Broadband News

Nigeria should lead Africa’s ICT revolution

14 January, 2013

Source: ICT Africa Team

 
ICT Africa team

There is increasing evidence that broadband drives economic growth and job creation. Without accelerating broadband penetration, Africa will be left behind by the rest of the world in a global economy that is increasingly becoming digital. Countries like Nigeria should take the leadership and set the benchmarks for accelerating broadband penetration in the continent.

Nigeria has all the metrics necessary to accelerate broadband penetration. The country has the second largest GDP of $400B (Purchase Power Parity) in Africa and according to an HSBC report, “The World in 2050”, Nigeria is expected to stand out as one of the growth markets in 2050 – along with Mexico, Turkey and Saudi Arabia. But this comes with a caveat that for the projected economic growth to be a reality major government and industrial foresight is required. Such foresight, in our opinion, includes diversification of the economy by reducing over dependency on petroleum and embracing emerging technologies, including ICTs.

In addition to the financial muscle necessary to building a modern broadband infrastructure, Nigeria is blessed to have a population density that can enable a more cost effective deployment of a broadband infrastructure. While the average population density of Africa is about 28 people per square kilometre, making it costly and challenging to deploy infrastructure that connects sparsely distributed communities, Nigeria’s population density stands at about 140 people per square kilometre. This gives Nigeria a significant advantage for broadband rollout than more sparsely populated countries such as the Democratic Republic of Congo, with a population density of about 30 people per square kilometre.

Another criterion that should put Nigeria in a leading position in broadband infrastructure deployment is its content creation and the need to distribute content electronically. Nigeria’s exploding film industry, Nolywood, is ranked second in the world, after India’s Bollywood, in terms of annual film productions currently at about 40 per week. The industry relies heavily on the Internet for content distribution and yet with a broadband penetration of less than 5%, the industry is being stifled. The need for content distribution provides for readily available demand for broadband. It is estimated that about 30% of the USA bandwidth is consumed by NETFLIX video distribution. It is safe to assume that traffic from content distribution sites, such as IrokoTV, will provide a significant percentage of broadband traffic when high quality broadband access becomes readily available in Nigeria.

In addition to video distribution, we have witnessed lots of innovation by ambitious Nigerians who create new technologies and devices, such as the Inye tablet, that will depend on broadband connectivity for their success. Many Nigerian government departments have initiated development programs that would drive demand for broadband. The recent controversy about the government plan to spent 60 Billion Naira on mobile handsets for farmers is a clear indication of the need by the government to take advantage of ICT to develop agriculture. All this is potential demand for broadband capacity that the operators should capitalise on.

Despite everything at its disposal, Nigeria is still a long way from becoming Africa’s ICT leader. Internet penetration is currently at about 28%, far lagging Morocco which is at 50% Internet penetration but with half the population density and less than half the GDP. Broadband penetration is even more worrisome – less than 5% of Nigerians have access to broadband Internet. Most of the broadband connectivity is via mobile networks which suffer from poor quality of service mainly due to congestion and long down times. One criterion we have adapted for determining the preparedness of countries to offer high quality broadband connectivity is the percentage of their population within reach of fibre optic infrastructure. Thirty countries in Africa lead Nigeria in terms of the percentage of population within 10km of a fibre optic infrastructure – about 30% of Nigerians are within 10km of an optical fibre compared to more than 50% for South Africa, Libya, Rwanda, Mauritius and a few other countries.

Paradoxically, the Nigerian ICT regulatory environment that enabled the participation of a large number of players in the industry by offering many operator licenses is the same environment that is largely responsible for the slow deployment of broadband infrastructure. Nigeria is well known for being the world’s most expensive country for rights of way to deploy fibre optic networks. By overcharging rights of way, the Nigerian regulator is making the already high cost of deploying fibre optic networks difficult to afford by many operators. On the contrary, the Nigeria Communication Commission (NCC) should slash the cost of rights of way as an incentive for more operators to deploy the much needed terrestrial fibre networks throughout Nigeria. Even where operators are willing and able to pay the hefty rights of way, it has been reported that the authorities take too long to grant the rights of way – a bureaucratic practice that slows down the rollout of infrastructure. A number of operators, such as Etisalat Nigeria, who for several years have been contemplating deploying their own fibre optic backbone, have been slowed down by the issue of rights of way.

The fact that only 30% of Nigerians are within 10km of an optical fibre does not mean that Nigerians have not deployed a lot of fibre optic cable in the country. At least 29 000km of cable is already operational in Nigeria and another 8 000km is under construction. While the cable is not enough to meet all the modern broadband requirements of Nigeria, a lot of the cable is installed along a few high traffic routes. It is common for two to four operators to install cable along the same high traffic routes while very little is deployed in other parts of the country. We call upon the NCC authorities to come up with regulation that would encourage operators to rollout cable in areas where cable is currently missing. This could be achieved by restricting the number of operators that can trench along any given route or give incentives to operators who can deploy cable where it is not already installed. In South Africa, for example, the regulations restrict only one company or a consortium of companies to deploy cable along certain routes. Such regulation has forced companies like MTN, Vodacom and Neotel to pool their resources together and install their cables along common tranches. We understand that at least 90% of the cost of deploying a fibre optic network is spent on civil works and when operators share these costs, they are more likely to save a lot of money and be able to extend their networks to most parts of the country. Such a model in which operators are regulated to take a concerted approach to infrastructure deployment is not only beneficial to the people but to the operators themselves as they drastically reduce the overall cost of building their networks.

In summary, we believe that Nigeria has all the attributes required to lead the African ICT revolution but the government should provide an environment that facilitates this goal. The regulator should enforce more innovative and a concerted approach to broadband infrastructure deployment by telecommunication operators.


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