Mr. Oladipo Raji is the president/chief executive officer, InfraFocus Technologies Limited, an indigenous ICT service company. In this interview with Daily Sun, he points out that the biggest problem facing the country is lack of infrastructure and, until it is fixed, the economy would continue to underperform and indeed play the second fiddle in the global economy,.Raji also speaks on issues affecting the ICT industry and the economy in general.
Excerpts…
InfraFocus Group
The group is a conglomerate of IT companies. We have five companies that make up the group. The company was established in 2016 by a group of passionate individuals with over 30 years’ cumulative experience in ICT and a vision to transform the way ICT solution and services are delivered to corporate organisations. Today, the group is one of the fastest growing ICT companies in Nigeria, with a growth of over 1,000 per cent in the last two years and huge potential for more growth in the years ahead.
The group is an indigenous ICT company with a clear focus on providing ICT infrastructure, solutions and services to solve present and future problems.
All we do is IT. We provide end-to-end IT solutions. But. then, our focus is corporate, whether government or private, we don’t deal with individuals.
Operating environment
Like any other business, the operating environment is challenging for us as well. We face the same problems that every other person faces, infrastructure problems, power problems, because we are an IT company. Power is very important for us. Water and every other problem that a typical company faces, we also face. Apart from that, there are lots of competitors in our space. Today, everybody is an IT guru, even schoolchildren. Once you have a phone and you can go to the Internet, everybody believes that you are IT-savvy. So, we face that challenge. The truth is that there are not so many good people or companies out there, but there are so many people that claim to do whatever we are doing.
The biggest problem for us in this industry is getting the skill set. There are people out there, many graduates that are not employable. So, for us, what we have done is to devise a means where we train people. So, we created an academy where we train people and use them after the training. We are taking fresh graduates from school and training them for two to three months, and then employ as many of them as we can to do our job. But there is some times when you need high-end skills that those fresh graduate will not get by just training. So, you have to look somewhere, there are some times when we have had to look outside the country to get the skills. The good thing about IT is that you can work from anywhere, yes, we don’t need to bring in people from India or the UK to work here, you can engage them right in the country, they do the work and send it back right here and we are good.
Solving the power problem
Power is the big thing and there are different value chains in the power sector. For example, you have the generation, because there has to be the power itself, it has to be made, it has to generated, then you have the transmission, because it has to move from where it is generated to a place where people are around to use it and that’s the transmission. Then you also have the distribution. Which means you have to now send that power from where you deposited it into different homes and offices where it will be used. So, to solve the power problem, you have to do it holistically. If you have very good infrastructure to distribute but you don’t have good generating plans to generate, or you don’t generate enough, it is only what is available that can be distributed.
So, that’s the issue. Our problems cut across. First, we don’t have enough that is generated. Only 4,000 megawatts is not enough for Nigeria, it is far from being enough. We have to generate, and to generate power is expensive. It’s expensive in terms of the infrastructure and space you need. Even if you want to do solar, you need a large expanse of land to be to generate it, if you use coal, you need a large expanse of land to be able to do it. So, such infrastructure can only be provided by government or large corporations like multinationals who have access to those kinds of funds. The problem has to be fixed, if you provide the fund.
Another thing we are suggesting is that government has to decentralise power generation. It can generate in every state or every local government. When you generate from multiple places, it becomes easier than concentrating it. And if you don’t want to generate in smaller places, then you need to decentralise it or deregulate it such that people can get a license to generate, such that, for example, so I can generate enough for my street and then sell to my street and make money from that.
Once you solve the generation problem, then you face transmission, because you are generating from a central place. If you decentralise it, if I am generating from this estate and selling to my street, there is no transmission. it is just generation and distribution, because the same place I am generating is the same place I am selling to. So you solve one big problem of transmission. Today, we have only one grid that all the different sources comes from and if that grid goes down, every other thing goes down; but if every street generates and sells, because you have licensed people to do that, then you have removed the transmission problem. That’s one easy way to solve the problem. And many people can look into it. And for us, as an example, as a company, we provide some services around power, but we don’t generate because we are not licensed to generate. However, what we can do, like providing generators, which also generate power, we supply the power and we have smart solutions to monitor the power for each home and also know how much power you consume and monetise it. We are already doing this. There are many solutions in the IT industry, but if there is no power we are metering, what value is our metering solution?
Broadband penetration
Today, we have growth of Internet in the country. I think five cables landed in Nigeria. We have spent close to a billion dollars to bring in different cables to Nigeria, with huge capacity. But they are at the seashore. We don’t live on the shores, we are not fish. The cables that land on the shore, they need to go to the hinterland. When there are no communication infrastructures like fibre criss-crossing the entire country, it becomes difficult. If we are in Lagos, we probably get fair connectivity to Internet and some level of broadband. Maybe you can get up to 1MB, sometimes on the phone in your house, but an average home in America has 100MB. So, even if you get 1MB, it is just 1 per cent of what an average home will get in America and that’s because we are in Lagos. When you start going to the north, south, east, what is available drops because there are no infrastructures into those places. That’s the problem. And government itself is not making any investment in that space and the private sector who are making investment in this regard are limited. They are commercially driven, why should I put a fibre in some remote area in Maidugri when I can make so much money in Lagos with the same fibre? It is commercial, purely commercial. And then, if I put it in Maidugri, it gets cut every now and then, l have to spend money to fix it. And the people there will not pay as much as people in Lagos are paying. So, that’s the problem. We have a big problem with infrastructure that we need to fix and, if we fix that, broadband will be available in most parts of the country.
We also have a problem of regulation. The way regulation slanted is skewed and I will explain to you. Today, we have the telcos that are in the forefront of telecommunication in Nigeria, the GSM companies. The four of them are there, but there’s a limit to what they can do. We have 200 million people and you licensed only four companies to do everything. They do voice, they will do data whether it is mobile data or fixed data, whether it is corporate or it is mass market. They are limited in their capacity, they can’t possibly deliver the needs of every single Nigerian. So, ideally, the market should have been segmented such that you have people like the telcos who are the primary labels.
Like in those days, we had the distributor, re-seller and all that. So you put them in there because they have bulk capacity. And then, instead of selling normal meg to individuals, they sell in bulk to another set of people or value chain that they break the bulk and sell piecemeal. Equally, it is only in Nigeria that you see that the person that brings cable from London to Nigeria is also selling to the man on the street. So, when you now have smaller companies who are buying from these people and are supposed to sell to the man on the street, how can he compete? No way, you will just kill that value chain. In many economies, you have so many Internet service providers in different localities; even in a local government, you can have up to three ISPs in that locality. So, they cover that place. They buy from the big player and resell the way service is available. So, we have that problem of regulation, especially the fact that the market is not segmented, everything is locked up. There is this universal license that is given to the big operators, you need a license to do everything and they keep everything to their chest. But they can’t do everything. Because they have taken a license for everything, the smaller people can’t play because you have to go to them to buy to sell.
To solve this problem, since not everybody can go to London to bring Internet, the few people that can go, leave them on that space and let every other person come to them to buy. That’s how to structure a market, where you want to grow the economy. Not that you allow one person to do everything, which is not possible. So, this is the challenge of infrastructure, the challenge of regulation that is not properly done. And, of course, you have the challenge of general skill, which affects everything, because people need to be skillful to be able to do anything. So when we don’t have skill, it is a problem.
Infracos
I am not surprised that they have not commenced operation. Initially in some of the fora organised by NCC, we made the point that it would not work. Let me give you a reason why it won’t work. Number one, the companies that you licensed for infraco, most of them are the same companies that landed the cable in Nigeria and this investment cost more than $300 million.
The money they borrowed from the banks or from investors, they are still struggling to get out of that debt and then, again, you give another license to lay fibre in the country, another investment of more than $200 million. The one they did years ago, they are still struggling to get out of it.
Okay, let’s even assume that they are successful in doing that. When you give them a region to lay fibre like in all the South-West, how are the smaller operators going to compete? You are making that kind of organisation even bigger and destroying competition, because now they holds the fibre that comes from London to Nigeria and even the fibre that come from Lagos to all the South-West. This kills competition, how do you expect the smaller ISPs to compete with this kind of arrangement? But assume that you have different chains, for instance, you have a company that does the the fibre between Lagos and South-West and that company is not selling to individuals but to licensed ISPs at a regulated price, and that company is now selling to individuals, which is what we expected the NCC to do.
The NCC does not even need the infracos. What it needs to do as the government is to lay the fibre and then find a company to manage it. By so doing, there will not be any anti-competition because it would be fair to everybody.