Omoniyi: Investment in Infrastructure Will Enhance Service Quality
The Group Managing Director/CEO, VDT Communications, Mr. Biodun Omoniyi, in this interview speaks about the successes and challenges in offering retail and enterprise solutions and the need for collaboration and investment in infrastructure to enhance service quality. Emma Okonji presents the excerpts:
What is your view on technology evolution from 2G to 5G and how have these technologies impacted on service quality?
Service quality is factor of so many variants, including the ability to invest in infrastructure. We have moved from 2G to 2.5G and to 3G, 4G and 5G and all these technologies have positively impacted on the telecoms sector and other sectors of the economy. Most times telecoms operators face insecurity challenges and threats to telecoms facilities and all these could affect service quality. If one telecoms site is vandalized, it can cause ripple effect on other sites that are connected to it. Again if there is a cut on the backhaul transmission cable, it can adversity affect service quality. So we need uninterrupted telecoms facilities, including investments in telecoms infrastructure, in order to to achieve better service quality.
At what level is the telecoms industry operating, with regards to taking advantage of the USPF funds provided by NCC, for network expansion in rural communities. Have operators been able to access the funds?
The Universal Service Provision Fund (USPF), which is being offered by the telecoms industry regulator, the Nigerian Communications Commission (NCC), is like the equalisation fund that we see in the petroleum industry. The USPF fund is meant for network expansion in rural and underserved communities, but most operators tend to concentrate on urban areas where they can make quick returns on their investments, rather than going to rural areas where patronage is low. The essence of USPF fund is to encourage operators to develop rural areas that may appear unprofitable at the moment. What the NCC did was to use certain percentage of the money from Annual Operating Levy (AOL) for USPF and only operators that are willing to invest in rural communities, have access to the fund. VDT is expanding in the some parts of the rural areas and we are working with NCC to achieve further expansion in the rural and underfed areas of our country.
You play in the data space, where revenue for data is fast growing while that of voice is depleting by the day. The bigger operators are beginning to shift operations to data. As a small industry player, is VDT threatened by the shift from bigger operators?
The revenue for voice did not actually drop. What dropped significantly, is the rate of growth in the voice segment of the business, because technology evolution is beginning to compel people to do more of data than voice. For VDT, even though we are small industry operator, our business model has been centred around data from the very first day of our operations and we are not threatened by the incursion of bigger players into the data space, even though they were predominantly voice operators. The reason for this is that our services complement that of bigger operators and we partner them to provide quality service to customers. Currently the data market is expanding because more people are using data and we all can comfortably play in the data space. In the data market, the enterprise is even slowing down because most of our enterprise partners like the banks are not opening new branches while some are even closing down existing bank branches because technology has made it possible for them to provide online services that enable bank customers to carry out financial transactions online without visiting the bank branches. So what we are doing in VDT is to do more of retail business where we have more customers to service. So we are deepening our presence in the retail market to provide data services to individuals.
What propelled you into providing telecoms services and how have you been surviving in the last 20 years amid competition?
My motivation to become a player in the telecoms industry, providing bespoke telecoms services, started from my school days in the university of Ilorin, where I studied engineering. At my final year as an engineering student, I had the push and zeal, as a communication/computer student, to become a provider of communications services to people after graduating from the university. After graduating, I worked in a engineering company as Computer Engineer, handling systems integration and maintenance. While working there, I developed the interest to build networks and I was building networks for customers, and ensuring that different computers align and connect with each other in a seamless communication flow. That was 36 years ago, doing what I loved doing. From there, my dream to provide communications services, came true and I applied for a license to operate VDT Communications. At the onset in 2001, we started operations with 14 staff addressing just five points of services, but today we have grown to 400 staff, attending to 143 points of services across the 36 states of the federation. For the question about surviving in the last 20 years amid competition, I will say it has not been easy doing business in Nigeria in the last 20 years, but we remained focused in delighting our customers and meeting their needs and that, among other factors, have brought us this far. So I had good knowledge of the industry, I had love and passion for the kind of services that we offer at VDT, and the opportunity to provide the services, also presented itself, and these have been my driving force.
Could you share some of your strategies that kept the VDT business afloat in spite of the negative effect of COVID-19 on businesses?
COVID-19 is a pandemic that affected global economies and businesses, but for some of us in the technology space, COVID-19 presented us with an opportunity to develop alternative strategies and solutions that have become the new normal for surviving businesses. The truth is that challenges also come with opportunities, but it takes skills, knowledge and patience to identify the opportunities and leverage on them. For us in the technology and telecoms industry, it was easy for us to migrate online and still keep in touch with our customers during the COVID-19 era, when economies were shut down and people were isolated from each other.
How has the suspension of Twitter operations in Nigeria affected your business, since VDT plays in the data environment?
VDT is a customer-centric organisation and our focus is on customers who make use of our connectivity services. We provide Virtual Private Network (VPN) for customers but that is strictly private to gain access to connectivity. We also have VPN servers in the cloud where people can log on to and get connectivity to carry out several online activities. So the suspension of Twitter operations in Nigeria is not affecting our business growth. We have built security around our networks to protect the data of customers. The Nigerian Data Protection Regulation (NDPR) is another policy that is helping to protect customers and organisations’ data.
How is the high rate of foreign exchange affecting communications business in Nigeria?
Communication services, which we offer, have to do with different equipment that are not manufactured in Nigeria. So, we import every communication equipment that we use in Nigeria and we need foreign exchange (forex) to import communication equipment. The strength of our Naira currency has been weakened against the dollar and this has raised the rate of forex and access to forex has been difficult too, which of course is affecting our business in Nigeria. Since the COVID-19 pandemic, the naira has lost its value the more and it is telling on importation of communication equipment because Forex has gone so high and access to Forex is even a nightmare. Before COVID-19, the value of Naira was N360 to $1, but today it has jumped to over N500 to $1, which is now eating deep into our revenue.
So what is the way out of this challenge?
The best way out of this challenge, is for government to protect and promote indigenous manufacturers of communication equipment. The need to promote indigenous manufacturers is to cut down on importation of equipment. Again government must give ample opportunities for telecoms and communications operators to have easy access to Forex in the interim. As of today many operators do not have easy access to Forex.
Lagos government is laying fibre optic cables around Lagos with ducts that will enable telecoms and communications service providers to connect to the cables. What is your take on the Lagos project?
From history, government has never been a good manager of public business. So, if Lagos government is laying fibre optic cables with a view of commercialising it, then Lagos government needs to be more careful about that project and ensure it does not end up abandoned like other government projects in the country. If the project is eventually completed, access to connectivity will be exorbitant because the bottom line will be for government to use it to beef up its internally generated revenue (IGR). Yes the intention to provide fiber connectivity for broadband in Lagos is good, but the management may be herculean and at the detriment of broadband service providers who may want to access that connectivity service. From history, government has never been a successful business manager because government is transient and new government will always come up with its own policies and implementation strategies. The duty of government is to provide the enabling environment for business to thrive and not to be involved in managing business.
How robust and resilient is the VDT network to accommodate free data services from 8pm to 6am daily as advertised by VDT?
We are currently expanding our network to provide additional capacities that will enable our customers to do more. The network is robust and resilient to accommodate more subscribers that will want to take up the opportunity of free night browsing. However, the free service is offered to only those customers who subscribe to the plan. So to enjoy the free night browsing, the customer must first subscribe to the plan and our network is resilient enough to accommodate more traffic, if customers that subscribed to the plan, decided to do more of online connectivity at night time.
In 20 years of successful business operations in the retail and enterprise business, how will you describe your greatest moment?
In 20 years of operation at VDT, I will say I have so many experiences to share, but my greatest moment had always been the joy that I derive when customers are delighted and satisfied with the quality of services we offer them. We have delighted our customers in so many ways through our service offerings and they are happy with our services and this gives me great joy and great moment. Today we are closer to our vision than we were when we started 20 years ago. God has been faithful to us and we are grateful to God.
What are the differentiating factors between Small and Medium Enterprise (SME) and the Adaptive Private Network (APN) service that you offer?
The SME service that we offer, is a mini version of our enterprise service and is offered in gigabytes. The APN service that we also offer, is a SIM retail service to Mobile Network Operators (MNOs). While the APN service is SIM activated, the SME services offering is not SIM activated. The federal government intends to cover 90 per cent population and a landmass of 70 per cent in its national broadband plan by 2025. What will be VDT’s contribution in achieving government’s plan for broadband penetration? In am pleased with the bold ambition of government concerning the broadband penetration target. The truth is that government alone cannot achieve it without contributions from industry players and stakeholders like VDT Communications. 90 per cent population coverage and 70 per cent landmass coverage by 2025 is a tall order but achievable through collaboration with industry stakeholders. To achieve the target, there must be increased investments from among industry players, and VDT is fast expanding its services to provide connectivity to more organisations and people. We have plans to further deepen our retail strategies and offerings to customers in the next five years. We are investing in broadband infrastructure to boost our retail and enterprise service offerings, and we are doing so in every state of the federation. Through our expansion plan, we will be covering more organisations and homes, thereby helping government to achieve its broadband target.