Olusola Teniola is the president, Association of Telecommunication Companies of Nigeria (ATCON); providing industrial leadership in steering the association’ collaborations with government, civic society, academia, and international organizations seeking to invest in Nigeria’s telecommunication space. He also doubles as the Client Partner at Detecon International, a leading edge Telecom consultancy for important Government, MNO(s) and 4G-5G projects across Nigeria and West Africa. Prior to that, Teniola was the CEO & Managing Director Company of Internet Solutions (IS) with critical focus on growing Internet Solutions (Part of Dimension Data & NTT Group) into a fully-fledged provider of converged communication solutions in Nigeria’s growing data broadband space. Teniola, a MBA in Management holder from the University of Bath; BEng (Hons) Computer & Information Engineering, London South Bank University, had worked as a director at Kinten Telecom Ltd and COO, Phase3 Telecoms. In this interview with peter oluka, Teniola urges the government to address the ICT industry pain-points, as a means to encourage more investments.

ATCON Presidency: The Journey So Far

The journey has been insightful and rewarding in many ways. Firstly, it has provided me with a perspective of the multi-faceted challenges facing our members, this insight has been gained from the numerous courtesy visits I and members of the ATCON National Executive Council (NEC) have made to a cross-section of our members, it is through this channel and exposure to the day-to-day issues in front of the management of these companies that has cemented and focused the advocacy that I have led to date. Secondly, it has been rewarding in the manner that as President I’ve been able to forge further partnerships and collaborations with other associations across ECOWAS and Morocco. In particular emphasis has been made to our recent ATCON MoU signed with a prominent association in Casablanca in September 2017 to strengthen the Morocco-Nigeria ties in ICT outsourcing opportunities and investments. This is a typical theme that speaks to one of my 6 point agenda that I shared with the press when I took over the leadership of this great association.

Telecoms’ Industry and Economic Disequilibrium

Advertisement

The changing dynamics in the industry are no different from other sectors, so I’ve tried not to treat our industry as a special case, however, when we note that inflation is in mid-double digits and FOREX/currency risks were critical and still are pressure points in the way and manner that our members’ business models have been impacted, it is encouraging to have observed that our members have adapted to the challenges and still put in a stellar quarter-on-quarter trillion naira revenue contribution to the Nigerian GDP.

The country risks have not helped in attracting further increases in FDI, however, a stable customer base across the industry albeit at lower ARPU rates in both the consumer and Enterprise segments has meant that the key to survival has been a focus on operational efficiencies and a drastic reduction on CAPEX spend – so in the short term we are weathering the storm but in the long term there appears to be a great deal of uncertainty in the forecasts. Our members are now seeking a more robust form of capital structure for their business models to ensure continued sustainability.

Vanguard For A System, Backed by Policies, That Will Guarantee Investors’ Confidence In The Telecoms’ Sector.

When I look at how other climes in Africa have performed in terms of policies in the telco space, it appears that Nigeria is ahead in policy formulation, however, we are predominantly viewed by investors as an Oil & Gas producer and with the cyclical nature of commodity prices, it has meant that policies to diversify the economy including our ICT policies have been met with healthy skepticism from a view point that suggests that Nigeria is treated as a consumer led ICT market and not one that has sufficient local capacity to develop into a knowledge based society. So the policies that are in place in our industry are predominantly infrastructure focused requiring a high degree of debt leveraging to undertake the execution of these projects and as money (both local and foreign) is no longer inexpensive, then the only guarantee left for our industry is for government backed incentives and an enabling environment to exist to allow and encourage the inflow of non-portfolio investments to accommodate the risks that are evident in our business environment.

Critical Areas Requiring Immediate Policy Interventions

Advertisement

(1) Immediate removal of ICT equipment from the 41 restricted items on the CBN list that are banned from accessing the official FOREX market; (2) Recognition that Telecoms equipment is a critical national infrastructure and therefore needs the same protection given to the electricity infrastructure to avoid the continuous destruction of optic fiber cables, the prevention of closure of base stations, the removal of multiple taxes and regulations at both state and local government levels; (3) The immediate implementation in full of the National Broadband Plan 2013 and the continuation of the update and/or review of the ICT 2012 policy document approved in principle. Finally (4), we need government to further encourage opening up and sharing of backbone infrastructure already present in the market to all our members at a price that ensures fair competition for all our members and the wider industry players – this will create a sustainable and healthy industry. We need NCC’s wise leadership and mature intervention in achieving (4).

Why Operators Are Unable To Expand Networks

The current economic environment does not lend itself to further investments in the short to medium term and requires a level of appropriate concessions being provided by government to retrigger the potential investors’ appetite to take on risks that are no longer immaterial. The current roll-out of 4G LTE and LTE-A networks is broadband in terms of speed of access with minimum configurations typically in the region of 2 to 10Mbps and in some cases even more. Technically this is achievable under ideal conditions and not a guarantee all the time, so ‘upto’ a certain specified speed is more appropriate for best-effort internet access speeds over broadband cellular mobile networks, so it is not necessarily true that 4G LTE services are offering narrowband speeds as a default. An enabling environment that supports a certain return on investment over a period of time is a key requirement to attracting further investments in this sector. Any possibility that the eco-system is vulnerable to adverse risks in current investments of capital will send the wrong signals to new investors, so it is very important that our members are showing a healthy growth and more importantly enthusiasm for further investments, as this is then read by others that there are still genuine opportunities that exists in Nigeria that exceeds the risks that are now constants in doing business in Africa.

At The Recent Nigeria- India Ict Summit, In Your Presentation, You Mentioned The Need For Nigeria To Come Up With Viable Policies To Ensure These International Pacts, Partnerships And Agreement Favour The Local Investors. NOTAP is there to do this or are there specific areas you were referring to? 

There are indeed areas we can now begin to adopt that creates a buoyant local content driven eco-system that goes above just being a conduit for the distribution of foreign based technology. The need to adopt the Oil and Gas local content policies in place in Nigeria is a start and needs to be seriously taken on board by the Ministry of Communications to ensure that NOTAP and ONC within NITDA are able to be more impactful in its quest to ensure that capital flight is considerably reduced. The execution of NOTAP’s mandate should be non-negotiable and in line with SON, reduce the prevalence of substandard ICT products imported into the country and also to enforce Nigerian standards in the way ICT infrastructure is deployed, both hardware and software.

Advertisement

The National Broadband Policy

It appears that the execution of the NBP 2013 is falling behind and we may more than likely miss the set targets that were set to gauge our progress on an ongoing basis. However, without the experts or industry players being involved in the Nigeria National Broadband Council it will create a situation where the wider stakeholders will not want to ‘own’ whatever the council seeks to achieve. This divide will create a gap that will create more problems going forward and may lead to a ‘white elephant’ syndrome to take shape. The issues that the NBP 2013 raised were by experts and players in the industry and with this knowledge, it is only possible to find solutions from the players who are fully aware of the issues raised and not a set of people who do not come with the domain knowledge or expertise to over-come the challenges or even understand the complex issues that exist. The implications of continuing within this construct is that we shall have missed opportunities to resolve some very critical issues raised by the NBP 2013 and the reinvention of the wheel is more than likely to happen with little or no tangible progress. My best advice is to have all stakeholders involved in the execution, especially those critical to the council’s success and this can only be achieved through proper stakeholder ownership.

Do You See Nigeria Meeting Up With The 2018 Target Of 30% Broadband Penetration

I believe that the minimum target should be 30% and not that we meet 30% and that is the end. This is a journey and right now we have 21% broadband penetration as suggested by NCC, quoting ITU statistics. Really, when we look at the situation we found ourselves in in terms of broadband in 2012 when the National Broadband Plan (NBP) was written, it was evident that a combination of 3G and 4G networks at a level of 80% network coverage for 3G and 50% for 4G will suffice to achieve the minimum 30% at speeds of 1.5Mbps download for the right consumer experience that will create an increase in productivity and this may positively impact our GDP by another 1.x %. If we want to attain the benchmark set we need to accelerate the removal of barriers that exists in Rights of Way (RoW) permits, reduce the costs associated with fiber deployment across the country and create a compelling reason that brings much needed funds from the private sector to Nigeria to build the infrastructure that will enable this to happen. These were some of the underlying assumptions that were prerequisite during the drawing up of the NBP in 2012 and supported holistically by the industry at that time as the only way forward to realistically achieve and surpass the 30% target.

Both NCC And The Industry, Seemingly, Are Quite About The Proposed InfraCos. Why?

Advertisement

NCC will soon announce the outcome of the five outstanding INFRACO licenses. However, our concern in ATCON is that our members have yet to reap any benefit from the earlier two licences awarded back in 2014 and as of yet there appears to be no end in sight as to when they will roll-out infrastructure that was expected to have been deployed by now. This is something that requires the immediate attention of the recently inaugurated Nigeria National Broadband Council.

What’s You View About ‘Digitizing Nigeria’?

There are two parts to ‘Digitizing Nigeria’: One, is people and the mindset required to be creators of value and innovative solutions in agriculture, power management, health, water, transportation and logistics. Second, are the processes that will make for transparent working environments utilizing systems across our day-to-day lives. The critical steps are the evolving requirements to update our many technology deficient citizens so that they become comfortable with the new digital paradigm – this needs to be imbibed from an early age and especially an infusion into the youth population through massive training in ICT and adoption of science based application relevant curriculum that solves basic society’s needs. Another step is for Government to move all the 3 tiers of governance onto a digital platform and examples exist in other climes where this is the norm, so that the Nigerian Citizen is able to interact with government without having to march to Abuja for basic administrative tasks or their Local/State headquarter/secretariat on a daily basis for menial tasks that can be carried out by automated processes instead. Then once we have some of these in place then we can envision the deployment of Smart Cities and Internet of Things (IoT) that fully enmeshes our homes with utility companies, service providers, and other critical institutions that exist to improve our quality and standard of life.

Need For Reforms

We need a reform of the telecom sector in a way that it identifies the opportunities that exists in truly exploring the emerging digital realm. The funding of all this is a steeple chase hurdle to the realization of this new future and it requires continuous change in the way regulation and policies are formulated. Right now, we are undergoing consolidation in the market what we seek are for the Government to react quickly to these changes and adapt as the technology adapts to the new Industry 4.0. paradigm.

Advertisement