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Broadband Supply not Well Stimulated Yet– Oladepo

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Kazeem Olawale Oladepo, general counsel, MainOne had prior to joining MainOne was director, Corporate Strategy and Development at Starcomms Plc.
He had also served as the head of Legal/Regulatory Services and the Company Secretary of Starcomms.
Oladepo has core expertise in legal, regulatory, commercial activities and strategic transactions and has extensively been involved in implementing strategic policies within the Nigerian telecommunications industry.
He is a member of the Board of Trustees of the Association of Licensed Telecoms Operators of Nigeria (ALTON), the industry body for all telecommunications operators in Nigeria. He spoke to chike Onwuegbuchi on issues around broadband penetration.

High Volume of Unutilized Broadband Capacity
The best way to appraise this is to take a demand and supply side approach to understanding the constraint with internet penetration and pervasiveness. 
Demand factors are things that drive more uptake or usage. Whilst the operators have a role to play through price reduction to encourage uptake, this side of the push is more reliant on policy and to a large extent positive externalities of what government policies and economic index suggests.
The cost of access devices for instance is one; availability of relevant and attractive content is another, amongst others. If you have to procure your drivers’ license through an online portal for instance, or you can do several of your government or your child’s educational support resources on-line, then more people will use internet services and the operators can see volume.
These demand side factors are not well stimulated yet, although there are efforts at the policy level that are currently being addressed by the federal government through the National Broadband plan.   
On the supply side, we are dealing with the provision of the services to consumers. The submarine infrastructure is a component and we have adequate capacity on that to provide services.
The terrestrial infrastructure continues to be a challenge, as earlier highlighted. There is a policy side to it in terms of cost and more favourable operating environment, with issues of ‘Right of Way’ fees and approval lead time being some of the constraints that are being experienced, albeit now starting to relax with government intervention and support.
But the issues are still there and continue to delay roll-out. The NCC Infraco model is also expected to improve optimization in this area as it should relieve the operators of certain cost of service delivery through subsidies for shared infrastructure and guarantee a degree of orderliness in the deployment of infrastructure.
We are bidding for this project and are quite confident that the process has been transparent so far and will bring significant improvement to the supply side factors.   

Internet Services in Nigeria and Those of Developed Markets
Let us begin with the structure of the market. We are a wholesale operator, not retail or mass market service provider.
The mobile operators and medium size ISPs constitute the retail end of the market. In terms of the structure of the ecosystem, the internet is not necessarily locally domiciled here in Nigeria, it’s an interconnection of networks sitting in several large exchanges where large enough operators are connected to provide access for their customers.
For an operator to get connected at these exchanges it needs to go through a gateway. The submarine cable infrastructure is a gateway, just as the satellite is also a gateway that was pervasively used prior to the advent of the submarine infrastructure, albeit at very expensive prices and less efficient service level.
The submarine cable is an infrastructure that takes you from Lagos to the exchange in London where everybody else is peering internet traffic. 
There is a significantly huge cost to getting that infrastructure set up between Nigeria and London.
The build cost alone for MainOne is $240M of monies raised at very high cost of capital which is peculiar to the Nigerian operating environment.
This does not include the additional cost of building distribution networks terrestrially that were not there in Nigeria due to the absence of common carrier, open access, networks,  available in advanced countries with cheaper internet prices.
These are some of the key considerations, from a cost perspective, that we need to keep in view when we talk about comparative cost of wholesale bandwidth in Nigeria versus the United Kingdom or other developed markets.

Internet Services and Pricing
We need to be mindful of the level of internet usage and attendant volume of bandwidth consumption that the operators in Nigeria are currently seeing on their network.
Without doubt, volumes do drive reduction in prices as we have observed even with the trend in Nigeria, where wholesale prices have fallen from over 1,500USD per Mbps to about 200USD per Mbps. 
Today in Nigeria, we see latent demand rise slowly but steadily. Currently, I doubt if there is any operator in Nigeria  exhausting up to 10% of the capacity they have on their submarine cable, meaning that the investment is at least 90% underutilized, a constraint, of course, on their ability to generate revenue to recover not only its  cost; but also earn margin on the investment.
When compared with developed markets such as the United Kingdom, and operators that are largely Tier I operators (AT&T, TATA, Interoute, PCCW, etc.), their wholesale prices in Europe are far lower as these operators do not have the constraints that are peculiar to our market.
The transmission cost of moving traffic from location to location is almost nothing, since you do not need to move the capacity 7,000 kilometers away from the tele-house. They have huge volume and are largely Tier One operators who do not even have to pay one another to share traffic.
They mainly do peering (exchange) of traffic at no monetary cost.
 If you have huge traffic, you can come to the table and say “I have X volume of traffic”, and you will have other operators available to swap traffic.                                                                                                                                                                                         If we have the volume of internet traffic out of Nigeria that you will see for instance in UK and we can peer, the cost of upstream provisioning that we pay to other operators for Internet Transit in Europe will be eliminated, but this will not remove the cost of transmission between Nigerian and London and the operational cost associated with providing the services. Those costs remain a significant cost differentiator between cost of wholesale Internet Transit services in the United Kingdom and Nigeria.

Achieving Accessibility of Broadband
Sincerely, I have seen this report and I am a bit worried at the source and veracity of the information.  It’s absolutely untrue, since this is margins and when you start to talk about margins you are talking about your revenue versus your cost in reality. I don’t know what the assumptions are really for such so-called margin.
I don’t even know where the cost that is mentioned in the report came from. The information is ambiguous to the extent that it does not say if this is based on a per month, annum or per quarter pricing.
Internet capacity is sold with several variables in perspective, including volume, tenure (whether it is a 1 year, 5 years or 15 years IRU contract) and the location of the customer, particularly since you have to factor the additional cost of last mile delivery into the price.
We have looked at our structure generally and we can’t find anything that seems to correlate with the price point that was put in public domain by the authors’ of the article. Our price model, is similar to those of the other operators, since we all have incurred cost on the submarine cable infrastructure and are also connected to the same global internet exchanges in London through various Tier 1 operators.
We therefore, do not have those exaggerated margins. Undoubtedly, we operate a healthy business that has maintained an excellent operational track-record and a healthy run rate to pay its obligations as at when due as well as expand its operations through additional investments; such as a data center project..
Overall and in terms of objective, the focus has always been beyond high margins. If we had been fixated on exceedingly high margin, we would have done a marginal reduction in price when we came into the market, knowing fully well that we had larger volume of capacity than the incumbent, together with a more efficient network.
But we came in and reduced prices at about 80% to ensure that we can encourage the market to deliver the volume that will boost Internet usage and make the services sustainable and more affordable to the public.
The notion that we make that kind of margin is erroneous and perhaps mischievous, given market realities.

MainOne and Broadband Penetration in Nigeria
I think we have touched on some aspect of it already, such as driving prices down at the point of entry into the market; this is clearly an indication of our commitment to expand the pervasiveness of broadband services in Nigeria. This business started with the key objective of bridging the digital divide between Africa and the rest of the world and that has not changed.
We have been a part of several initiatives, both as champions or supporters of those initiatives that continue to drive broadband penetration in Nigeria. As far as the policy level, we actively supported the National Broadband Plan, driving awareness to the issues that ensure that everybody understands the need to drive the market externalities that affects the growth of broadband penetration in Nigeria.
We will continue to do more to support current growth and are also supporting small companies, giving E-commerce entrepreneurs capacity at subsidized rates to foster growth of their businesses. We are doing the e-initiative with Lagos State Government, where we built into Yaba for the i-HQ project to drive innovation etc. and are supporting a lot of educational institutions through our Research and Education Network projects.
In terms of prices ever going down? Yes, they are and certainly they will continue, but a lot of things need to add up, some of which are already beginning to happen, thanks to the regulatory imperative and government shifting attention more to providing an enabling environment.
The biggest issue is still infrastructure to support the delivery of the services in reality, availability of this infrastructure and the price of access to it, are still not competitive. Connecting a customer in Abuja remains far more expensive than the cost of connecting Lagos to London as we have maintained and this will remain so until we have the appropriate regime to force anti-competitive pricing of terrestrial infrastructure down and compel open access to the infrastructure.
Driving the market externalities from a demand and supply perspective would also help. If we see more government services going on-line and educational institutions ramping up more capacity, we will see incremental volume that allows the operators to keep revenue steady for continuing operations and sustainability of the networks, so that we can continue to provide the services at current efficiencies.  


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EAIF Commits Additional US$30M to Support Indorama’s Expansion with Third Urea Plant in Nigeria

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The Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company, has committed a US$30 million senior debt facility to Indorama, a leading producer and exporter of fertiliser.

The investment enables the construction of a new plant, port terminal, handling stations, and storage facilities in Nigeria, providing a major boost for the country’s agricultural sector, which is a crucial driver of the country and region’s economic growth.

EAIF acted as a co-lender within a broader debt financing package arranged by the International Finance Corporation (IFC), mobilising US$1.25 billion from a syndicate of impact investors, development finance solutions, and commercial banks.

EAIF’s investment increases the Fund’s lending to the company to $111 million, reflecting a joint-ambition to accelerate Indorama’s growth strategy and Nigeria’s aspirations for diversification and industrialisation.

The new funding unlocks fresh capital to enable the construction of a dedicated port terminal and state-of-the-art urea fertiliser plant, anticipating an increase in its current capacity from 2.8 million metric tons to 4.2 million metric tons per annum.

The expansion leverages the company’s strategic location as a freight-competitive supplier serving the needs of significant urea markets in the southern Atlantic, including Brazil, Argentina and Uruguay, as well as West Africa, South Africa and the USA.

The facility bolsters Indorama’s capacity, extending its complex beyond the current two urea fertiliser plants, which is well poised to meet the entire demand of the Nigerian market.

The third urea plant aims to maximise output to meet the food demands of growing populations as disruptions precipitated by the COVID-19 pandemic and the Russia-Ukraine crisis affect food security around the globe.

Global crop production is reliant on the international supply of fertiliser. The landmark project is expected to position Nigeria, Africa’s largest economy, as a leading producer of urea among the top 10 producers worldwide.

Contributing to the UN Sustainable Development Goals 8 and 9 on Decent Work and Economic Growth, and Industry, Innovation, and Infrastructure, EAIF’s loan forms part of the Private Infrastructure Development Group (PIDG) objective for new infrastructure to drive action on climate and nature.

The construction of the port terminal and third plant is set to begin in 2024, with commercial operations expected to commence in 2026. During the construction phase, it is estimated that over 500 jobs will be generated, further contributing to economic development in Nigeria and beyond.

Commenting on the transaction, Olivia Carballo, Managing Director, Emerging Market, Fixed Income at Ninety One, the fund manager of the EAIF, said: “Our continued support for Indorama demonstrates EAIF’s commitment to harnessing the region’s significant economic prospects.

Africa’s potential for industrialisation is tremendous, and this landmark project is a testament to Nigeria’s enhanced ability to produce and export competitively priced, high-quality fertiliser to farmers in regional and international markets, which will remain a priority for years to come.”

Munish Jindal, CEO, Indorama, said: “Indorama will utilise state-of-the-art technology and adhere to stringent environmental standards to ensure optimal efficiency, product quality and sustainability.

We believe that the establishment of this fertiliser will position Nigeria as a key player in the global agricultural market. We are committed to maximising the potential of this project to benefit farmers, communities, and stakeholders across the value chain.

The involvement of esteemed lenders like the Emerging Africa Infrastructure Fund will not only help Nigeria’s in becoming one of the largest exporter of the fertilisers in the region but will also address the issues of global food security. We extend our sincere appreciation to all our partners, lenders, and stakeholders for their unwavering support and dedication to our shared vision.”

Sérgio Pimenta, IFC Vice President for Africa, said: “Reliable access to high quality fertiliser is essential for food production and food security around the world. IFC’s investment in Indorama, along with African, Asian, European, and American partners, signals our joint commitment to support the agriculture sector, Nigeria’s economy, and the expansion of Indorama, an important supplier in the global food chain.”


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Lifi.net Achieves 500mbps Speed to Rank among Fastest Internet Providers in Nigeria

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Lifi.net, a fast-growing internet service provider, has attained internet speed that is many times faster than the documented average internet speed in Nigeria as at January 2024.

Lifi.net Image

Latest disclosure by LIfi.net shows that the company now delivers up to 500 megabits per seconds (mbps) internet speed in unlimited services provided to homes and offices. This is higher than the country’s average internet speed of 26.74mbps.

As internet subscriber base increases in Nigeria and hit 161.68 million in January, the quality of internet service provided by operators to their users still constitutes concerns as 2G network which has limited speed dominates the space by covering 57.78%.

The Nigerian Communications Commission (NCC) revealed through its latest data that while 3G is responsible for 9.36% of internet users in the country, 4G covers 31.75% of internet access and 5G internet only serves 1.11% of internet users in the country.

This combination explains why Nigeria ranked 93rd on the global mobile internet speed test out of 144 countries tested by Ookla, a U.S-based internet speed analysis firm, in January, putting the country’s median internet speed at 26.74 megabits per second (mbps).

However, Lifi.net (NT/007/22), a licensee of NCC, is among few Internet service providers (ISPs) that deliver fastest internet speed in Nigeria with up 350mbps for homes and 2500mbps for offices while assisting new ISPs with speeds over 5000mbps at the data centre and delivering the capacity to their various hubs at no extra cost.

“For over five years Lifi.net has been a leading network company, providing quality internet solutions at the speed of light and at affordable rates. We have highly technical and hard-working personnel and partners. We are very skilled at managing Cisco and Mikrotik Routers’ deployment, configurations, and integrations, fibre laying, and splicing,” says Abraham Oluwambe, Chief Operating Officer of Lifi.net.

He added that as operators attract more subscribers to their respective networks, they should equally place a premium on upgrading the quality of services to deliver broadband at the fastest internet speed possible.

“Our services are not only widespread but also affordable. We believe in making quality connectivity accessible to all. We understand the importance of budget-friendly solutions. Our cost-effective broadband plans ensure you get the best value for your investment without compromising on quality.

“While providing high-speed and reliable broadband connectivity, operators may choose the floor or the peak performance of its service. At Lifi.net, we always go for the latter,” he said.


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Our 2023 Ads Safety Report

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By Duncan Lennox, VP & GM of Ads Privacy and Safety

Billions of people around the world rely on Google products to provide relevant and trustworthy information, including ads. That’s why we have thousands of people working around the clock to safeguard the digital advertising ecosystem. Today, we are releasing our annual Ads Safety Report to share the progress we’ve made in enforcing our advertiser and publisher policies and to hold ourselves accountable in our work of maintaining a healthy ad-supported internet.

The key trend in 2023 was the impact of generative AI. This new technology introduced significant and exciting changes to the digital advertising industry, from performance optimization to image editing. Of course, generative AI also presents new challenges. We take these challenges seriously and will outline the work we are doing to address them head-on.

Just as importantly, generative AI presents a unique opportunity to improve our enforcement efforts significantly. Our teams are embracing this transformative technology, specifically Large Language Models (LLMs), so that we can better keep people safe online.

Gen AI Bolsters Enforcement 

Our safety teams have long used AI-driven machine learning systems to enforce our policies at scale. It’s how, for years, we’ve been able to detect and block billions of bad ads before a person ever sees them. But, while still highly sophisticated, these machine learning models have historically needed to be trained extensively – they often rely on hundreds of thousands, if not millions of examples of violative content.

LLMs, on the other hand, are able to rapidly review and interpret content at a high volume, while also capturing important nuances within that content. These advanced reasoning capabilities have already resulted in larger-scale and more precise enforcement decisions on some of our more complex policies. Take, for example, our policy against Unreliable Financial Claims which includes ads promoting get-rich-quick schemes. The bad actors behind these types of ads have grown more sophisticated. They  adjust their tactics and tailor ads around new financial services or products, such as investment advice or digital currencies, to scam users.

To be sure, traditional machine learning models are trained to detect these policy violations. Yet, the fast-paced and ever-changing nature of financial trends make it, at times, harder to differentiate between legitimate and fake services and quickly scale our automated enforcement systems to combat scams. LLMs are more capable of quickly recognizing new trends in financial services, identifying the patterns of bad actors who are abusing those trends and distinguishing a legitimate business from a get-rich-quick scam. This has helped our teams become even more nimble in confronting emerging threats of all kinds.

We’ve only just begun to leverage the power of LLMs for ads safety. Gemini, launched publicly last year, is Google’s most capable AI modeI. We’re excited to have started bringing its sophisticated reasoning capabilities into our ads safety and enforcement efforts.

Our Work to Prevent Fraud and Scams

In 2023, scams and fraud across all online platforms were on the rise. Bad actors are constantly evolving their tactics to manipulate digital advertising in order to scam people and legitimate businesses alike. To counter these ever-shifting threats, we quickly updated policies, deployed rapid-response enforcement teams and sharpened our detection techniques.

  • In November, we launched our Limited Ads Serving policy, which is designed to protect users by limiting the reach of advertisers with whom we are less familiar. Under this policy, we’ve implemented a “get-to-know-you” period for advertisers who don’t yet have an established track record of good behavior, during which impressions for their ads might be limited in certain circumstances–for example, when there is an unclear relationship between the advertiser and a brand they are referencing. Ultimately, Limited Ads Serving, which is still in its early stages, will help ensure well-intentioned advertisers are able to build up trust with users, while limiting the reach of bad actors and reducing the risk of scams and misleading ads.

  • A critical part of protecting people from online harm hinges on our ability to respond to new abuse trends quickly. Toward the end of 2023 and into 2024, we faced a targeted campaign of ads featuring the likeness of public figures to scam users, often through the use of deepfakes. When we detected this threat, we created a dedicated team to respond immediately. We pinpointed patterns in the bad actors’ behavior, trained our automated enforcement models to detect similar ads and began removing them at scale. We also updated our misrepresentation policy to better enable us to rapidly suspend the accounts of bad actors.

Overall, we blocked or removed 206.5 million advertisements for violating our misrepresentation policy, which includes many scam tactics and 273.4 million advertisements for violating our financial services policy. We also blocked or removed over 1 billion advertisements for violating our policy against abusing the ad network, which includes promoting malware.

The fight against scam ads is an ongoing effort, as we see bad actors operating with more sophistication, at a greater scale, using new tactics such as deepfakes to deceive people. We’ll continue to dedicate extensive resources, making significant investments in detection technology and partnering with organizations like the Global Anti-Scam Alliance and Stop Scams UK to facilitate information sharing and protect consumers worldwide.

Investing in Election Integrity

Political ads are an important part of democratic elections. Candidates and parties use ads to raise awareness, share information and engage potential voters. In a year with several major elections around the world, we want to make sure voters continue to trust the election ads they may see on our platforms. That’s why we have long-standing identity verification and transparency requirements for election advertisers, as well as restrictions on how these advertisers can target their election ads. All election ads must also include a “paid for by” disclosure and are compiled in our publicly available transparency report. In 2023, we verified more than 5,000 new election advertisers and removed more than 7.3M election ads that came from advertisers who did not complete verification.

Last year, we were the first tech company to launch a new disclosure requirement for election ads containing synthetic content. As more advertisers leverage the power and opportunity of AI, we want to make sure we continue to provide people with the greater transparency and the information they need to make informed decisions.

Additionally, we’ve continued to enforce our policies against ads that promote demonstrably false election claims that could undermine trust or participation in democratic processes.

Overall 2023 Numbers

Our goal is to catch bad ads and suspend fraudulent accounts before they make it onto our platforms or remove them immediately once detected. AI is improving our enforcement on all these fronts. In 2023, we blocked or removed over 5.5 billion ads, slightly up from the prior year, and 12.7 million advertiser accounts, nearly double from the previous year. Similarly, we work to protect advertisers and people by removing our ads from publisher pages and sites that violate our policies, such as sexually explicit content or dangerous products. In 2023, we blocked or restricted ads from serving on more than 2.1 billion publisher pages, up slightly from 2022. We are also getting better at tackling pervasive or egregious violations. We took broader site-level enforcement action on more than 395,000 publisher sites, up markedly from 2022.

To put the impact of AI on this work into perspective: last year more than 90% of our publisher page level enforcement started with the use of machine learning models, including our latest LLMs. Of course, any advertiser or publisher can still appeal an enforcement action if they think we got it wrong. Our teams will review it and, in the cases where we find errors, use it to improve our systems.

Staying Nimble and Looking Ahead

When it comes to ads safety, a lot can change over the course of a year: the introduction of new technology such as generative AI to novel abuse trends and global conflicts. And the digital advertising space has to be nimble and ready to react. That’s why we are continuously developing new policies, strengthening our enforcement systems, deepening cross-industry collaboration and offering more control to people, publishers and advertisers.

In 2023, for example, we launched the Ads Transparency Center, a searchable hub of all ads from verified advertisers, which helps people quickly and easily learn more about the ads they see on Search, YouTube and Display. We also updated our suitability controls to make it simpler and quicker for advertisers to exclude topics that they wish to avoid across YouTube and Display inventory. Overall, we made 31 updates to our Ads and Publisher policies.

Though we don’t yet know what the rest of 2024 has in store for us, we are confident that our investments in policy, detection and enforcement will prepare us for any challenges ahead.


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