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Telecom Colonization Imminent – Daranijo

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Sinari Daranijo, Chief Executive Officer, Elcomserve Nigeria Limited – a conglomerate of Security, Telecom and IT professionals.
He is a highly successful unique individual with immeasurable business acumen and has accumulated diverse business portfolios ranging from International Business, Oil & Gas, Business Development, Commerce & Industry, Training & Development, Information Technology, Strategic Management and Safety with over 18 years of relevant experience.
He spoke to Peter Ugwu on the company’s newly invented Nigeria’s first instant messaging/chat platform – Simply Beep and the state of the nation’s telecom industry. 

Elcomserve in Nigeria’s Telecom Business
We have a mix of professionals to provide great solutions for the development of the country and the people.
And one of our major target areas is to make things easier for people on the global scale by using the telecommunication platform.
When telecom was liberalised in Nigeria we actually started by providing infrastructure, equipment like radios, antenna, masts etcetera.
Everything is in stages. After they achieved that feat, the next step was to maintain the existing infrastructure, so that clients and customers can have value for their money and speak to themselves.
So that after acquiring huge voice subscriptions, the SMS promos, text-to-win were inspired, and now the next level is providing service for value added creation which has given rise to increase in the use of data.
For us at Elcomserve, we thought that now that the world is going digital everyone will end up in the internet, whether we like it or not.
So, we considered having a data plan that will be all encompassing, a gate into the world. We discovered that these days the spirit of chatting is beginning to encompass and engulf the entire world – it is easier to be on an IM platform than being on an SMS one.
We also discovered that while the whole world is going ahead, talk about android, iPod, Africa is lagging behind a bit because of high poverty level.
However, the chat experience is presently only available on that higher level, so we thought, ‘what can we do to bring it lower?’, hence we have created a product called Simply Beep.
It is supposed to help people who are using ordinary phones to tap into the experience of the upper-class users of smartphones.
It will open up a huge avenue into the entire system. But of course we have our challenges, even the people who work with the network operators do not completely understand because they are all following the world trend.
We have statistics: out of about 100 million subscribers on all the GSM networks in Nigeria, only about 3 million have BlackBerry and other smart phones.
We have about 97 million others who do not possess a BlackBerry or Smartphone.
For the most part, we have concentrated on those at the top.
 We need to connect with those on the other end of the divide. So, we decided to do something that will allow more people to have access to chat platform, people like students, artisans, house wives, etc, they are willing and ready to chat.
Beep is already available for download with the MTN network and we are concluding talks with all other mobile network providers in the country.
 
Beep and Local Lingua
The product has local lingual significance.
The reason why it is deployed in local lingua is to separate us from the crowd. And it will actually make the product proudly Nigerian.
Our local Pidgin-English is also something now respected and subscribed to in some parts of the world, owing to our music and movie industry.
Therefore, our move is to capture that segment of the society and endear them to the product. The emoticons such as “Laugh wan kill me die”, “I beg wait” and “I dey vex,” are some of the unique features of Simply Beep.

Challenges
Although there are other competing brands in the market – they have higher-end products – not necessarily mass friendly and not directly pushed to the people.
The reason why it’s taking some time for us to leverage on our own product is because we are stepping into a market with a new experience, and by pulling these people into a new experience it now means that we need to throw the product directly to their phones, unlike those other competitors that subscribers have to download from the internet.
That is our strategy, but it was tough pushing the networks to understand what we are talking about, because all they can see is the upper class people.
We had to make them see that Nigerians are highly motivated people.

Economic Values
Now, when you look at it from the point of economic value, the social media is a very big platform.
Increasing the dissemination of information, helps two or more people engage in interaction, increases communal feelings, etc.
So, all the advantages of social media are what we are bringing to the fore, especially for those who won’t otherwise use data services.
Our underlying philosophy however, is: own something. We don’t create, own or produce anything as Africans.
Over 50 per cent of what we wear on our bodies is foreign made. And that is why we shall continue to have local content problems.
Shoprite is here and you are all excited, it is not your money! If you go there to shop, they take the money and develop their own countries.
Why can’t we build our own platforms? This is the age of social platform. And I am building this platform in pain, because banks don’t support me. Even the networks, it was a battle to make them buy into this.
And that is the story of Nigeria, even the government does not understand.
But we need to build platforms that are ours. It will checkmate capital flight, because presently, when N10 is plugged into Nigeria’s economy, N5 out of it leaves the country.

Nigeria in Telecom Market
The world telecommunication market is expanding.
The data accompanying all products pushed to Africa are being kept by foreign companies. The problem with Nigerians is that we are not creators; we would want to leverage on what everybody brings to us.
We can do something even better; something we can call our own.
If Nigeria can boast of a chat platform we hold as ours, rather than depend on outsiders, then it is the beginning of great things to come in the Nigerian telecommunications market.

Infrastructure
That is where the global village phenomenon comes in, because we are still battling with electricity and all that, what we have done is to partner RackSpace that hosts servers for many other companies in the world.
RackSpace keeps all our chats and everything.
There is a room in the cloud that is dedicated to us. Reason why we have gone to that level is to ensure we do not tell our subscribers stories.
The problem we are having with the network operators is their inability to see that this project is important for the nation, because local content is not always the best for the expatriate companies.
It’s just the way the oil companies operate; we need a lion-hearted Minister who will put it on the expatriate companies to align themselves with the domestic inventors.
Do we have government functionaries who understand what mobile application developers go through?

Human Resources
We need to have telecom people in government; those who understand the nitty-gritty of the business so as to harness the potentials.
Your software is nothing until it goes out to the public. Nigeria must do everything within our powers to run away from impending telecom colonization.
It is a serious issue; there is no sector that the foreigners are not dominating.
We need to have Nigerians hold some gates in the sector. They know it, but there is not enough passion to drive it.
We have the best of policies in place, but the implementation is the problem. You remember when the telecom market was initially liberalised, NITEL had 400,000 lines and owned all infrastructure associated with the industry.
The new private operators were begging NITEL (for infrastructure sharing), but now they have all built their own infrastructures and its NITEL through the government begging them (for accommodation).
So, the bigger you are, the less stress, because you don’t have to talk to anybody.    
  
Government’s Involvement  
The connection between government and the realities ends in speeches. We need to have people who feel the pain to make things happen.
We need the government and the industry to understand each other by communicating on a regular basis, so we can deliver a resultant technological effect to the people at the grassroots.     


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Arik Air Resumes Domestic Flights July 8

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Arik Air has announced the resumption of its domestic flights from July 8, following the federal government’s decision to re-open Lagos and Abuja airports for flight operations.

Roy Ilegbodu, Arik Air Chief Executive Officer, disclosed this in a statement in Lagos.

Mr Ilegbodu said that the airline would be operating three daily flights from Lagos to Abuja in the first phase of the restart.

He said further that Port Harcourt would be added to the schedule from July 11, when the Port Harcourt International Airport would be reopened for operations.

“Passengers have been assured of their safety and wellbeing at every stage of their flight.

“The airline has put various measures in place, in line with COVID-19 health protocols, as recommended by the World Health Organisation (WHO), International Civil Aviation Organisation (ICAO) and the Federal Government of Nigeria.

“Passengers are advised to arrive at the airport three hours before scheduled departure time so as to have ample time to undergo all security and health protocols before flight.

“Furthermore, all passengers are required to come properly kitted with their face masks.

“We are ready to fly our esteemed customers again. All preparations have been made to make flying in this extraordinary period in the world safe and pleasurable.

“Arik has worked actively with aviation agencies for an effective re-start of the industry and also ensure that agreed health measures are effectively implemented,” Mr Ilegbodu said.


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Some of the Tools for the Job in Hand

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BY Gregory Kronsten

The principal losers from COVID-19, as with other global viruses and all national disasters, are the poorest members of society. They have fewer, if any savings. They generally live on top of one another. Their income is received in cash because their jobs, if any, are not secure.

 

They depend upon the state for education and health so when the government seizes up for whatever reason, they are left without. We could go on. The lucky ones are the “professionals” who can work from home and adapt to the restrictions imposed by their government.

The authorities in Nigeria have sought to respond with monetary and fiscal stimuli. The headline measure on the monetary side was the rate cut of 100 basis points (bps) announced by the monetary policy committee (MPC) last month.

The impact of rate changes is limited for well-documented reasons, which explains the consensus view (including our own) ahead of the meeting on 28 May that there would be no change. The cut was the signal/message, whatever its effect, that central banks and MPCs across the world have sent in the face of COVID-19 and the ensuing lockdowns.

On 16 April, the CBN governor outlined a package of regulatory and credit measures that was costed at N3.5trn in aggregate. The largest intervention was a N1trn facility for agriculture and manufacturing, of which N93bn had been disbursed for 44 projects one month later. Similarly, for the N100bn healthcare intervention, a total of N10bn had been released.

This is not particularly fast or slow. The CBN has tested procedures to follow. There are not the resources available for the quick fix. In the US the government sent a cheque to each household. In several European countries such as Germany, Switzerland and the UK, banks released government-guaranteed loans for small business after credit checks that could charitably be termed light.

There is little doubt that some of these loans were fraudulent and that many will turn sour. However, governments in advanced economies can take the hit.

The Federal Government of Nigeria’s (FGN) contribution to the fight against COVID-19 is the inclusion of a N500bn COVID-19 crisis intervention fund within the latest version of the 2020 budget, approved by the National Assembly on 11 June.

This fund is to be targeted on improvements to healthcare facilities and a special scheme of public works to employ 770,000 Nigerians. Additionally, the FGN will request funding from the World Bank Group for its Nigeria Centre for Disease Control (NCDC), the country’s leading public health institute, and from a West African disease surveillance vehicle to provide US$100m for the state governments to tackle the impact of COVID-19.

These initiatives will complement programmes financed by the US$5.5bn multilateral borrowing in the budget, of which the IMF has already disbursed US$3.4bn. A further US$290bn has been approved for release by the African Development Bank.

It is far too early to say how much COVID -19 will hit the health of Nigerians, let alone the broader economy. An analysis of the victims elsewhere tells us that the young average age of the population stands in Nigeria’s favour.

We should also cite the possibility that the average temperature counts as another positive. All advantages, and we will add the sizeable domestic investment institutions that will fund most of the FGN’s borrowings, are to be valued since Nigeria has limited resources to fight off COVID-19.

Gregory Kronsten is Head Macroeconomic and Fixed Income Research, FBNQuest


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Subdued Hit from COVID-19, Subdued Rebound Too

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By Gregory Kronsten

The impact of COVID-19 on output in Nigeria is likely to be less severe than on many comparable economies. The IMF’s World Economic Outlook in April saw GDP contraction of -3.4 per cent this year and a rebound of just 2.4 per cent in 2021.

We might think that in the early days of COVID-19 (outside China) the Fund then lacked the materials to make credible projections. Yet earlier this month the World Bank’s Global Economic Prospects came up with a similar narrative (-3.2 per cent in 2020 and 1.7 per cent next year). For the record, FBNQuest Research’s projections are -3.1 per cent and 2.2 per cent respectively.

Official sources in Nigeria have a melancholier take. Earlier this week Sarah Alade, Economic Advisor to the President and Former Central Bank of Nigeria (CBN) Deputy Governor, was quoted as sharing a best-case scenario of -4.4 per cent this year and a worst of more than -8.0 per cent contraction.

The governor has suggested, in contrast, that the damage could be less than indicated by the Fund. The point of interest is less the precise number than the underlying story.

We see several domestic and external reasons for Nigeria’s hit to be less strong than that of other emerging markets (EMs). The World Bank projects contraction of -7.1 per cent in South Africa this year, for example, while its central bank (SARB) forecasts -7.0 per cent.

Agriculture is the largest sector of the Nigerian economy and has a large subsistence component that is insulated from COVID-19. The Nigerian economy as a whole enjoys some protection from global headwinds with the obvious exception of the crude oil price.

Manufacturing produces consumer goods for the domestic market, and the reach of global supply chains into Nigeria is limited. Unlike large EMs such as Brazil and Argentina, it is not an important trading nation. Nor is Nigeria a regional hub for air transport. Unlike South Africa and Kenya, it is not a tourist destination other than for its large diaspora in the holiday season.

These factors should limit the contraction of the economy. That said, all the forecasts mentioned for the year would still result in one of the worst GDP outturns ever for Nigeria. We should remember that the per head figure would be far worse, given the annual growth in the population of 2.8 per cent.

A Lagos-based survey by REACH Technologies has indicated an average decline in incomes of about 30 per cent between March and end of May. Carried out on behalf of FBNQuest, the survey also found that respondents cut their spending on high-value items by about 22 per cent over the same period.

As the hit this year will be weaker than that on its peers, so will the rebound in 2021 be for the same reasons. Ideally Nigeria’s growth trajectory would be closer to its peers because it would then be more incorporated within the global village. The federal government does have the opportunity to make changes to increase that degree of incorporation. We note that the federal finance ministry has been quoted as saying that it has permanently exited gasoline subsidies.

We saw an earlier statement to the same effect from the top brass in the Nigerian National Petroleum Corporation, which has been absorbing the cost below the operational in its accounts. Taking the two together, we are hopeful.

Gregory Kronsten is Head Macroeconomic and Fixed Income Research, FBNQuest


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