Moving communication technology sector forward in 2018

The Nigerian telecommunications industry, having weathered one of its most turbulent years, is looking at a more stable 12 months where tariff wars will ease out. Also, companies will assemble their merged entities, more customer-centric products and services will emerge; improved availability to foreign exchange, and most importantly, government would do more in the areas of broadband deployment.

The sector, with its four big players, which may shrink to three, is expected to focus on improved quality of service, affordable data provisions, innovative services and other forms of business within the industry keeping the customer in mind.

It is also expected that there would be an overhaul of the National ICT inclusiveness strategy to enable cross -platform participation that would engender meaningful development.

Stakeholders are optimistic that the sector would come out of its challenges and make better impact in the year if the Federal Government and its representatives would be keen on putting actions to policies. The President of the Association of Telecommunications Operators of Nigeria (ATCON), Olusola Teniola, posited that more partnerships in the form of alliances will create a stronger industry better prepared for Fintech Industry 4.0, which can lead the growing but latent mobile money payments system.

Teniola hoped that government would accelerate the licencing of the remaining Infrastructure Companies (InfraCos), and that there should be the immediate non-deviation from the original Nigerian Broadband Plan 2013.

“Every hand on deck is required by all stakeholders in getting us as a nation back on track. Far too much time had been lost in talking about the digital journey and not enough energy has been spent walking on the path to our chosen destiny. I’m hopeful that NCC is fully aware of the challenges and we as an industry look to 2018 to catch up and ensure that every citizen has affordable access to high speed Internet,” he stressed.

Decrying the slow growth experienced last year, the Director-General, Delta State Innovation Hub, Chris Uwaje, said despite the inflow of foreign direct investment (FDI), and meaningful contributions to GDP,  ICT deliverables remain grossly a consumer-centric adventure in form and content. But it is devoid of creative thinking and innovation on multi-layers of national challenges requiring intensive multi-discipline and multi-tasking solutions.

Uwaje said the ICT/Telecoms Ecosystem in 2017, witnessed a declined growth and development not-withstanding the surge of Nigerian youths as Internet subscribers. “The major cause of the decline which was undertaken in furtherance to national security was the regulatory hammer on one of the major Network Service Providers -leading to a distressed disruption of the ICT sector.”

According to him, distressed disruption of the ICT development ecosystem was further registered by the non-appointment of the Board in most ICT MDAs at Federal and State levels.He said these disruptive tendencies contributed to stagnation of ICT companies and loss of jobs -leading to massive migration of the youths out of Nigeria (to Libya for example).Uwaje, who stressed the need to retool national workforce, and automation of all government processes between 2018 and 2020, also called on government to establish at least two ICT Parks, and two special ICT universities with more to follow.

Managing Director, Huawei Nigeria, Kevin Li, advised the Federal Government to begin aggressive investment in broadband in order to boost penetration across the nooks and crannies of the country, since some emerging technologies such as FinTech and AI largely depend on broadband accessibility.Already, PricewaterhouseCoopers (PwC), one of the biggest professional services companies in the world, had predicted that Nigerian businesses would soon begin to incorporate robotic automation into their operations, which is driven by AI and IoTs.The prediction is based on a recent research findings conducted by PwC on Shared Service Centres (SSCs) and Centralised Processing Centres (CPCs) across industries in Nigeria.

From his perspectives, the Chief Executive Officer, Airtel Nigeria, Segun Ogunsanya, who stressed that 2017was tough for operators, called for concerted efforts to move the sector forward.For 2018, Ogunsanya hoped that challenges confronting expansion of 4G services would be removed completely. He revealed that Airtel would make 4G services more robust and ubiquitous across the country.

“At Airtel we shall be looking at improving our 4G coverage, especially in underserved areas. We expect that by next year, there would be wider coverage of broadband, because we would need to extend services to education, health, transport, security, among other sectors. The regulator is also working on release of spectrum to aid service providers. We shall come up with more 4G sites. We started in Ibadan recently; we hope to extend it to other areas.”

The Chief Executive Officer, VDT Communications, Biodun Omoniyi, is skeptical about the country’s ability to meet the 30 per cent broadband target.Omoniyi revealed that between 2016 and 2017, Nigeria was only able to achieve one per cent Broadband penetration, saying “which ordinarily should be about five per cent. This means that with one per cent growth, there is huge deficit. That shows that we are not going to make it again.”

However, the VDT boss posited that if the authorities can get more serious with the plan, “something can be achieved this year.”According to him, there should be a shared vision between the Federal and state governments, “if there must be penetration. Most states governments see operators as ‘cash cow’ that they can milked to increase their IGR. I think they must be educated on the dangers in imposing charges and levies on operators. Most of them are not granting Right of Way to operators. Lagos, last granted about two years ago.”

With stakeholders looking at the possibilities of the sector achieving lots this year, Market Analysts posited that some major highpoints for the year would include:
Data is key
In 2017, telecom operators flooded subscribers in the market with data offers, and the New Year is expected to be the same. Data will remain the key focus area for the industry and operators will continue to target higher data usage and deeper penetration of data services.

According to analysts concentrating on data will open up avenues for Internet of Things (IoT), which will eventually be a good growth potential in areas such as home automation, connected cars, healthcare, retail, energy management, among others. “Since connectivity is the backbone for IoT, it is a natural fit for the telcos,” they said.

Telco alliances/takeover.
To retain its customers, operators will offer more data-voice bundled schemes and partner with content developers to drive data consumption through web series and other formats in 2018. Market watchers believed that telecommunications operator that tie-up with content providers will manage to get significant portion of voice-only subscribers to use data services, as more subscribers latch on to data.

“In 2018, we can expect more collaborations among mobile phone OEMs and network operators,” they stressed. This month is also expected to produce a new investor for 9Mobile that will take over both its assets and liabilities. The date for the takeover, which was supposed to be December 31, 2017, had to be shifted in order to be able to complete the entire process. The deal is expected to be completed in another two weeks. Already, five bidders are left in the race that is Globacom, Airtel, Helios, Teleology and Smile Communications, respectively. A winner is expected to emerge from the bidders.

New business model may emerge.
Market watchers believe that there will be a push towards newer models of business such as mobile virtual network operator (MVNO). These companies buy telecom services (calling, data, SMS, etc) from existing telecom operators, and provide differentiated services to the subscribers.“MVNOs can penetrate the already competitive market by focusing on value-added services in tier III cities and rural areas,” they stated.

Moving forward, Uwaje is hoping that Nigeria can do much better with knowledge intensive and we’ll organised ICT Ecosystem and productive Economy – especially where the ICT Skill-Sets in the Diaspora are harnessed. However, he said that the nation is yet to fully appreciate the enormity of the New World and strategic imperative of intense ICT intervention as all levels. “The consequences of this neglect may cost the nation huge disaster – recovery investment on retooling our future as late comers to ICT.”