Bruce Ayonote is group chief executive/co- founder, Suburban Telecm, an integrated telecommunications service provider based in Nigeria with operations in Europe and the USA.
His experience spans beyond communications and high technology (C & HT) to corporate finance and business development.
Ayonote has deep expertise and working knowledge with the public sector. He spoke with hilary okeke.
Suburban’s solutions to System Breakdown
Our customers are segmented. If you look at the enterprise segment, you would find that it is a more complex one to deal with. For the telco segment, their requirements are very straightforward – they require basic services which they also understand very well and are regulated by ITU, and have clear standards. But on the enterprise side, we have true ICT – a mix of information technology and communications; and there is a lot of subjectivity because you have to look at the business solution – what the person’s business is, how to help him achieve his business objectives – and a lot of businesses are modeled differently. So, there is a bit of that humanistic side that needs to be appreciated. In terms of solutions to provide to them, the solutions or the concerns we have there would be first, scoping and giving a customer a solution to his unique requirements. So, a business solution – the ability to understand what it means to the business and incorporate and merge them together is a very important value proposition to an enterprise. Secondly, like in the case of financial services, we need a lot of security. Cisco® has some very strong products around anti-virus in partnership with other OEMs and software providers. They have advanced security solutions for enterprises. Basically, providing security solution is either in partnership with some of the software providers and some of the OEMs. Also, providing hardware and middle ware in models that are beneficial to the enterprises. Sometimes you can provide managed services in such a way that a lot of capital expenditure is not burnt by the enterprise on those services; and then also flexibility and robustness of the product – giving them options like in the case of upgrade, data connectivity requirement and in the case of open source, flexible and non-proprietary solutions which would enable interoperatibility with other solutions. Basically, understanding what customers want and trying to give them that, regardless of the challenges has been our standard.
Alternatives to Sat-3
In terms of international fibre connectivity, we have built inland fibre cables across borders into multiple West African countries that have access to international fibre cables. We have been given licence by the NCC to build international infrastructure; we see the need for diversity. Basically what you find around our environment is “a fixed pie mentality” – people still see things from a fixed perspective and are not willing to alter or positively change the scenario. Everyone prefers to leave things as they are. In technology, that is not ideal. Things are continuously changing and are rapidly dynamic; and within the confines of the law, we want to be innovative with our solutions. As a solutions provider, one needs to look at how he can augment the existing status-quo and improve it towards a more quality solution. So for us, we have seen very credible alternatives to supporting the existing burden put on top of the existing infrastructure and creating diversity so that there is more resilience on our networks and services. We have built cables into neighbouring countries; we are building cables from more West African countries connecting additional West African countries. To be specific – cables have been built from Ghana into Lome, Nigeria into Benin and Ghana into Ivory Coast. We believe that we are able to also supply landlocked countries like Mali, Burkinafaso, some parts of Nigeria, Niger; and create multiple exits for even providing redundancy on existing infrastructure like Sat-3 and new infrastructure like Main One or even Glo – cables that would come into the country. For satellite, between 2002 and 2007 we did a lot of satellite transmission but the capacity that the market needs is more sustainable on a fibre infrastructure; the kinds of applications also are more sustainable on a fibre infrastructure. To be honest with you, fibre would be the number one preferred technology and satellite will play a very strategic role. But our focus right now is more on the preferred technology. Like I said, diversity is the key. You know, networks are vulnerable to general activities in the environment and sometimes they suffer intentional and unintentional damage, and the integrity of the network is compromised. So, the solution around that is diversity and not a fixed pie. If you have a fixed pie, when there is a problem, you have no alternative to fall back on. What happened to Sat-3 was quite unfortunate but it happens to networks. On the semantics side, we say it is quite a lot of unexplainable scenarios which have buttressed the need for physical redundancy. The solution now is no more how much you can build on your own. It is no longer about how much money or how much infrastructure you have; it is about how well you have partnered to solve your problems. Collaboration is very important in this aspect.
Sharing Cable Infrastructure and Associated Problems
Yes, there are problems and they are created more by people. At the end of the day, it is people who build and operate networks. So, when someone says he does not want to share infrastructure, there is nothing you can do to make him change his mind. Ultimately, collocation and infrastructure sharing are functions of the desires and intentions of the individuals that run the businesses, and when it is in their strategic interest to share, they tend to share and when it is not, they do not. Everyone has his reasons for doing whatever he does. For collocation to materialize in this environment, there are two ways. One is that it would take a natural course. In a free market economy, they say the functions of demand and supply determine the market. Now, when it becomes more expensive for you to keep on building infrastructure, you would now appreciate the need to share. When it becomes unattractive to keep on building and when people do not see any benefit from it, then they will share. The second way is when government exercises its power to enforce the law. Already, the law says you should share infrastructure wherever there is infrastructure to be shared according to the licences the NCC has given to telecommunication providers in Nigeria. But obviously, the regulator can only act on information or specific reports they get from the operators. I personally have gone to some operators and pitched the idea to share infrastructure in win-win situations, which I thought were very credible but they did not see the light of day. Well, I only hope it appeals to the owners of those infrastructures to share them.
Extent of Internet Penetration and Need for Improvement
The aggregate amount of the Internet in Nigeria today is around 2GB. Within West Africa, we see a total usage of about 600MB, and we still think that the penetration is very low. We think that in the next 2-3 years, we should be looking at 20-25GB of internet connection and penetration. We expect to see a huge growth in Internet penetration by 2009 and 2010. The major factors were availability of international bandwidth over fibre. Obviously, there is a difference when you use the Internet over fibre and when you use it over other technologies because of feed. When you do not get the kind of feed you want, some applications are not that effective and that then makes the users not interested. Cost is another consideration. By providing fibre bandwidth, we have noticed an increase in penetration. Before our intervention into the market, the total bandwidth in the country was below 900MB. Since we came, we have brought about 1.2GB into the market, which has also increased Internet penetration. The more bandwidth becomes available, the more penetration into the society. In terms of cost, we have also done a great job in reducing the cost of the Internet and this in turn, has been beneficial to the end-users – better quality and better cost; and our interest is to increase the capacity and reduce cost over time. So, there is more adoption of the Internet within the country and we believe that when there is more adoption, the business model can change; more value-added services being supplied, and then the basic requirement of having Internet access would be achieved. There is a significant social angle in achieving our objectives.
Challenges of Operating in Nigerian Environment
One of these challenges is high level of corruption in our environment and it manifests in various ways, and that is very contrary to my belief. That is one challenge I face a lot, which that has made me lose a lot of opportunities. Sometimes, I might have to just walk away or lose the interest I have in a prospect. The other one is the capital requirement of running an infrastructure-based business like this. Even though you can get that money from people or from banks – people in terms of high net-worth investors – a lot of people do not have that kind of capacity that we are talking about and the banks also do not understand the business; they are very short term in nature. It might be the nature of their terms with the depositors who bank with them on short term basis and that translates back to their lending style. So, we are not able to get long term financing at reasonable interest rates. The distraction in raising financing is overwhelming, it divorces you from your core responsibility of sales and developing your business and that is a major struggle. Be that as it may, we have been very lucky. Customers are another challenge; sometimes they do not like to pay for services rendered and that is a humbling experience. See, people problem is not a joke.