Scaling New Heights:2009 In Retrospect(A Review of the Telecoms Industry in 2009)

Telecommunications and banking in any economy can be likened to siamese twins. This is because there is a symbiotic, interdependent and self-reinforcing relationship between both sectors as they individually and jointly stimulate as well drive, the economy. So when global telecom players tried to convince us of their immunity, given what we knew was going on in the economy, we did not believe them. Events somewhat justified our scepticism.

 

At home and abroad as we proceeded into the year 2009, we began to understand the chicanery that brought us to within a whisker of complete collapse. As businesses went to the wall and repossessions increased, bankers and banking became an unpleasant euphemisms. Some chief executives were put on 24hour watch, some earned police surveillance, some got arrested and a few got sent down. Ponzi schemes and all manner of fraudulent chicanery were forced out of hiding in file cabinets, paper saved from shredders and massive irregularities were revealed. Financial institutions were summarily stripped of the “reputable” adjective. Nigeria was not without its own thrilling episodes.

 

But in the Telecom/InfoTech industry, the story was somewhat different. In both the Nigerian experience and from a universal perspective, 2009 was a mixed bag of the good, the bad and sometimes the downright ugly. 

 

The year started with a new Minister of Communications, Prof Dora Akunyili who was appointed in the dying days of 2008.  She resumed at the Radio House with the vigour and reputation of an accomplished professional and fighter having taken on the scourge of fake drugs and its miners with considerable success. She took her office battle-ready to take on the mantra of being government mouthpiece, which essentially is the job of the Minister of Information and Communications. In an Iron Lady-like fashion, she hand bagged virtually anything in sight and around – telephone tariff, transparency, ‘rebranding’, ‘ hijackers? Not us’ that by the year end yesterday, observers conceded a loud but slow year for the telecom industry. She saw current telephone tariff as deplorable and bore down on it with vengeance attempting to force it down by using best wishes, emotion and bold face. It did not quite work.

 

On the balance, the industry recorded a few isolated wins in these bruising encounters while simultaneously forced to slow down its pace to synchronize with the speed of overall leadership.

 

The Rural Telephony Project

 

The Minister resumed to meet the controversial rural telephone project, a Chinese initiative for Nigeria, into which $200m had been sunk and she read out a list of six telephone ‘operators’ (more like licensees who never invoked their licenses) who offered to buy over the failed project. January 2010 will mark the first anniversary of the handover. Hopefully Ministry officials will give a progress report.

 

Compulsory NEFT

 

Banks and financial institutions still maintained their lead in applying e-processes as they introduced a range of financial products for which telecommunication plays key role just as mobile operators also deployed banks’ automatic teller machines as platform for enhancing their payment services.

 

Federal government insisted, for the first time, that all of its disbursement henceforth would be by bank-to-bank transaction thus giving the National Electronic Funds Transfer (NEFT) its literal meaning in running government business. Although government has given it the “e-payment” nomenclature, it may well have to move full steam ahead in 2010 to implement other related electronic technology inspired facilities to turn what is essentially an e-aspiration into an e-reality. Can there be a true ‘e’ without broadband internet access?

 

Broadband hopes

 

A sizeable number of submarine fibre projects which may turn around Africa’s low internet penetration began to see reality during the year. MainOne Cable Company concluded the shore-end laying of its undersea fibre optic cable in Lagos marking  a critical intermediary stage of installation on the shores of countries where the cable system was expected to berth its origins in Portugal. Ditto for Globacom, both promising good and cheap access in the New Year. Elsewhere on the continent, SEACOM announced the New Transatlantic submarine fibre-optic project designed to encircle the African continent, connecting its coastal and hinterland countries as well as islands reached a remarkable milestone with the completion and commissioning of the phase which links South and East Africa to global networks via India and Europe. All representing progress for Internet development in Africa.

 

ITU Secretary General, Hamadoun Toure, applauded the progress made in the continent when he said in Abuja that the continent has given a good account of itself. He craftily deprecated President Yar’ Adua’s prediction  that Nigeria would attain 100 million telephone lines by the year 2020 as lacking in ambition since recent trends show that the President’s prophecy may be achieved by 2015 if things go fine in Nigeria.

 

Co-location, Wimax, and Number Portability(NP)

 

The issue of co-location was aired when Nigerian Communications Commission in collaboration with Telecom Answers Associates, an indigenous telecoms consultancy company and Helios Towers Ltd a frontrunner co-location licensee brought key industry players and stakeholders together under the Co-location Forum 2009 to deliberate,  coalesce  their thinking, experiences and views on the development of Infrastructure Sharing and co-location as a concept and modus operandi to be embraced primarily by industry. The forum report attests co-location is a worthy cause and the report went ahead to publish industry networking and industry resource data which investors would take advantage as a result latch on to co-location as a viable option of industry management tool.  Telecom answers associates promises that future work on Wimax and NP would optimise the industry database and potentials resources.

 

Marginal reduction in telephone tariff

 

3 years after the last review of tariff of telephone service, NCC commissioned a new study into the subject and came up with marginal downward review of interconnection tariff which served as a basis for deriving subscribers’ telephones charges by operators. It also went ahead to prescribe adjustment on the rates payable among operators at the end of each of the next three years. An industry study had prescribed tariff review, foreclosed and recommended a repeat to determine future decisions. Strange? Not half. 

 

Death Knell of NITEL and eviction of Mtel

 

NITEL, the First National Operator’s continued slide into obscurity shows no sign of abating. It now looks like the government is more confused today than it was two years ago when it shepherded the company into the stable of Trans Corporation International, a.k.a. Transcorp. The purpose-built ‘conglomerate’ of the previous administration was revoked for failure to follow through with the investment and capital injection plan. The parastatal was handed back to the Bureau for Public Enterprises (BPE) to initiate another, hopefully more successful sale. Hoping against hope, they just might be in another relay race. Transcorp of course challenged the government’s action and hinted at a protracted legal struggle, but shortly after its senior executives became guests of the EFCC, the hint rapidly dissipated. 

 

It all seems a far cry from days of old when NITEL was at its pomp bestriding the industry unchallenged. Days when all we had were land lines, poor connectivity and low coverage and when telephone cost an arm and a leg.

 

Death of $100 laptop in Nigeria

 

A few projects commenced by the Obasanjo regime, appear good investment at least on paper albeit in a customary fashion that betrays democratic discipline somehow conveniently got ignored by the present government. One such project was the $100 laptop, which disappeared from the agenda and even more surprising nothing is in place to replace it.

 

Cyber war campaign made an issue in Nigeria

 

The threat posed by cyber criminality on Nigeria’s banking and telecommunications institutions, was highlighted by the President and Co-founder of EC-Council, Mr. Sanjay Bavisi advocating internal Information Technology (IT) policy to be implemented by corporate big wigs. Speaking at a seminar for bank and telecom executives in Lagos, he called for vigilance and companies should deter just anybody taking a mobile phone into a company as this was potentially perilous as rogues could use mobile phones or digital devices, to install malicious software and steal data.

 

“Without human capital and proper methodology in place, it will be difficult to control cyber attacks,” he said.

 

Nigeria’s slow motion raises concern

 

The pace of Nigeria’s transformation to a digital economy continues to be a cause for consternation with Nigerians in the Diaspora impressing on home based that while mobile telephony had somehow fulfilled the major objective of providing communication services throughout the country, we are light years away from what is a digital revolution. Nigeria’s snail pace of reform was highlighted by  what President Obama did not say in Ghana dispatching  Secretary of State Clinton on a whistle stop tour of Africa  to wake officials up and ‘smell the coffee’. 

 

Who did not listen? Those who should.

 

Threat to the Regulator’s Independence

 

The national communications Act 2003, heralded as very apt at its inception, may well just be due for revision. The legislature mounted so much debate and held public forums to suggest a genuine desire to make the regulator better able to fulfill its role and discharge its responsibilities, but is yet to back such talk, or indeed desire, with the propagation of a statutory framework that would bring about changes. 

 

The Act itself came under severe pressure when the independence of the Nigerian Communications Commission was tested with President Yar’ Adua’s belatedly giving a ruling over the controversial issue of 23.5 GHz frequency auction. For reasons of administrative convenience at best, the President overturned a frequency allocation which the regulator had issued but did on specious legal justification. Alas this afforded us a chance to test a critical aspect of the law which had all along been assumed a good instrument of industry management but which was crying out for a review that could bolster the role of the regulator to act faster than it could otherwise have in evoking sanction on erring industry players. But sadly the opportunity was lost.

 

A threat to the independence of NCC represents a direct affront to inward investment which, analysts say, will slow down even more if it is subjugated by ‘here-today-gone-tomorrow’ politicians. Mobitel’s and a few others’ investment might have gone down the drain and its prospective challenge to current players has been curtailed but more importantly, it is the ‘wait and see’ approach that investors would adopt when it comes to squaring up with the industry. Such a shame, more so for the only industry sector that stumbled on getting it right.

 

Lagos State government on its part continued its insistence on taxing InfoTech infrastructure. The move was construed by some as hostile to business. To others, it was a demonstration of the crippling bureaucracy of the Lagos State Government and constitutional aberration of its House of Assembly, but more importantly, it was viewed as extortionist and draconian. To these people, justice prevailed when both the High Court and Court of Appeal ruled that the regulation of the telecoms sector remained the business of the Federal Government.

 

Good Friends we lost

 

The industry suffered a colossal loss of some its most illustrious contributors. This list included, Ndukwe Kalu a patriot who contributed immeasurably within and beyond his capacity toward ensuring online visibility and presence of Nigeria within the cyberspace. The year also saw the departure of perhaps the longest serving minister of Communications in Africa, South Africa’s Mrs. Ivy Matsepe-Casaburri, who died at 71. She was in her 10th year as Minister when she passed away.

 

The Global Economic Recession

 

The year began with the global economic recession claiming its first big casualty in the Telecom industry. As the global meltdown’ beginning to bite, One of the victims to feel its teeth marks was Nortel, – a world class Canadian Telecommunication equipment manufacturer, Nortel Networks. Nortel sources said that phone companies are reducing their orders and figures are going downwards so Nortel has to move fast.  It went to Court to file bankruptcy papers just as it was making a debt payment of over a $ 100million.

 

Obama deploys Broadband investment to stem economic decline

 

The Obama administration ended the year like it began – full of hope and embracing ICT. Carrying the banner of Keynesian economics (socialism to the average American), it named 18 projects that would receive a portion of the $7.4 billion in stimulus funds set aside to bring high-speed Internet to poor and rural areas that have been overlooked by Internet service providers. Vice President Biden announced the government plans to distribute about $2 billion over the next couple of months with the remainder spent on mapping projects or will be distributed in a final round of grants in coming months. VP Biden said the funds were the essence of the Recovery Act sparking new growth, tapping into the ingenuity of the American people and giving them the tools needed to help build a new economy in the 21st century.

 

The World Wide Web was 20

 

In 2009, the world celebrated as World Wide Web turned 20. Not to be confused with the internet which describes the global network of connected computers in a manner that makes it an open platform, the year marked 20 years of sharing of information through a global database of linked pages. What links both is how radically change they have both transformed our lives in the realm of business, pleasure, research and development. The founder of the World Wide Web Sir Tim Berners-Lee is still very much around leading its further development.

 

Somethings never change

 

Public Electricity

 

The greatest malady of the telecom industry has remained inaccessibility of reliable pubic power supply. A 1996 study by Telecom Answers Associates on why internet penetration remained low in Nigeria in spite of high number of licenses issues for service provision reported that much when it said:

 

‘‘…There is a huge gap between demand and supply of bandwidth. The gap is brought about by consumers’ inability to buy bandwidth and this inability is accentuated by an indescribable and worsening access to basic public electricity supply across the entire country…’

 

It was toward the end of 2009 that a veiled suggestion for a truly liberalized electricity power supply industry came from a very unusual quarters. Engr. John Ayodele a General Manager in charge of Operations at Power Holding Company of Nigeria, PHCN, in a Lecture delivered to the NIEEE recommended that the option of ‘Distributed Generation’ (DG) be adopted. Distributed generation refers to the  proximity between electricity production and the place of consumption as a means of addressing the asymmetry between investment, expenditure and demand in the supply of power. The lecture represented the first steps in a long road to liberalization: That is, generation, distribution and marketing of electricity. Though the concept is not new on the agenda of National Electricity Regulation Agency, its implementation had always dogged by a perceived sense of insincerity.

 

2010 Expectations: More or more of the same

 

Industry restructuring, not merger, expected

 

The industry caught a whiff of the Minister of Information and Communications pledging to recommend the merger of the Nigerian Communications Commission, NCC, and the National Broadcasting Commission, NBC, before the end of the year as if it was a new subject. As the year ended not much was heard of the pledge. The reasons given for a merger are at best specious as industry players have consistently argued that what is required in the spirit of driving the industry and economy forward is restructuring via the wholesale review of regulatory and administrative regime in a true, orderly ICT industry.

 

SIM Card registration scheme 

 

Eight years after the first use of subscriber identification module, SIM system of locating users within networks, Nigerian authorities eventually introduced a scheme to curtail the menace of mobile phone handset theft in Nigeria, authorized and commissioned a registry and anti-phone theft system for Mobile phones in the country. The registry and the service are designed that a mobile phone which is reported stolen will be rendered useless as it cannot be connected to any telephone network in the country. The service which will be at no cost but will require subscribers register their 15 digit  International Mobile Equipment identity (IMEI) numbers with the Central Equipment Identity Registry (CEIR) thus addressing the need to identify phone users not only within the switch system but also within the global networking to curtail fraud and improve planning data. NCC in the closing days of the year put commencement date to March 1, 2010.

 

Naturally, operators are bound to cry murder since necessary investment to realise the change may not be necessarily recoverable. It will only just be a normal reaction to expect.

 

Broadband in Nigeria expected

 

Tempo of the clamour for Nigeria to make strategic investment in Broadband infrastructure is approaching fever pitch. Professional associations, NGOs, those in academia and informed industry players are united in their accepting that although there is reason to celebrate the rapid increase in subscriber numbers, it has become obvious the aspect of data penetration through broadband that is supposed to boost Internet penetration is lagging behind owing to the unavailability of full broadband services, coupled with high cost of bandwidth. A government that mouths the ’20-20-20′ slogan  without prioritising broadband stimulation presents as queer at best.

 

Emerging Businesses

 

A new Global Mobile Personal Service by Satellite provider, Globaltouch West Africa rolled out service from its earth station based in Kaduna. 

 

And two Nigerian firms Globacom and Omatek forayed into other markets as they opened shops in Ghana and Benin Republic.

 

Nigeria’s DAAR Communications Plc, operators of DAARSat and AIT Television turned on the switch of access to world class digital broadcasting with a further acquisition of a number of high-resolution based outside broadcast facilities which it received into its stock.

 

Space Research and Development:

Nigeria’s Satellite launch is business, Yes; technological development?, No!

 

NARSDA which celebrated its 10th anniversary during the year started it with a new administration which ended the tenure of the biology Professor who took charge of the agency in its formative years. It took the country the loss of a launched commercial satellite in space to reappraise things. Quite remarkable for an agency which in all ten years of its existence and modus operandi has no basis – no Act of law nor in the appropriation of its finances by the nation’s legislature. Such malady of democracy! The legacy of a somebody.

 

The agency has promised that the lost satellite would be returned to space in 2010. Say ‘amen’, somebody.

 

Content development in Nigeria,

Cyberchuulnews.com takes a lead as it goes commercial.

 

CyberschuulNews.com has set April 21, 2010 as the launch date for commercial services at a public event in Lagos. A recent release by the publishers to its subscribers says a new world of opportunities would emerge from the stable of the e-publications The launch represents an opportunity to marry various independent and impartial aspects of Telecoms and IT company portfolios performance and financial reporting with content to produce an entity which is more vibrant inspirational and an expression of the magic of a creative spirit.