Category: e-Business

The Information Communication Technology (ICT) industry is evolving at the speed of electricity. Data centres are springing up while cloud technology has taken the centre stage in cost reduction strategies of businesses. The Managing Director, Rack Centre, a leading data centre in Africa, Mr Tunde Coker, says the firm has the capacity to host private and public data in-country. He speaks with LUCAS AJANAKU on various aspects of emerging technologies.

What is your assessment of the data centre business climate?

One of the things we have done is building to meet local needs while complying with the global standards. We have such environment that at times not too conducive for a data centre. The humidity around March period could be 90-95 per cent, sometimes 97 per cent. The temperature can be at 37 degree centigrade; that is very high. We are seemingly a power company because we generate our power. Of recent, we entered into discussions with Ikeja Electric for a dedicated line. We are working with them as engineers, not a hook and switch-on sort of, because we need industrial power. We are creating Power Utilisation Effectiveness (PUE) in West Africa. We have built something that is conducive to the Nigerian environment.

How has the recession affected business in this sector?

We saw a slow down last year, just like every other company. No doubt, we will continue to grow, but it wasn’t at the level we expected. It only required circumspective actions in spending; in the contest of the shift in the economy. However, we are tuning into the easy of doing business through our facility. The government is doing a lot too which in the areas of on e-Government and e-Governance. There are efforts to lead us up the lid by end, latest end of the year, which speaks volumes to the international community. So, strategically, for us and what we have seen in government, things will shift in the right direction. However, companies have realised they have to invest in growing at the right point in time. Instead of deploying resources to build a data centre, you could co-locate in a standard facility. Then, you can focus on the growth of your business.There are things we say about small and medium enterprises (SMEs); there are 20 million of them. They are going to power the economy. Twenty million SMEs exceed the population of Belgium- adult, children, young people put together. What we are bringing to Nigeria through Cloud-On-Ground is a high quality environment that accords these small businesses the opportunity to lower the threshold on the entry point to technology as means to break even in their businesses; even with small financial capacity. You pay as you grow/pay as you go. What we have built is key to the automation of SMEs and will impact the economy.

What is this TCCF talked about in in data centre?

TCCF stands for Tier Certification for Constructed Facility (TCCF), especially to Tier III data centre we have here. The analogy to explain TCCF is: if you have a design of an aircraft validated to be able to fly front ‘A’ to ‘B’, of course, it gives you comfort to know that aircraft is actually built according to such design. It’s after the design that the constructed certificate is issues to you. An assessment is required to obtain the certification. TCCF serves as validation that your fundamental is built as designed to be able deliver 99.99 per cent of uptime.However, since launch, Rack Centre has operated 100 per cent uptime, because we operated as a Tier III facility, constructed as designed. What does it mean? Now, if you are to board an aircraft, it is a constructed facility to a certain standard. If you are entering a house, it will be very reassuring that its construction is based on designed certification; the stamped architectural design. Therefore, the air conditioner won’t suddenly catch fire, the roof won’t leak. To further explain the analogy: if you now have your house been inspected; to be certified-constructed to a minimum standard of such facility- electricity availability, cooling system, water availability, water heaters work to certain degree/temperature, so, the process would require they will unplug the socket to verify the connectivity, the back-up system, ensure no current leak between one and the other. They may even require you pull out one of the walls to confirm the electricity diagram aligns with the design. That is the level of the details of assessment we went through. The other thing is, in translating design to constructed; though we have moved on as far as specifications are concerned, they make sure you are in tune with the current specification. If you fail to respond on that, it is an issue. We managed to respond to all the observations, because the fact you constructed to Tier III implies you can respond to questions around it.

What does this mean to Rack Centre?

First, authenticity is important to us at Rack Centre. We want to always do what we say and say what we do; do things right through the right means. So, having TCCF for Tier III has confirmed how eligible this facility is to perform the functions we allude to. There is no smoke screens, such as ‘oh, we are Tier III’ data centre, but all ends at design; some even cut corners and some sorts. These guys will actually find you out when you go ahead to construct your data centre-cutting corners. They are so detailed- a forensic analysis of the facility. Secondly, it fully demonstrated to our customers, indisputably, we are at that level of quality. Thirdly, I shared this thought in South Africa recently, ‘Africanism’. This is a data centre in Africa that says it is Tier III. Now, it has global profile, but is it the profile that we just go by? We can beat our chest and say this Tier III certificated facility in Nigeria meets the standard in any part of the world as certified by highly distinguished body- Uptime Institute. So, our customers know they are coming to high quality facility. Secondly, the world is changing: we keep talking about Big Data. If you look at the number of Facebook, Google, LinkedIn, Twitter, Amazon users, (in Nigeria) and so on, it is significantly growing. It gives international players- banks and other companies that serve African market, such comfort that the footprint/facility they are going to in Africa, is certified. To Nigeria, there are a lot of data hosted abroad including government data. Historically, when there was no Rack Centre, what would you do? You host abroad. I believe that if a Nigerian facility is not built from scratch to meet standards and we go ahead to legislate that everybody should use it, we are just entrenching mediocrity. So, we have to make sure the infrastructure is on ground and as good as what is obtainable anywhere in the world. Competitive on pricing: international players come here and they couldn’t argue with us on pricing. Therefore, with Rack Centre here, there is no real reason people should go abroad. If you are still hosting abroad you have to transverse through the connectivity to someone else’s space and you will have issues around latency. But, if you are here, the services are totally seamless. We now host cloud services in Nigeria via cloud-on-ground sub-brand. It’s a heterogeneous marketplace, a cloud exchange with different cloud providers available. So, with TCCF these providers are at rest with the quality of the facility to deliver their services within Africa to Africans. Why are we excited about this? Rack Centre is the most connected Tier III data centre in Africa; constructed facility. We have all the telecos and most of the carriers of note and ISPs. This allows our customers have universal connectivity. We also have other wholesale carriers even that deliver services across Africa. If you a hosting company, Bank, then, host your services here for low latency while connecting to your offices in other African countries, at the highest quality. So, these are some of the edges the certification has accorded us. We have won several global awards, but I oftentimes tell my team this is not just about Rack Centre rather it points to the world to recognise we got the capabilities here. it is also the fact Nigerians can deliver and operate this kind of facility.

Why the time lag between  design and facility construction?

Actually, you are not mandated to have facility on ground to have your design certified to Tier III. So, it is good to know what Tier III is before design. It’s like an architectural design. You have a choice once you have done the design to certify it immediately. In our case, we had a design and built it to that design. But then, we doubled the capacity from 119 to 255 racks. In that we decided to start the process of the whole series of test before construction. Then, you invite them over to conduct the certification. We doubled our capacity which went live during the middle of last year. With that, we were the first to also successfully revalidate our design which was done last July. There was never a second of downtime when we carried out the extension. It came to budget, quality, time, and no hiccup with any customer. We won an award in capacity Africa for this very project, compared to other data centre projects in Africa, including South Africa, Northern Africa. Right now, in the Data Centre Global awards, we are the only African country (finalist) in Technology Expansion. We focused on that piece of work to get it right. So, after we were done, we put Uptime Institute on notice. I was talking to an international analyst who said: “If you get the certification, the experience globally is that you earned it.” Also, there is a notification that goes with design certification, informing you that after two years, the certificate will be withdrawn if you fail to construct. Now, for constructed facility, they will come around yearly for inspection and if you fail to keep the standard they will keep you on notice of subsequent withdrawal. We, certainly, do not intend to be in that place. That is also great for our customers as global companies are looking at us, even while we deliver services to local businesses.

Why have other African data centres not get Uptime Institute Certification?

Tier III data centre is like detailed aircraft certification. You to have investment, not cutting corners in your processes, as that will push you to a tight corner. Procrastination is also not helpful when it comes to this kind of business. There a whole lot of reasons why companies are not ready to go for the certification. Anybody can say, ‘I am built to Tier III standard,’ but the certification is very important. It’s like boarding a car driven by someone with driver’s license and the other without. He might be perfect driver, but without the license, even the law will be against you. The licence gives you more confidence in the person, as it is very rare to have someone with a license and unable to drive- he has gone through learning process and tests.

Does this align with  local content?

First, in terms of investment, the facility is sited in Nigeria. We have sophisticated facilities because we want to attract international investors to the country. All our technical staff are Nigerians. There are parts of the technology we had to source experts from the United States, South Africa, but we always make sure there is technical-knowledge transfer as means to build our capabilities. We are determined to recruit the highest indigenous talents and build them through. During the project expansion, our team was at the UK; the institute they visited sent me an email hailing these guys diligence, insights, creativity and innovations that the counterparts in developed economies couldn’t demonstrate. Now, as we have built to internationally acclaimed standards, it implies we can attract more companies to host their services in Africa. By doing so, we are exporting Nigeria’s services to other players. It is a point of export that will not only discourage our people heading abroad to host, but will boost our forex. If that happens, our facilities get full, we are sure to extend it. Research has shown that for every million dollar you put in, you could get between $10million and $100million impact on the gross dmoestic product (GDP) and all through the process, local capabilities are being developed. With cloud-on-ground, we can deliver services at the right price and at higher performance.

After a brief lull, a combination of technical and non-technical factors, has led to a steep rise in mobile internet usage country. Lucas Ajanaku reports massive infrastructure roll-out as recession eases may sustain the tempo.

Improved national network coverage by Mobile Network Operators (MNOs) and migration of various networks from 3G  to Long Term Evolution (LTE) may have accounted for the rise in Active Mobile Internet Subscriptions (AMI).

Although the number of subscribers to the internet dipped marginally from 91.5million to about 90million, there was an increase in Internet Usage Subscriptions (IUS).

The industry witnessed a continuous increase in internet usage measured in terabyte (TB).  According to sources, the Nigerian Communications Commission (MCC) began  the cumulative collection of internet usage statistics of all mobile operators in February this year to further understand the performance and behaviour of the active mobile internet segment.

From the analysis, February recorded 22,019.66TB, March 30,627.40TB, and April 31,160.00TB reflecting 41.5 per cent usage increase between February and April, 2017.

NCC’s studies showed that this trend is likely to continue as more operators are licensed in the Broadband segment to provide wholesale broadband internet services nationwide.

Besides, the network operators have intensified efforts to improve on their network coverage.

Although AMI is on the increase, the Active Voice Subscription (AVS) dropped marginally from 155.1million to 149.3million in the first quarter of this year.

The NCC studies also showed that a range of reasons were given for this decline by the operators.

Part of their reason is their churning activities and the Commission’s directive to deactivate all unregistered Subscriber Identification Module (SIM) cards that exist in all the networks.

Other findings include festive period such as Christmas where people especially those who relocate from urban centres to the semi-urban and rural areas but drop such SIM cards after the festivals.

There are seasonal trends when travelers drop their SIMs at the end of vacation and another reason is the deactivation of inactive SIM cards that were previously triggered by bulk Short Message Service (SMS).

In general terms, the NCC studies indicate that as nationwide coverage increases, many subscribers did not see the need to have multiple SIM cards and therefore elected to drop their second line and kept one. This trend may continue especially due to the dramatic increase in data usage.

The industry regulator explains that the Policy Competition and Economic Analysis (PCEA) Department amongst other functions monitors the performance of the telecoms industry as well as identify gaps that may require regulatory intervention.  These, according to the Commission, are achieved through collection, collation and analysing network/subscriber data.

NCC explained that in the month of April, all the four major GSM providers recorded losses in AVS.

Specifically, MTN lost over 2.2million subscribers; Etisalat lost 576,120 subscribers; Airtel lost 319,803 and Globacom lost 58,277 subscribers.

The report further showed that between December 2016 and March 2017, the operators maintained a steady decline of an average 2.64 per cent subscription loss.

Specifically, Etisalat lost a cumulative 1.412million and MTN dipped by 1.211million but what they lost in voice, they made significant gains in data usage.

Meanwhile, other reasons given by operators for the fall are that consumer spending behavioural pattern of possessing dual SIM devices may have changed as a result of economic recession and the directive handed the operators by NCC that they should implement/deactivate auto renewal of data plan/bundle services.

Responding to some of these cited cases, PCEA agreed that there is a nexus between number of SIM churned out and active subscriptions for both voice and internet.

PCEA did observe that average family income is competing with basic needs and inflation rate may have compelled families to priortise expenses.

Already, the International Telecommunications Union (ITU) has identified that there is a strong link between disposa income and affordability of Internet services.

“The recent releases of the Consumer Price Index report by the National Bureau of Statistics (NBS) indicate inflationary costs are more on the basic household needs. Hence, cost of communications/telecoms services will naturally compete with basic household needs and consumers spending behavioural pattern” the report noted.

The restructuring direction and sustenance roadmap adopted following extensive engagements with key parties by Etisalat’s top management team raises hope for various stakeholder’s interest, including that of its over 20 million subscribers, employees, trade partners and the economy, write LUCAS AJANAKU and TOLULOPE LAWANI.

The battle for the soul of Etisalat Nigeria assumed a turning point last week with the immediate resignation of its chairman, Hakeem Bello-Osagie from the telco.

A statement confirmed the development, saying the decision followed “the approval of a restructuring plan for the telecommunications firm” midwifed by Bello-Osagie.

A former chairman, United Bank for Africa (UBA), he was the only surviving shareholder in the telco which has a $1.2 billion (about N377.4 billion) loan repayment crisis with a consortium of 13 local lenders.

He was the promoter of Emerging Markets Telecommunications Services (EMTS) which controlled 15 per cent of the equity holding of the company

His resignation followed the withdrawal, two weeks ago, of the company’s major shareholder, Emirates Telecommunications Group Company, which announced the decision to quit effective June 15, 2017.

Six Mubadala and Etisalat Group-appointed Non-executive Directors (NeDs), from the United Arab Emirates (UAE), had resigned, following Emirates Telecoms Group Company’s (Etisalat Group) reporting disclosure on the Abu Dhabi Stock Exchange that it was transferring 45 per cent of  its stake and 25 per cent of its preference shares in its Nigerian subsidiary to United Capital Trustees Limited, the legal representative of the lending banks.

The telco explained that it has struggled to substantially pay up the loan but blamed negative macro-economic indices occasioned by naira devaluation and a raft of government policies that had led to high mortality rate for industries.

Chairman, Association of Licensed Telecoms Companies of Nigeria (ALTON), the umbrella body of all the telcos, Gbenga Adebayo, said the country is one of the fastest growing telecoms market in Africa.

He however lamented that government’s policies were not helping the health of the industry.

Gbenga who spoke in Lagos, said: “It is therefore a matter of great concern the current state of health of our industry, with the devaluation in the value of our currency, to lack of access to foreign exchange (forex) to the issue of data floor price.”

Etisalat had, in a statement, explained: “Etisalat has repaid 42 per cent of the debt owed Nigerian banks and (it) is not owing the humongous $1.2billion being reported in the media.

“We can categorically state that the outstanding loan sum to the consortium (of banks) stands at $227million and N113billion, a total of about $574million if the naira portion is converted to US Dollars. This, in essence, means almost half of the original loan of $1.2billion, has been repaid.”

Subscribers have urged the telco and its lenders to come to the table and settle the matter amicably instead of engaging in media war.

President, National Association of Telecoms Subscribers (NATCOMS), Chief Deolu Ogunbanjo, said he was disturbed when Mubadala pulled out of the deal because Etisalat has raised the bar in competition as well as in innovative products offering.

He commended Bello-Osagie for pulling out, adding that it was in line with international best practices and in the interest of the stakeholders.

A subscriber, Taiwo Owoeye, who is based in Akure, Ondo State capital, said she has been using Etisalat line over the past five years and have never had any reason to drop the line.

“Though it was the last to start operation in the country, it has shown resilience in terms of network availability and integrity.

“I have been  following developments on the loan issue. Lending and borrowing are two indispensable adjuncts of modern economy. It is unfortunate that the issue has been blown open; what has happened to the telco is happening to other business entities in the country because the economic recession didn’t just start one day; it started and only assumed a frightening dimension two years ago,” she said.

She is of the view that Etisalat has given a great account of itself as the fourth largest telco with millions of subscribers and should be accorded every necessary support along the pathway to sail out of the troubled waters.

A telecoms analyst, Tolu Ogunbiyi, said: “It is in the best interest of all parties particularly the struggling Nigerian economy that investors are not scared away and employees are not offloaded to the already overwhelmed unemployment band. The manner with which Etisalat has handled the very challenging situation was commendable and raises hope for a considerable ending.

According to Ogunbiyi  “We have a tough situation at hand but we should also commend how this issue was handled by a calm businessman who in the face of huge challenges was undaunted and exited only when a plan for the future was  solidified.”

With Bello-Osagie’s resignation,  the new board is expected to assume control of Etisalat and should hit the ground running with some plans jointly agreed by stakeholders.