Phone Nigeria Globacom – A Bag Full Of Expectations

Source compassnews.net: 4 January 2010

Despite the ravages of the great depression, the information communication technology (ICT) sector of the economy trudged on in 2009. Lucas Ajanaku reports that year 2010 holds a lot of promises and expectations for the sector, as the year is expected to help consolidate on the gains of the revolution.

When Dr. Shamsudeen Usman, Minister of National Planning, said Vision 20:2020 was not another wishful thinking in the limbo of time, it was the unprecedented successes recorded in the Nigerian telecom sector in just eight years that gave him the confidence that it was a dream that is realisable within the appointed time-frame.

“The giant leap recorded in the telecom sector was not achieved by expatriates but by Nigerians who showed uncommon commitment, self-belief and patriotism,” he said.

Usman, who is also the Deputy Chairman of the National Planning Commission, said he was encouraged by the progress made in the telecom sector, which gives hope that Nigeria would make the top 20 bracket before the twilight of year 2020. He said the growth recorded in the telecom sector in just eight years is a proof that with the right parameters Nigeria would migrate from its present 40th position to the top 20 bracket. He spoke in Kaduna at the twilight of last year.

Undoubtedly, the giant strides made in the sector over the years, have made Nigeria a reference point in appropriate regulation, not only in Africa, but in the world. These achievements reflect in the number of subscriber base that is now nosing the 80 million mark, the huge foreign direct investments that have found its way into the national economy estimated in the region of $14 billion, employment opportunities and other benefits that have come directly and indirectly to the nation’s economy through the great march.

Ernest Ndukwe, boss of the regulator in the sector, the Nigerian Communications Commission (NCC) said the agency will not rest on its oars as it will continue to do everything to encourage continuous investment into the sector.

Against this background, the New Year is repleted with expectations and promises. One major expectation of Nigerians is a drastic reduction in call tariffs. Just as the year was completing its full circle, the NCC announced a new interconnection rates for 2010-2012 which are intended to impact positively on retail tariffs. Interconnect rates are the rates which service providers pay to each other for terminating calls on their fixed or mobile networks.

The interconnection rate for mobile voice termination provided by new entrants (operating for less than four years) irrespective of originating network will be N10.12 from 31 December 2009, N9.48 from 31 December 2010, N8.84 from 31 December 2011 and N 8.20 from 31 December 2012.

Operators not defined as new entrants will apply a mobile voice termination rate of N8.20 from 31 December 2009. Fixed voice termination rates have been set at N10.12 from 31 December 2009, N9.48 from 31 December 2010, N8.84 from 31 December 2011 and NGN 8.20 from 31 December 2012. New entrants’s SMS termination rate will start at N1.94 from 31 December 2009, and reduce gradually to N1.02 from 31 December 2012. Other mobile operators will charge N1.02 from the start of 2010. All termination rates will be symmetric after 31 December 2012.

The NCC had in March last year appointed Detecon International and Price Water House Coopers, as consultants and advisors to the Commission for the review of current interconnection rates among the Nigerian telecom service providers.

The two consulting firms were to conduct cost study as well as international benchmarking studies as a follow up to the one conducted in Nigeria in 2006 which led to the enactment of the existing fixed and mobile termination rates in the country.bThe consultants were also expected to have sessions with the operating companies during the months of March and April 2009 while their reports are to be submitted to the Commission before end of April, 2009.

The Commission said that with the growth of the nation’s subscriber base, and changes experienced in the operating environment, it has become necessary to review the interconnect rates so as to be in tune with current realities.

Ndukwe said, “We are happy that the two well respected international firms are involved in the study and we expect the operating companies to give the consultants full cooperation.”
Nigerians will look forward to the conduct of another bid round for licences for the four slots of 20 MHz each in the 2.3 GHz frequency band which opened on April 30, 2009, and ended at the close of banking business hours on Friday, April 8, 2009.

Three companies, out of 40 applicants short-listed for the exercise, paid the fixed price of N1, 368 billion, for each of the four slots on offer, bringing the total sum realised from the spectrum sale to N4.104 billion.

The three companies have automatically won three out of the four spectrum licences on offer.
Mobitel Nigeria Limited, Spectranet Ltd and Multilinks Telkom Limited clinched the licences Galaxy Wireless Limited, did not pay the full fixed price for the slot, and therefore, did not meet the conditions for the offer of license. But the issue generated a lot of bad blood in the industry as it openly pitted the NCC boss and the Minister of Information and Communications, Prof Dora Akunyili, against each other as the latter had allegedly cried foul over the untidy manner the bid round was conducted.

After a long lull and the attendant roforofo over the 2.3Ghz auction, President Umaru Yar’Adua voided the exercise and ordered a fresh one. Both Bayo Banjo, vice president, Association of Telecoms Companies of Nigeria (ATCON) and Deolu Ogunbanjo, president, National Association of Telecoms Subscribers (NATCOMS) said the manner of conduct of the exercise was bound to elicit the flurry of criticisms that attended it. While Banjo lamented the loss of grip of the sector by the NCC under Ndukwe, he said the NCC boss should excuse himself from the conduct of any fresh bid as “he no longer could play the role of an unbiased referee.”

Banjo and Ogunbanjo need not worry as the tenure of the EVC is due to lapse early in the year. The lot will inevitably fall on whoever succeeds him to conduct the fresh bid round. Nigerians too will be eager to tap from the multi-million dollar undersea cable of Nigeria’s second national operator, Globacom, which berthed in the country from the United Kingdom towards the end of last year. The 9,800km-long cable from UK through Mauritania, Morocco and 16 West African countries with dedicated extension to New York, was anchored at its Landing Station at Alpha Beach, Lekki, Lagos.

Glo 1 cable is expected to deliver transmission capacity that will radically change Nigeria and Africa’s economic landscape by providing high speed internet services and make telecom services much faster, more reliable and cheaper for consumers. With a current capacity of 640 Gigabit per second and an ultimate capacity of 2.5 Terabit per second, experts say its ultimate capacity is enough to cater for the required broadband capacity of Nigeria for at least the next 15 to 20 years.

The facility will provide the needed opportunity for West African countries and indeed Africa, to leap forward economically through an excellent communication network and a cost-effective voice, data, video and e-commerce services across Africa, Europe and the rest of the world. With 99.9 per cent up time reliability, world-class long distance voice, video and data communication services for African customers, the undersea cable will support the large bandwidth requirements of direct consumers and other service providers.

The cable will free up resources for other forms of investments which governments and business developments need, through broad market coverage at high capacity and at a fraction of cost and time, and also facilitate foreign investment and employment opportunities in the sub region.

The Intrepid, the ship which brought the Glo 1 cable, later left for Accra, Ghana to complete the Phase One of the installation in other West African countries including Senegal and Cote D’Ivoire. The landing of Glo 1 in Ghana will also boost the preparation for the nationwide launch of Glo Mobile Ghana. Glo also said that the Phase two of the submarine cable project will connect South Africa through Angola.

Again, the telco launched Glo Broad Access, which is expected to put the industry on a revolutionary course. It said it will offer the benefits of convergence of advanced voice, advanced data and advanced video on one single wired line. The benefits of fast broadband internet, stable and distortion-free voice connections, video conferencing and even cable television through Glo wired lines installed in their homes and offices at a very low cost will be for subscribers.

Honourable Dave Salako, House of Representatives Communication Committee boss recalled the vacuum created by the exit of Nitel in the provision of fixed lines in the country, said with Glo Brodaccess now, the era of cheap and efficient telephony is back in the country. He said Glo Broad Access is another giant stride and a milestone in the telecommunications in Nigeria because it will now fill the vacuum created by the inglorious exit of Nigeria Telecommunication Limited (NITEL) from the scene and the consequent death of fixed lines in the country.

Another milestone expected in the country as the year rolls by is the coming on board of Main One submarine fibre optic cable project. Funke Opeke, Chief Executive Officer of Main One Cable Company, said the first phase of the $240 million of the project will be concluded “in mid-2010 as promised.” Glo 1 and Main One undersea cables are bound to have a revolutionary effect on voice, data, internet and video at no punitive costs, telecom sector analysts said.

The Main One cable project which arrived Ogombo Beach Lagos for shore-end laying, involves the laying of 7,000 kilometres of submarine fibre optic cable between Seixal (a suburb of Lisbon) in Portugal, Accra in Ghana, and Lagos in Nigeria, respectively. The system will be based on a trunk-and-branch topology and include branching units to the Canary Islands, Morocco, Senegal, and Côte d’Ivoire.

The 1.92 Terabits per second of available bandwidth will be leased wholesale to telecom operators and internet service providers on an open access basis, thereby encouraging competitive pricing and a large customer base. The project has already attracted broad interest and MST, the Nigerian based sponsor, is in the process of securing long term contracts with a number of the largest operators in Nigeria and Ghana.

According to telecoms sector analysts, the investment is coming at an appropriate time as it will unlock the constrained West African telecommunications market and catalyze the economic potential of the region. “A compelling opportunity exists to lower the restrictive cost of international telecommunications and significantly expand internet access via submarine cable, which will lead to greater efficiency and more competitive business. Main One is an important step towards realizing this opportunity,” an expert said.

The considerable increase in available bandwidth from the Main One cable will provide telecom operators with the additional capacity they require to expand networks and mobilize a broader range of services. The system will contribute to an immediate 50 per cent drop in the price of bandwidth in Nigeria and Ghana, and continued price reduction is anticipated over time. Speaking on the project, Tim Turner, AfDB Private Sector Director, said, “The project’s main positive outcomes stem from its strong infrastructure development effects. By dramatically lowering the cost of ICT services, annual cost savings to West African consumers will range from $30 million in the early years to $160 million within 10 years.”

In what is going to be radical overhaul of its corporate social responsibility, MTN, Nigeria’s largest operator (by the strength of its subscribers) more intervention in the health sector is expected to manifest in the year. Already, the telco has selected 12 hospitals for its dialysis centres across the country. Wale Goodluck, corporate service executive of MTN announced last year that the telco was worried by the high cost of treating kidney problems in the country. Similarly, the telco said it will establish six monogram centres across the country to cater for the increasing onslaught of breast cancer among women.

While the telco plans to splash a whopping N25 billion on customer care in 2010, being the cost of putting new call centers in place in the country and help create about 1,500 new jobs, more people are expected to lose their jobs in the firm. Akin Braithwaite, its Customer Relations Executive, said MTN had invested over N4.5 billion in state-of-the-art technology that supports a world class customer service. Some 65 staff of the telco got sacked last year while its parent company, MTN South Africa, unveiled plans to sack about 403 permanent members of staff in its South African operations. According to the plan, approximately 403 permanent employees may be affected towards the end of March this year, which comprises about seven per cent of MTN South Africa’s 4,679 permanent employees.

Khaled Khorshid, COO, Zain, said Nigerians will get better and improved services in the year. “From a customer experience, there is no significant difference between 3G and 3.5G. We’ll be starting to try out an even better technology in 2010,” the COO wrote in an electronic message to the Nigerian Compass.

Newest player in the GSM sector, Etisalat, the new year will see more aggressive expansion of its coverage area as it hopes to achieve 80 per cent of the entire population. Steven Evans, its CEO said innovation and high quality service to its subscribers will be the driving force of the firm in the new year.
It is also expected that SAT 3 optics fibre cable that failed last year from neighbouring country and brought untold hardships to its clients in Nigeria will receive managerial therapy to forestall frequent breakdown and improve its efficiency for international connectivity.

Joint management option has been advocated to bail the infrastructure out of the Doldrums.
SAT3 project is an undersea optics fibre cable connecting Cape Town in South Africa to the rest of West Africa coasts linking them to Europe through Portugal.

For Nokia freaks, the year may also see the manufacture of dual SIM phones come true. Alex Lambeek, the vice president, of the Finnish mobile phone manufacturing firm said, “Let start by saying that this is not the first time this question will be asked and you are not the first to ask the question. But all I can assure you is that we are looking into this. In the New Year, you will see a lot from Nokia.”

Nigerians who get fleeced of their hard earned money through the purchase of pirated software will heave a sigh of relief as software giant, Microsoft, promised to set up an information centre at the heart of Computer Village, Ikeja, Lagos, the market and den of software pirates. Some $160 million are estimated to be lost annually to the menace of this unscrupulous group of people.

In the local computer assembly front, Omatek and Zinox continues to strive to improve on the quality of their products. “Our operations are expected grow. Irrespective of the economic meltdown, the government of the day, in implementing its 7-point agenda will continue its function of providing roads, bridges, housing. Individual consumption yearnings coupled with advance technology in the ICT sector will guarantee a ready available market for the company’s products. The company’s initiative in the area of aggressive marketing drive will also increase our market share,” Dr Timothy Farinre, Group chairman of Omatek said.

Phone Nigeria Globacom, NITEL