Mr. Lanre Ajayi is the immediate past president of the Association of Telecommunications Companies of Nigeria (ATCON) and the managing director of Pinet Informatics Limited, the first internet service provider in Nigeria.
In this interview, Ajayi speaks on issues affecting the telecommunication industry. Excerpts:
Can NCC attain 30% broadband penetration by 2018
We are already in 2018, so, I don’t think we can realise it. From the report we have seen, we are doing about 20 per cent broadband penetration and end of the year is less than 10 months. So, considering that, I don’t think we are going to achieve 30 per cent penetration before the end of the year. But we have made some progress, at the time the target was set we were doing something like 8 per cent broadband penetration, which was around 2015. So, from 2015 to 2017, we have moved from 8 per cent to 20 per cent but I can’t see us do 30 per cent before the end of the year. I expect the commission to set another broadband plan as the one we have we expire this year. There is always a need to set goals but goals should not always be short-term but fairly long term and we should have strategies of achieving goals that are set. I actually thought by now, we should have goal for another broadband plan that will span between 2018 to another five years. I think the government should think of another plan that will replace this expiring plan.
How to accelerate broadband penetration in Nigeria
What we needed to do was already itemized in the existing broadband plan. There are a whole lot of milestone we ought to have accomplished but we have not which is what led to the low broadband penetration. For example, there are some spectrums that are meant to be auctioned that up till now are not auctioned and are not made available for operators to use. Also, there are some licences meant to have been given out, particularly the infraco licence, the original plan was to have a number of infrastructure companies located in different geo-political zones of the country but I think that they are just about three of those licences issued out, others are still pending. So, there is a number of other things that ought to been done that would have accelerated broadband penetration but regrettably those things are still left undone and would be the reason we are having low penetration.
ISPs agitation about operating environment
Yes, it is. If you do a comparative analysis of the cost of internet in Nigeria to many other countries, you will discover that the cost in Nigeria is way lower than many other countries. And when you are providing services at the cost that is lower than the cost price, then at some point, you may go bankrupt. Certainly, it is not in the interest of the consumers for the providers to go bankrupt. So, to avert a situation where many providers are collapsing and going out of business, it is just right to charge appropriate price for services that are being provided. There must be a reasonable profit margin above your cost price for you to remain in business but, because of intensive competition or unfair competition, pricing is set to be below the cost price of operators today. So, there is a need to have a plan that will ensure that you at least recoup the cost of your service.
Why NCC licensed Infracos are yet to roll out
Several challenges and the biggest of them is the right of way issue. Unfortunately, the issue of right of way permit does not lie with NCC that issues the licence. The right of way permit is issued by the state government and there have been several challenges securing the right of ways. And when they are given to operators, they are given at a price beyond affordability. So, that is major challenge about rolling out of infraco operations. Much more efforts have to be put in place to ensure that state governments come to terms for the need to make it pretty easy for operators to obtain the right of way permit. And this is the way forward for infraco roll-out.
Much ado about network expansion
I will not say all is well. We have seen challenges that are being faced by operators. If your earning is not matching your cost of service or the cost of productions, you will have challenges. You can see some operators already having challenges. I will not say all is well, if for example the challenges of right of way, we just discussed is not resolved, there is no way operators will not have challenges in rolling out the operations. Again, if the cost of borrowing does not come down, (the interest rate is too high), that would also constitute impediment in rolling out additional infrastructure. So, there are huge challenges out there that must be confronted, before we can expect network expansion.
Govt’s effort to curb challenges facing operators
Government has a lot of roles in addressing these challenges. I have mentioned that the state government has responsibility on the issue of right of way and it is within their control to address. They should be sensitized on the need to address that. The Central Bank has some level of control on the issue of interest rate, they could be invited to intervene. There are some sectors that enjoy special interest rate, at least a number of sectors have intervention from CBN on cost of borrowing. Similar intervention could be extended to the telecommunication industry. Government has a huge role to play, if it really appreciates the importance of telecommunication in the economy, especially for the fact that it is a catalyst for growth for other sectors. If we appreciate this fact, government has to come in and address some of the challenges that are facing operators.
How Executive Orders of President can assist local contentI think the executive order is a welcome development, as recognition that local content is an important area we need to pay attention to because we need to add local value to whatever we are doing. We cannot continue importing everything, including human resources, to Nigeria to develop our economy. So, we should try to look inwards and try to use our local resources to develop ourselves. The executive order is quite encouraging because it is encouraging government ministries department and agencies to buy local-made products. Government is biggest buyer of many products. So, if government patronizes you, your chances of success are really high. Government should encourage local entrepreneurs by buying their products and services as against buying things that are imported.