the first operators to switch to 5G when it eventually gets to Nigeria, because our infrastructure is primed for that already.
How will your expansion plan from enterprise broadband service to retail broadband service help Nigeria to achieve its dream of digital transformation?
The digital age is already with us and we are currently playing in that space. So with the rollout of our retail broadband services, it will further boost our chances as a nation to achieve digital transformation, because most of the services that will be supported by our retail broadband service are geared towards digital payments, which will definitely improve our chances of digitalising the country’s operations, including government services. Many payment service providers have been licensed by the Central Bank of Nigeria (CBN) and they are riding on our technology to provide digital services to the people, which is a sure way of achieving our digital transformation drive as a nation.
VDT is one of the operators whose services are clustered around Lagos and its environs. What are your plans to extend services beyond Lagos to the hinterlands where your services are also needed?
We have expansion plan to go beyond Lagos, but operators that cluster around Lagos and offering services around Lagos should not be blamed because Lagos is the economic hub of Nigeria. Most of the operators are mostly funded by private capital and they need to make returns, hence the concentration around Lagos where several activities take place and where the chunk of the market is. But even at that, Lagos alone does not represent the entire Nigeria and we are aware that our services are needed in several areas outside Lagos, hence we have expansion plan to go behind Lagos. From the Lagos launch, we plan to extend our services to places like Ibadan, Onitsha Abuja, Port Harcourt, and Kano. After covering these cities, we will further move to cover ten other major cities in the country.
Now that VDT is venturing into retail broadband service, it is likely going to face the challenge of right of way from state governments in deploying its services. How do you intend to address the challenge?
Right of Way (RoW) has been a major issue to telecoms operators who want to expand their networks and need to lay fibre optic cables for expansion, but the fastest way to expand and reach the masses, is through wireless technology, and the wireless technology also requires fibre connectivity to link the different base stations. So both the wireless operations and the fibre optic operations use fibre connectivity and therefore need the RoW access to lay fibre cables, which often times is a challenge as state governments come with all manners of restrictions through arbitrary charges before issuing licence on RoW. But with our 4G LTE Advanced technology, we will be using high broadband radio interlink to connect to base stations, even though that is not the best way to link base stations because we need backup links to our backhaul. Government must do well to provide unrestricted access to Right of Way in order to expedite the process leading to network expansion.
How will you cope with market competition in the retail broadband market where other players already exist?
Focusing on retail broadband is a natural evolution for us and competition will not deter us because we are simply living our vision. The retail broadband market is big enough to accommodate us and we are going there to make a difference with our technology that provides affordable and reliable services. We are just out to deliver qualitative retail broadband service to the people.
VDT is expanding at a time when Internet Service Providers (ISPs) are going out of business, no thanks to harsh economy, what has kept VDT afloat?
It is true that we operate in a very difficult economy and in a harsh business environment that have forced many ISPs to go under, but here we are waxing stronger based on our application of some basic tenets, coupled with the Grace of God. We have learnt to maintain singular focus in business and it has helped us to remain in business all these years. Again we have a dedicated team of staff members who also key into the values of the company and have shown a lot of commitment to the growth of the company. When we started 18 years ago, we were focused on our line of business and we became master of the business over time. Some ISPs went down largely because of the type of technology they built on, which is the CDMA technology that was later overtaken by better technology, which is the GSM technology. The CDMA technology did not have alternative and expansion became very slow, unlike the GSM technology that is flexible and can ride on other technologies.