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Nigeria: Untapped ICT Market Attracts Global Investors

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As Nigeria opens its doors to the investing world to partner with it to develop its information and communications technology, ICT industry and the economy in general, CHIMA AKWAJA x-rays Nigeria’s participation at the ITU Telecom World 2018 conference which ended on Thursday in Durban, South Africa.

Nigeria’s presence at the ITU Telecom World 2018 conference which held in Durban South Africa from September 10-13, was a global showcase of technological innovations from the information and communications technologies (ICTs) companies and small and medium enterprises (SMEs) that were present at the Nigerian Pavilion. The event brought to the fore, Nigeria’s huge untapped market potentials, savvy population, educated and skillful youths and indigenous innovations from the world’s largest black nation. This was the first time that ITU Telecom World was held in Africa.

A Platform for ICT Partnerships

Secretary-general of ITU, Houlin Zhao in his welcome address at the opening of the conference said “ITU Telecom World 2018 is a platform for everyone to forge new ICT partnerships,” he reminded delegates, urging them to “work together to ensure a smart and inclusive digital future for all – in Africa and in the rest of the world.”

Zhao said African has made giant strides to bridge the digital divide, noting that 20 years ago, mobile phone penetration across the continent was just four per cent. “The changes are significant. ICT has facilitated the growth of sectors such as entertainment, education, health, agriculture, small and medium enterprises (SMEs), etc. He promised that ITU would work closely with China and Africa to achieve the agenda of the China and African governments’ partnership to develop the continent.

President of South Africa, Cryil Ramaphosa who was the chief host told a packed audience in his welcome address that “ITU Telecom World provides a guide and in some ways a compass to the future. The deliberations that take place here concern the economy and society of tomorrow that we are building today. What you are talking about here has a bearing on the future of our economies as well as the wellbeing of society and humanity.”

Pillars of Tech Advancements

He also highlighted the three ‘pillars’ that would drive technological advancements: women, small and medium size enterprises (SMEs) and youth. The Fourth Industrial Revolution must be supported by these key pillars, or “it will fail” he stressed.  He said “Important to Africa and developing countries is the need for countries to share manufacturing and localisation opportunities to allow equal access and shared growth throughout the world.

“We support equitable access to global ICT resources such as orbital slots, satellites and governance of the internet.” He also detailed plans by South Africa to attract $100 billion in new investment over the next five years and licence radio frequency spectrum in the 2.6GHz, 700MHz and 800MHz bands to hasten the growth of mobile communications.

Abdulaziz Bin Salem Al Ruwais, Governor, Communications and Information Technology Commission (CITC), Kingdom of Saudi Arabia told delegates the event provides a global platform from which to push forward innovation in ICT, “linking small and medium enterprises to governments and the private sector to achieve greater benefits for the peoples of the world.” He also outlined plans for Saudi Arabia’s multi-billion dollar Neom Smart City project.

Tackling Challenges By Collaboration 

Rob Shuter, Group President and CEO, MTN speaking at opening ceremony highlighted the importance of affordability and partnerships to connect the unconnected saying, “We cannot tackle the challenge of bridging the digital divide without addressing barriers around coverage, affordability and access of handsets and services, and education of our users. This endeavour is too complex to be addressed solely by governments or just the operators or civil society. This needs to be a shared goal. We must all work together for connectivity.”

He said since his appointment as MTN Group CEO, he has been travelling to MTN’s different operations and seen the impact of mobile connectivity across our Sub-Saharan Africa and Middle-Eastern markets. “Great efforts are therefore needed to heed the call of organizations such as the ITU, to bridge the digital divide and foster a digital inclusive world. I have also seen the real impact of mobile solutions, enabled by data, and how this is changing the lives of people across all of our markets” he said.

J. Zhou, vice president Huawei adding his voice said the global telecom vendor is working with several African governments and telecom operators to build broadband and ICT facilities that would provide the plank form a digitally inclusive Africa.

Nigeria’s Investments Attractions

At the official opening of the Nigerian Pavilion and Investment Spotlight which held the second day, the telecom world gathered to hear Nigerian delegates reel out the massive untapped opportunities in the country’s ICT industry such as 30 per cent tax rebates on all paid taxes; three years pioneer status to foreign investors in addition to subsidies for investors in broadband infrastructure.

The event was graced by hundreds of investors and telecom experts from across the globe including Mr. Houlin Zhao, secretary-general of ITU; Mr. Rob Shuter, CEO/President, MTN Group; High Commissioner of Nigeria to South Africa; Mrs. Nkechi Ejele, permanent secretary, Ministry of communications; Chairman of the NCC Board of Commissioners, Senator Olabiyi Durojaiye, among others.

Executive chairman, Nigerian Communications Commission (NCC), Professor Umar Danbatta disclosed that in addition to other attractions has made the Nigerian telecoms market a-go-to for foreign direct investments (FDI). With a population of 180 million, active subscriber base of 162.3 million and internet penetration of over 100million, Nigeria remains an attractive Country for investors who crave for adequate Return on Investments (RoIs).

An Untapped Broadband Market

Despite the huge growth recorded so far, the Nigerian telecom sector voice penetration is still about 50 per cent while broadband penetration is 22 per cent. The quality of service is still far from desirable, which are key attractions for investors. Nigeria needs 120,000km metropolitan optic fibre coverage for ubiquitous network connections nationwide.

With only 38,000km coverage now, this area also beckons on both foreign and local investors. There are also opportunities for investors in Digital transmission system including microwave, satellite and optic fibre; Submarine cable Communications; Digital Exchanges for both wired and wireless lines; Billing systems; Data Communications Networks; Broadband and Integrated Service Digital Network (ISDN).

“In our modest quest to bridge the digital divide, the board of the NCC has put in place initiatives to fast track internet access and taking services to several unserved and underserved areas of Nigeria Although we have 162.3 million active subscribers on our various networks, we at NCC believe there is much left to be done in terms of improvement of Quality of Service, more access to as many people as possible” said Danbatta.

The telecom regulator admitted that Nigeria’s telecom sector’s Quality of Service is not where he wants it to be yet, but with time and increase of infrastructure deployment, the industry should be there soonest than later. Only recently, the Vice President of Nigeria, launched the ICT Roadmap in Nigeria to drive broadband penetration for accelerated economic growth.

“We at NCC are conscious of the role assigned to us in the Roadmap and National Broadband Plan to drive Broadband penetration beyond the minimum target of 20 per cent to reach the maximum target of 30 per cent target, hopefully before the end of 2018. At 22 per cent, we have already exceeded the minimum target.

“While we celebrate the seemingly success story recorded in these directions, the NCC has put in place incentives for Infrastructure Companies (Infracos) in order to encourage speedy deployment of infrastructure that will deepen broadband penetration as quickly as possible. This is part of the roadmap to take Nigeria to the next level under the Open Access Model template.

So far, six Infraco licences have been issued to cover Lagos, North East, North West, South South, South West and South East zones of the Country. Arrangements are underway to re-licence the North Central zone. The NCC had earlier assigned 2.3GHz licence to Bitflux Consortium and six of the 14 slots available on 2.6GHz to MTN Nigeria and two slots to Openskys.  Six slots are still available for assignment.

Incentives For New Investors 

Danbatta informed foreign investors that among initiatives to encourage investors, the NCC has created provisions in its 2017 and 2018 budgets as subsidies to the Infracos. “This is essentially to be disbursed piecemeal to the InfraCos as the deployment of their infrastructure progresses. We have assured all the licencees that this subsidy is based on the implementation/milestones of their roll out obligations.

Also, as part of the flexible approach to regulatory management and constant stakeholders’ engagement, NCC introduced Spectrum Trading only a few months ago, to enable holders of such spectrum not in use to transfer, lease or share it out to those who may have a need for it. “We see this as a cutting-edge regulatory initiative to safeguard the use of this scarce national resource.”

Essentially, the Spectrum Trading is an initiative to boost the secondary market for spectrum resources to facilitate efficient utilization of this resource through transfer, sharing and leasing. The adoption of this framework in Nigeria is also envisaged to further liberalize spectrum management by the NCC principally to drive: Efficient, economic and flexible transfer of spectrum to users who value it most; Lessen barriers to market entry by allowing access to spectrum resource; and Promote market competition and innovation as the spectrum acquired in the secondary market will lead to offering new services in the sector.

Attractive Investment Climate

Nigeria is strategically located between West and Central Africa, giving investors easy access to approximately 190 million Nigerians and an additional 200 million West Africans, as well as 150 million Africans in Central Africa. It also has one of the largest economies in Africa which, according to the World Bank, has a Gross Domestic Product (GDP) valued at $405 billion.

Director-general, National Information technology development Agency (NITDA), in his presentation on Effective Regulation for Investment in Nigeria’s Thriving ICT Sector said Nigeria, of recent, has experienced a boom in education and this has led to an increase in skilled manpower and a growing middle class of about 42 million.

“This has become evident in the entrepreneurship drive of its population and the increasingly significant role technology is playing in their lives. In recent years, ICT has become one of the most vibrant industries in Nigeria, and the reason is not farfetched. Millions of Nigerian youths are beginning to give-up formal employment to learn hands-on ICT skills like programming and networking, which has positioned them for better opportunities. Other sectors of the economy that experience boom include finance, services, e-commerce etc.

“We have a good investment opportunity in the hardware sector. The computer hardware industry has seen a lot of investment from Original Equipment Manufacturers (OEMs). We currently have 7 local OEMs but they can only meet about 20% of the local demand for computer hardware. We are happy to facilitate the establishment of world class Original Design Manufacturing (ODM) factories in Nigeria to guarantee quality components assembly locally.  This is another important area that we seek partnerships and investments.

In August 2017, Nigeria’s Federal Ministry of Industry, Trade and Investment (FMITI) published the list of 27 new industries eligible to enjoy the pioneer status incentive in Nigeria. “Companies investing in these sectors receive tax holidays for three to five years. Some of the sectors include E-commerce services, Business Process Outsourcing and Software development and publishing. You are invited to invest in the sectors” said Pantami.

Hon Samson Osagie, Executive Director, Marketing and Business Development, Nigerian Communications Satellite Ltd, said ITU Telecom World 2018 has been a good platform for NIGCOMAT to showcase its services and products to the world. NIGCOMSAT according to her is in 38 Africa countries as well as footprints in Asia and Europe.

He said been able to showcase its satellite and services and solutions to governments and commercial use for private companies. Its satellite, NIGCOMSAT-1R, is a hybrid geostationary satellite with C, Ku, Ka and L band respectively. The company provides transponder leasing services, carrier spectrum management/in-orbit testing services, satellite LEOP support, cellular backhaul and rural telephony services; broadband services, satellite broadband services, etc.

Osagie said different proposals have come their way from other satellite operators that want to partner with us as well as other potential partners interested in our services from other African, Asian and European countries. “We are taking them serious and further discussions be held to cement the business relationships when we get back to Nigeria”, he said.

Companies who displayed their products, services and innovations at the Nigeria Pavilion include NCC, NITDA, NIGCOMSAT, Galaxy Backbone Limited, NIPOST, 21st Century Technologies Limited, MTN Nigeria. The SMEs and innovators include Dropque, Farmcrowdy, PrepClass, VoguePay, Wesabi and Zenafri.



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