Hope for Broadband of wealth

In a country of well over 160 million people, broadband penetration of less than six per cent is not only low, it is considered as a major embarrassment, particularly with the astronomic way in which telecommunication has grown in Nigeria in recent years. Yet stakeholders believe there is still hope for Nigeria becoming Africa’s leading broadband powerhouse but given the glaring challenges, there are genuine skepticism that the dream may indeed, be a tall one

Broadband technology, which simply means data transmission speed of high rate over the internet, has no doubt become the enabler in supporting the economies across the world. To a large extent, while it is no longer disputable that data transmission defi nes the speed at which businesses are conducted in most advanced countries of the world and there are suffi cient compelling statistics to show the correlation between broadband and economic growth.

According to the World Bank, in low and middle-income countries, every 10 percentage point increase in broadband penetration accelerates economic growth by 1.38 percentage points — a rate that is higher than broadband’s impact in higher-income countries and more than for other telecommunications services.

For instance, a new report, conducted jointly by Ericsson, Arthur D. Little and Chalmers University of Technology in 33 Organisation for Economic Co-operation and Development (OECD) countries, quantifi es the isolated impact of broadband speed, showing that doubling the broadband speed for an economy increases Gross Domestic Product (GDP) by 0.3 per cent. While a 0.3 per cent GDP growth in the OECD region is equivalent to $126 billion, this, according to the research corresponds to more than oneseventh of the average annual OECD growth rate in the last decade.

With the tremendous advantages, there seems to be a sore point for Nigeria. This is because despite its enormous bandwidth capacity sitting on the country’s coastline, majority of the Nigerian populace are Internet.

While Nigeria has conquered voice telephony with more than 116 million active lines compared to some 400,000 some ten years ago, yet data transmission is considered as a major factor which defi nes for them the speed which businesses are conducted in the new world order.

Nigeria is said to be have less than six per cent of broadband penetration, a situation which industry experts have said is a far cry to what is obtainable in developed world. Despite this, however, industry stakeholders are of the belief that all hope is not lost as Nigeria still has the potential of becoming Africa’s leading broadband powerhouse and bouy the nations’ GDP.

This optimisin is coming on heels of the fact that Nigeria currently have four active undersea cable systems ((Main- One Cable, Glo-1, MTN’s WACS and NITEL’s SAT-3) whereby the existing submarine cables carry an installed capacity of over 19.2 terabytes, about 340 gigabyte combined, a signifi – cant increase in the capacity available to drive bandwidth dependent services.

With only about six per cent broadband penetration in Nigeria, the opportunities are vast for creative and entrepreneurial Nigerians looking to showcase their skills and explore business opportunities online.

According to experts, any country seeking growth, job and wealth creation must address how it can increase its access to broadband and if governments can improve broadband penetration in the continent most Africans would have increased access to the internet.

In some major countries, broadband is considered a right of every citizen. In Finland for example, the government has legislated for every home to get broadband, 100 megabit per second in speed. The situation is similar in Japan which is reported to have the fastest speed of broadband in the world as well as cheapest cost of getting internet at home.

The country has more than eight million people on fi bre-optical line broadband at home – that means 30 times the speed of DSL line, the popular form of broadband technology in Europe.

To achieve broadband penetration in Nigeria, experts submitted that there is the need for the government to encourage and enforce the principle of open access and infrastructure sharing to already build transmission networks in order to facilitate an integrated national backbone.

For Fola Adeola, Chairman of Main One Cable, wireless broadband services alone can directly contribute an additional N190 billion ($1.24 billion) to Nigeria’s GDP by 2015 with indirect contribution as much as N410 billion ($2.7 billion) during the same time period.

Adeola said that just as “electricity was a century ago, broadband is a foundation for economic growth, job creation, global competitiveness and a better way of life. It is enabling entire new industries and unlocking vast new possibilities for existing ones. It is changing how we educate our children, deliver health care, manage energy, ensure public safety, engage government, and access, organise and disseminate knowledge.”

On the economic impact of broadband, the Nigerian Communications Commission (NCC), Vice-Chairman, Eugene Juwah said at a recent seminar that based on the World Bank position “doubling the broadband speed for the economy increases its GDP by 0.3 percentage points. The above percentage points may appear small but if you apply them to the Nigerian GDP at N40 trillion, you obtain an increase of more than half a trillion naira in the fi rst instance and N120 billion in the second.”

Juwah noted that it is not only Nigeria, or the developing world that aspires to enjoy the broadband revolution as pointed out in the June 28, 2010, a memo to the Heads of the Executive Departments and Agencies in his administration titled: “Unleashing the Wireless Broadband Revolution” by the US President Barack Obama.

Juwah said that one paragraph in that memo that has captured the thoughts of many who are dedicated to pursuing the broadband revolution reads: “Expanded wireless broadband access will trigger the creation of innovative new businesses, provide cost-effective connections in rural areas, increase productivity, improve public safety, and allow for the development of mobile telemedicine, telework, distance learning, and other new applications that will transform Americans’ lives. The statement above represents the veritable offerings available in any country that has pervasive broadband availability”.

Following the International Telecommunications Union (ITU)’s call for national broadband policy in Nigeria, the Minister of Communication, Omobola Johnson, said that the goal of the Nigerian government is to achieve one national network capable of delivering broadband speeds not less than 50 per cent of the average speeds available worldwide at the consumer end within the next fi ve years.

Comparing Nigeria’s rate of broadband penetration with those of other African countries, Johnson said that though “Nigerians don’t have it better” she pointed out that that it has been a major priority for the government especially her ministry in bringing out the infrastructure.

While admitting that taking broadband to the rural areas could be a little challenging, she assured that there are plans by the government to facilitate that process to put the technology on the ground as soon as possible.

Johnson said that a number of infrastructure providers are building connectivity across West Africa and Nigeria stands at a vantage position given the series of bilateral arrangements with neighboring countries especially the landlocked countries. “We’ve got tremendous capacities for internet connectivity, i.e undersea cable about 10 terabit of data and we can take that capacity up to the landlocked countries and also to the countries on the coast as well. So that is what we are looking at right now. We are working with number of countries already. And even one of our local undersea cable companies, Main one, is actually landing a cable in Liberia, Ghana, and other places. So those are the kind of arrangement we are having because connectivity in Nigeria would be enhanced if we actually connect with the rest of Africa and the rest of the world.”

But how long will it take to be able to deliver broadband access to the about 72 per cent of the population who don’t have access currently? Johnson said that by 2017, the nation would be getting about 30 per cent broadband connectivity. “We have about six per cent broadband communication now. We have a target to multiply by fi ve times by 2017 so that we can have about broadband 30 per cent broadband connectivity.”

However, Funke Opeke, chief executive offi cer, MainOne Cable believes that achieving broadband penetration might not be possible with the number of challenges being posed to it on daily basis. For instance, Opeke, said that only about fi ve per cent of the bandwidth capacity available on MainOne cable is currently being utilised, leaving the rest redundant.

Opeke who spoke at a recent interactive session blamed the poor utilisation of the cable on the absence of distribution and last mile infrastructure required to move available bandwidth capacity across the length and breadth of Nigeria. If Nigeria is to enjoy the benefi ts of broadband, she said, regulatory and legislative interventions were required to address these challenges.

Nigeria’s telecommunications market, according to her requires a well-rounded infrastructure sharing framework to encourage new entrants and stimulate investments in broadband in order to harness its potentials for wealth creation and economic development. “We strongly believe that it’s something government can set up in less than 60 days. It does not require years of study”, she stated.

The cost of moving internet traffi c from Lagos to Abuja, according to her is four times higher than the cost of moving the same level of traffi c from Lagos to London. This, she went on is because operators with huge fi bre infrastructure have not embraced infrastructure sharing.

Besides, those who have offer services at unfair and prohibitive prices. “Looking at the cost and competition policy under the Communications Act, there is absolutely no need for that pricing mechanism. We need to have more infrastructure sharing. “If people who build the infrastructure are running it over public rightof- way, and have received tax concessions to build those networks, I see no reason for such pricing mechanism. If private sector has built the infrastructure, then they certainly should make it available to other operators and networks on a fair and non-discriminatory basis. The Federal Government has done nothing about this so far”, she lamented.

But just like Opeke, Juwah also noted that “While the regulatory environment in the country has remained stable and attractive to the global investment community, there still a number of challenges, one of which he says is the issue of right of way.

State government, he said, could move away from the current practice of imposing one off charge for right of way, based on distance to a new regime of periodic revenue streams from their right of way assets as he noted that one way to realise these stream is to contribute the assets as participation in the project.

Alternatively, Juwah advised that state government may choose to barter their right of way assets for a specialised service from infrastructure operator. For example, access to right of way can be traded for a security surveillance network provided from the infrastructure.

But most Nigerians seem not to be too comfortable with the government’s broadband plan as they yearn to have a feel of it as soon as possible.

To Ayomide Amos, a banker, government should expedite their words with action rather than the usually talk on broadband at every event. “We need action rather than talk all the time. Let Nigerians have access to cheap and high speed internet and stop telling us how broadband operate.”

Another respondent, Olabisi Alonge of the University of Ilorin, in his own reaction noted, “I’m of the view that the government should show us the road map to achieve this. I hate it when government plays politics around something as serious as broadband. Anyway, we shall get there.”

But Raymond Uwuba, a teacher, sees broadband as a way to improve the nation’s GDP. According to him, the minister of Information technology deserves commendation and not condemnation considering what she has been able to achieve so far. “Minds of this kind are what Nigeria need in her forefront of development. Of course, the effect of ICT industry or sector broadband inclusive in Nigeria has been so tremendous. It is one of the sectors and channel that touches every individual individually. For me, I can say my life has never remained the same again, considering the exposure, improvement in reading habit and how the internet has encouraged reading through available materials at my fi nger tips.”

Alowolodu Taiwo Julius however submitted that the bane of most government policy initiatives is lack of priority and vision. “We preferred to trade out future for pecuniary gains. Have you ever asked yourself why internet service in Nigeria is three times cheaper that of South Africa despite the fact that the total subscriber base is a fraction of Nigeria’s?”


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