The Nation Newspaper

Category: e-Business

  • Computer Society frets over govt’s move on agencies

    The Nigeria Computer Society (NCS) has enjoined the Minister of Communications, Mr Adebayo Shittu, to prevail on the Federal Government to jettison the idea of moving some federal agencies under the Ministry of Communications to the Ministry of Science and Technology.

    Specifically, the society and other stakeholders in the industry kicked against the request by the Science and Technology Ministry asking the Federal Government to bring the National Information Technology Development Agency (NITDA), Galaxy Backbone and the Nigerian Communication Satellite (NigComSat) under its supervision.

    The body said the request was not only self-serving but counter-productive as it would reverse all the gains already recorded over the years in the Information Communications Technology (ICT) sector.

    NCS President, Prof Sola Aderounmu made the appeal when he led other stakeholders on a courtesy call on the Minister of Communications in Abuja.

    Prof Aderounmu, who led the team which included the Executive Secretary of Nigeria Computer Society and two former presidents of the Society as well as other professional groups in the industry, expressed dismay over attempts to remove some agencies from Ministry of Communications to Ministry of Science and Technology.

    He said promoters of the move do not have the interest of the country at heart, pointing out that the Science and Technology Ministry had about 17 agencies under it, yet it was seeking to take three out of the five agencies under the Ministry of Communications.

    Prof Aderounmu recalled that in 2011, the Federal Government agreed with the Nigeria Computer Society to retain NigComSat, NITDA and Galaxy Backbone under the Federal Ministry of Communications for sustained development and actualisation of ICT objectives towards diversifying Nigeria’s economy.

    He argued that relocating the three agencies to the Federal Ministry of Science and Technology would get the nation about 15 years behind our development plan. He advocated for the retention of the NITDA, NigComSat, and Galaxy Backbone for better performance, networking, coordination, cooperation and collaboration in other to produce better input.

    The Nigeria Computer Society boss also called on the Federal Government to properly fund the Ministry of Communications and amend the laws governing the Agencies and the ministry accordingly.

    He noted that with over 20,000 membership strength of the society drawn from professionals, stakeholders and interest groups in Nigeria, the body would not rest in its oars and allow gains recorded in the sector to be reverse suddenly by such moves.

    In his remarks, the minister lauded the society and the team for their patriotic contributions, saying that the emphasis for now is to consolidate the gains already made by the ministry and its agencies towards diversifying the Nigerian economy.

    The minister called for calm and appealled to all stakeholders on the need to show understanding with the government for the overall development of ICT sector,  insisting that no counter–productive adventures should be undertaken in the industry as it would be against the standard practice the world over.

  • Uncertainty as CPN’s leadership crisis deepens

    And may not have come to the leadership crisis rocking the Computer Professionals Registration Council of Nigeria (CPN) as the council has not met since the alleged forceful imposition of Mr Allwell Achumba as its Registrar/Secretary to Council last year.

    Its President/Chairman of Council, Prof. Vincent Asor, had allegedly mobilised armed policemen  to the Ikoyi, Lagos office of the computer group to install the Registrar/Secretary to Council.

    CPN is the government agency responsible for registration of computer professionals and regulating computer technology practices in the country.

    A source at CPN said Prof Asor had written a letter to the Minister of Education, Mallam Adamu Adamu, making case for Achumba who allegedly falsified his age to remain the substantive Registrar of the CPN despite the groundswell of opposition from within the Council members.

    The source lamented that the absence of the Executive Secretary, National Board for Technical Education (NBTC) in the Council has created a lacuna which Prof Asor has been taking advantage of to ride rough shod on the council.

    According to the source, the 1993 law that established CPN stated clearly that the NBTE chief must be a member of council to give policy directives to the group, adding that the unavailability of the NBTE chief has given opportunity to Prof Asor to usurp the functions.

    In his reaction, Achumba said: “It is the handiwork of detractors who do not want CPN to move on but I am determined to make a change. These are all lies to whip (up) sentiments amd deny merit a chance. I am the substantive Registrar and Secretary to Council effective November 14 (last year).

    President Muhammadu Buhari had terminated the appointment of 17 chief executives of agencies, parastatals and departments (MDAs) in the Federal Ministry of Education, and immediately replaced them with new appointees which included CPN.

    Since Registrar/Secretary to the Council, Mr. Sikiru Shehu left, Mr. Idowu Olusile had been its acting Registrar, and was the administrative head of the body, because the agency is not controlled by chief executive, according to the 1993 ACT establishing it.

    Mr. Afolabi Aderinto was subsequently appointed as the new head of CPN, a development that was faulted by the Chairman, Compliance and Enforcement at CPN, Mr. Rogba Adeoye.

    The government withdrew the appointment after which an advert was placed in the newspaper announcing the vacancy for the position. About 15 people applied while only four was shortlisted for interview. Jide Awe and Mr Achunba were favourably disposed for the job by Council but while the former was 54 years old, the latter was alleged to be 64 years, above retirement age for civil servants.

  • Increasing sophistication in cyber espionage

    Increasing sophistication in cyber espionage

    The diplomatic row between the United States (US) and Russia over alleged hacking of the server of the Democratic National Committee (DNC) by Russian agents to give President-elect Donal Trump an edge over her closest rival, Mrs Hillary Clinton at the last presidential election, has brought to fore the need for the Federal Government to do more to secure the nation’s cyber territory, reports LUCAS AJANAKU.

    The United States (US) is arguably the most powerful country in the world both in military and technology warfare. But the myth of the American prowess was tested by its long time cold war rival, Russia, during the last presidential election in the country.

    There were allegations that the Democratic National Committee (DNC) server was hacked in a well-orchestrated cyber espionage targeted at the world’s greatest democracy. Information were allegedly stolen and passed to WikiLeaks founder, Julian Assange to influence the outcome of the election.

    Like the Pearl Harbour base strike by the Imperial Japanese Navy Air Service in the morning of December 7, 1941 during World War 11, America has responded by expelling no fewer than 35 Russian diplomats.  Other measures have also been taken while Kremlin has consistently maintained that it did no wrongs.

    The bigger picture of this development, analysts say, is that cyber threats are real and something urgent must be done in the country to prevent and mitigate the consequences of attack should there be one.

    Worried by the development, a cybersecurity awareness campaign-Stop.Think.Connect forum was convoked in Lagos by the American Embassy in Lagos.

    Speaking on Recognising and Combating Cyber Crime, President, Cyber Security Experts Association of Nigeria (CSEAN), Remi Afon, said cybercrime has now surpassed illegal drug trafficking as a criminal money-maker, according to Symantec, an online security platform. He added that somebody’s identity is stolen every three seconds as a result of cybercrime.

    According to Verizon, 89 per cent of breaches had a financial or espionage motive while Forbes has projected that cybercrime costs would reach some $2 Trillion by 2019. Its damages are also expected to cost the world $6 trillion by 2021, according to Cybersecurity Ventures

    In Nigeria, there are different figures from different government agencies. While the Nigerian Communications Commission (NCC) said there are over 97 million, the Office of the Attorney-General of the Federation estimated that between 2012 and 2014 Nigeria lost N64billion to cybercrimes. The Office of the National Security Adviser (ONSA) also estimated that N127 million is lost yearly to cyber criminals.

    Ultrascan, a leading-edge healthcare and security technology solutions, said cybercrimes originating from Nigeria costs the world a whopping $9.3 billion.

     

    Interventions

    One of the major steps taken by the Federal Government was the enactment of the Cybercrime Act of 2015. The bill was signed into law on May 15, 2015 by former President Goodluck Jonathan. Though the law has not passed through any popular litmus test in the nation’s judiciary, analysts say it is a good thing that the law has been passed.

    Before the passage of the Act, there was a National Cybersecurity Policy & National Cybersecurity Strategy in February 5, same year.

    A 31-member Cybercrime Advisory Council was inaugurated on April 20, last year by the National Security Adviser (NSA), Maj-Gen Babagana Monguno (rtd) who is the chairman of the Council.

    Speaking during the council inauguration, Monguno said: “The protection of activities in our cyberspace has become increasingly important to the security of our great nation. You will agree with me that activities of hackers and cyber criminals in recent times have threatened government presence, economic activities, security of Nigerians and vital infrastructure connected to the internet.

    “Experts have shown that the cost of cybercrime to the nation is quite significant. The 2014 annual report of the Nigeria Deposit Insurance Corporation ( NDIC) shows that between 2013 and 2014, fraud on e-payment platform of Nigeria’s banking sector increased by 183 per cent.

    “Also, a report published in 2014 by the Centre for Strategic and International Studies, United Kingdom (UK),  estimated the annual cost of cybercrime to Nigeria at about 0.08 per cent of our GDP, representing about N127 billion.”

    “Global tracking of cyber-attacks indicate that Nigeria is among countries with high cases of software piracy, intellectual property theft and malware attacks. This situation is a serious challenge to our resolve to take advantage of the enormous opportunities that the internet brings, while balancing and managing its associated risks.”

    Another step taken was the establishment of Computer Emergency Response Teams (CERRT.ng by NITDA & ngCert by NSA).

    NCC’s Chief Executive Officer (CEO), Prof Garba Danbatta said the regulator believed and supported the approach taken by the ONSA and urged all sector regulators to set up Computer Security Incidence Response Teams (CSIRTs) that will collaborate and work with the ngCERT in tackling cyber threats and vulnerabilities, thereby forming an effective and well-coordinated national CERT ecosystem. “It is in this line that the Commission is establishing a Cyber Security Incidence Response Team (CSIRT) exclusively for the telecoms sector. The sectorial CSIRT will complement the ngCERT by handling and coordinating cybersecurity incidences in the telecommunications sector. The NCC CSIRT, when established, will facilitate intervention, swift identification of threats/vulnerabilities and sharing of valuable information and resources to assist in fortifying the resilience of the national cybersecurity infrastructure,” he said.

     

    Threats, trends

     

    419, Phishing, social engineering, Spear Phishing CEO, malware, cyberbullying, identity theft and ransomware are the common trends.

     

    Attack trends

     

    According to CSEAN, 95 per cent of enterprise attacks are through email while 30 per cent recipients open messages.  Overall successful scams cost $3.1billion with phishing, accounting for 83 per cent.

    Successful attacks

    According to Hewlett Packard (HP), the top successful cyber attacks are  in compromised accounts, which stands at 63 per cent; web based attacks-54 per cent;  client side attacks-43 per cent; while the average cost of cybercrime stood at $7.7million.

    According to HP, it takes 146 days before successful breach is detected while 84 per cent of breaches are against the application layer.

    Way forward

     

    Teledon Group CEO, Dr Emmanuel Ekuwem, said the Federal Government should appoint a chief of cyber security for the nation to coordinate activities to secure the country’s cyber territorial integrity.

    He said the government should create an office such as there is in the army, air force and navy to take of the country’s security. He warned that any attack on the telecoms infrastructure in the country would have a devastating effect on the economy.

    Consumers are advised to use anti-virus software; use strong passwords and change passwords frequently.

    Security experts are also advised to keep the operating system & applications up-to-date; use multi-factor authentication; and use a password manager.

     

    For organisations

     

    A security platform, Sophos, offered six measures organisations should put in place to help keep more complex threats at bay.

    Moving from layered to integrated security:  Many organisations now possess multiple solutions that were once best-in-breed but are now too costly and difficult to manage. Moving towards integrated solutions where all components communicate and work together will help to solve this. For example, if malware knocks an endpoint’s security software offline, network security should automatically quarantine that device, reducing the risk to your entire environment.

    Deploying next-generation endpoint protection:  As ransomware becomes ubiquitous and endpoints grow more diverse, organizations must refocus on endpoint protection. But signature-based solutions are no longer enough on their own, and can miss zero-day attacks. Choose solutions that recognise and prevent the techniques and behaviors used in nearly all exploits.

    Prioritising risk-based security: No organisation possesses the resources to systematically protect everything, and 100 per cent prevention is no longer realistic. Clarify the risks associated with each system, and focus your efforts accordingly. Risks change fast: look for tools that track them dynamically, and respond accordingly. But make sure those tools are easy and practical enough to use.

    Automating the basics: You can’t afford to waste time running the same reports and performing the same security tasks you always have. Automate wherever it can be done simply and easily, so you can focus scarce resources on serious risks and high-value tasks.

    Building staff and process to deter and mitigate social attacks:  Since social attacks now predominate, educating users and involving them in prevention is now even more important. Focus education on the threats each group is likeliest to encounter. Make sure it’s up-to-date: outdated guidance on topics such as phishing can be counterproductive, offering a false sense of security.

  • Telcos seek access to forex, end to multiple taxation

    Nigeria’s carriers are seeking easier access to foreign exchange (forex) to expand infrastructure across the country and improve end user experience on the networks. They are also appealing to President Muhammadu Buhari to end the reign of multiple taxations and regulation that have inhibited the growth of the sector.

    The telcos, through their umbrella body, the Association of Telecoms Companies of Nigeria (ATCON), warned that more workers in the telecoms industry may be axed if the issues and other obnoxious policies are not addressed.

    In an email, its President, Olusola Teniola, said: “Our members seek easier access to USD$ and the removal of multiple taxes in order to further grow the sector and its contribution to the economy going forward.

    “Any recovery in Nigeria will be slow and difficult, especially with uncertainty in the value of naira to the USD$. Threats to capital expenditure remain very high and even with the amount budgeted to stimulate infrastructure development, Government still needs to address the imbalances in the need for fiscal increases to support government spending and Foreign Direct Investment (FDI) required to continue to develop much needed infrastructure in ICT, which will remain predominately foreign dependent for the next three years at least.”

    Speaking when he led the association’s Executive Council on a working visit to the General Manager, Lagos State Infrastructure Maintenance and Regulatory Authority (LASIMIRA), Babajide Odekunle, in Lagos, Teniola lamented that revenues from voice calls have declined sharply while data that was supposed to have provided alternative revenue stream is being challenged by a myriad of factors, including operating cost.

    He lamented that the free fall in the value of the naira against the dollar has ensured that roll-out of new base transmission station (BTS) and expansion of existing capacity remained impossible.

  • MTN eyes DStv competitor online

    •DStv: why viewers can’t choose channels

    MTN is trying to turn itself into a quadruple-play Television service with products such as VU, its Chief Consumer Officer in South Africa, Larry Annetts, has said.

    VU used to be MTN FrontRow, a one-stop-entertainment portal where subscribers could VU their favourite movies and series.

    Annetts said by venturing into this, the telco will have to deal with net neutrality issues.

    The issue of zero-rating as a net neutrality concern reared its head recently when AT&T zero-rated data for its DirecTV Now service.

    This means customers’ AT&T data used to stream from DirecTV Now is essentially free.

    This follows AT&T acquiring DirecTV in July 2015 and subsequently launching the DirecTV Now subscription streaming video service.

    MTN zero-rates its subscription VOD service VU in the same way.

    The zero-rated data decision was met with dire warnings from media outlets like The Verge.

    “AT&T just declared war on an open Internet,” it said.

    Turn the Internet into basic cable, charge for features and content, then charge competitors to compete with their own vertically-integrated video services, stated The Verge.

    MTN said a bundled telephony, broadband, and video entertainment operator is the kind of company it is trying to turn into.

    However, the debate around zero-rating and net neutrality is not clear-cut, Annetts told MyBroadband.

    “Net neutrality and MTN’s zero-rating of VU services are two separate things. MTN’s decision to zero-rate VU should be understood as part of MTN facilitating access to the service for our customers and as part of our marketing strategy,” he said.

    Annetts said the zero-rating meant customers will only incur the costs of subscribing to or renting content.

    “This is our unique proposition and it is one way of making our customers lives a whole lot brighter,” Annetts said, adding that the decision to zero-rate or bundle a service is not a simple one. “It is entirely dependent on the company’s marketing strategy,” he explained.

    Meanwhile, the pan African pay Tv service provider has said the nature of a broadcast service makes it incredibly difficult to let subscribers choose their own channels.

    MultiChoice’s Group General Manager, Broadcast Technology, Nyiko Shiburi, said the technology is built to place channels into a relatively small number of groups.

    He said if the subscriber is allowed to become their own group, this would place more strain on the system than the bandwidth offered by DStv’s satellites could handle.

    For anti-piracy reasons, which are driven by Hollywood studios, DStv constantly has to cycle encryption keys through its decoders.

    “That’s why you sometimes see an error message when you switch on a decoder for the first time when it’s been off for a while,” Shiburi said, adding that if content encryption keys are generated for each individual subscriber, this would cause a massive amount of signalling traffic.

    It could take days for a new subscriber to be activated if such individual channel selection were allowed, MultiChoice said.

    Even if the technical challenges are overcome, the larger obstacle to allowing subscribers choose their channels is pricing.

    To explain the model, Shiburi compared it to a gym. “You can’t just pay for the treadmill,” he said.

    “Capital expenditure costs are high, so you have to package things in such a way that they become affordable to as many people as possible,” he added.

    On whether it would be possible for DStv to alter its package structure to look more like some overseas satellite pay-TV services, he said the number of channels groups are roughly the same, but some of them split their premium sport and entertainment channels – which may then be bolted onto cheaper packages.

    MultiChoice has warned on several occasions that making such significant changes to its package structure will come with consequences to pricing.

    Not all channels cost the same and some licensing costs decrease as the number of potential viewers increase, due to being able to offset content costs with advertising.

    “We know that our subscribers want the flexibility of choosing their own channels. However, by packaging channels in the way we do into predetermined bouquets, we make the services more affordable for more of our customers.

    “We are always improving choice and flexibility by improving our on-demand services that is why we are looking at how we can further address that desire on various online platforms,” Dstv said.

  • Year of great expectations, challenges

    Year of great expectations, challenges

    This year promises to be an exciting year in the information communications technology (ICT) sector of the economy with a bunch of new and exciting technology devices . While some of these devices are completely new, there are already clear trends that will pose challenges to incumbents, reports LUCAS AJANAKU.

    The economic recession that took toll on the econmy last year may not end very quickly this year. The rise of disruptive technologies, government fiscal and monetary policies will continue to challenge the industry. Some of the issues that will define the year include:

     

    Analogue switch off

     

    Nigeria having failed twice in 2012 and 2015 to migrate from analogue to digital broadcasting, President Muhammadu Buhari has stated the commitment of his administration to meeting the June 2017 deadline.

    President Buhari made the promise during the Abuja launch of Digital Switch Over (DSO) in the city. Represented by Vice President Prof. Yemi Osinbajo, he said the Federal Government was also determined to ensure a seamless roll-out of the DSO in all the states of the federation because of its multiplier effect on the economy.

    He said it would create jobs in the area of content and software development, provide the platform for film producers and musicians to release their productions directly to households, and substantially cut off piracy.

    Buhari said local industries were already experiencing a boost from the new opportunity in digital economy, with several indigenous firms now manufacturing set-top-boxes.

    He said: “Technology is transforming our lives and livelihoods daily in new and more dramatic ways. But perhaps more important are the doors opened by digital transition.

    “The successful launch of the pilot scheme in Jos in April has clearly demonstrated the gains of DSO.

    “Let me restate for emphasis that this government is irreversibly committed to meeting the June 2017 deadline for the switchover in the West African sub-region and also to the roll-out of the DSO in all the states of the federation.

    “The significance of the DSO cannot be lost on the world as the digital switchover becomes a reality in the capital city of Africa’s largest economy and most populous nation.

    “I am confident that DSO would liberalise access to digital broadcasting and increase the versatility of media information, interactive programming, two-way data exchanges, mobile reception of video, internet and multimedia data will open up.

    “The opportunities that this will provide are only limited by imagination. Advertising, formal education, sales and marketing are obvious low hanging fruits.

    “Nigerian artistes and entrepreneurs in music, entertainment and film making will be important pillars in our diversification plans.”

    President Buhari, however, appealed to all states and local governments to be actively involved in the project because of the obvious advantages to the people and the economy.

    He praised  the NBC, Pinnacle Communications and Messerschmitt SMK for their performance on the switchover project.

     

    2.6GHz spectrum sale

     

    Having failed to attract impressive particpation in the auction  of the 2.6gigahertz (GHz) spectrum, the Nigerian Communications Commission (NCC) said it had carried  out a post-motem on why the exercise ended the way it did.

    Only MTN participated and won six slots.

    Director, Spectrum Administration, Mr. Nwaulume Augustine, said 14 slots were open for interested, bidders, adding that each slot will be on offer at $16million each, thus bringing the gross total to $224million (about N44.6billion).

    He said NCC offered the spectrum on a technology neutral basis, adding that it could be used to provide any telecoms services.

     

    Cyber security

     

    According to Sophos, a security software and hardware firm, last year saw a huge number and variety of cyber attacks, ranging from a high-profile Distributed Denial of Service (DDoS) using hijacked internet-facing security cameras. There was a rise in data breaches.

     

    Current, emerging attack trends

     

    Sophos said DDoS IoT attacks will rise. Mirai, (Japanese word meaning-the future), a malware that turns computer systems running Linux into remotely controlled bots that can be used as part of a botnet in large-scale network attacks, showed potential of DDoS attacks as a result of insecure consumer IoT devices. Mirai’s attacks exploited only a small number of devices and vulnerabilities and used basic password guessing techniques. However, cybercriminals will find it easy to extend their reach because there are so many IoT devices containing outdated code based on poorly-maintained operating systems and apps with well-known vulnerabilities. Therefore, expect IoT exploits, better password guessing and more compromised IoT devices being used for DDoS or perhaps to target other devices in your network.

     

    Targeted social attacks

     

    Cyber criminals are getting better at exploiting the ultimate vulnerability – humans. Ever more sophisticated and convincing targeted attacks seek to coax users into compromising themselves. For example, it’s common to see an email that addresses the recipient by name and claims they have an outstanding debt the sender has been authorised to collect. Shock, awe or pretending to be law enforcement are common and effective tactics. The email directs them to a malicious link that users are panicked into clicking on, opening them up to attack. Such phishing attacks can no longer be recognised by obvious mistakes.

     

    Financial infrastructure risks attack

     

    The use of targeted phishing and whaling continues to grow. These attacks use detailed information about company executives to trick employees into paying fraudsters or compromising accounts. Sophos expects more attacks on critical financial infrastructure, such as the attack involving SWIFT-connected institutions which cost the Bangladesh Central Bank $81 million in February. SWIFT recently admitted that there have been other such attacks and it expects to see more, stating in a leaked letter to client banks: “The threat is very persistent, adaptive and sophisticated – and it is here to stay”.

     

    Hope for digitally excluded

    The NCC has assured that provisions have been made in its 2017 budget to extend telecoms services to additional 40 million people across the country hitherto ‘disenfranchised’ from the telecoms revolution.

    Prof. Dambatta gave the assurance during a one-day workshop organised by NCC for law enforcement agencies on telecoms issues at Lagos Sheraton Hotel and Towers, Ikeja.

    Dambatta said NCC had conducted a survey which identified about 200 communities nationwide with access gap.

    He said through the Universal Service Provision Fund (USPF) being managed by a department under NCC, 40 million people in these areas would be covered in 2017.

     

    Fibre optic cables

     

    Dambatta said empirical studies showed correlation between usage of ICT and social development.

    He said access to telecoms services has caused direct and indirect rise in employment generation across the sectors of the economy.

    According to him, NCC is determined to move fast in its mandate of harnessing the potential of the ICT sector to boost the economy.

    He explained that the industry contributions to the national Gross Domestic Products (GDP) is about 10 per cent, adding that the NCC was committed to seeing greater development in the sector because of the mechanism put in place to implement the National Broadband Plan.

    He said: “In this respect, two infrastructure companies have been licensed while the remaining five companies will be licensed shortly to commence the deployment of more broadband fibre network beyond the major cities in the country. Our model, anchored on robust development of infrastructure, transmission and retail segment, is expected to speed up the cascading of networks of fibre required by individuals and businesses to improve life and catalyse economic growth.”

     

    Virtual reality dominance

     

    The three big virtual reality (VR) headsets are out, but it’s only this year that they will truly get the chance to thrive.

    This year will see developers and manufacturers get a feel of what the market wants, and by the end of the year, we should see the first must-have VR titles.

    The year may also witness new and cheaper players in the game and a refinement of the Google Cardboard technology.

      IoT

     

    Internet of Things (IoT) has become a bit of an over-used word in the tech circle, but it’s clear the technology may not go anywhere.

    While there is still relatively limited use in having smartphone talk to toaster, the promise is definitely there.

    The year will see more IoT devices reach consumers and more practical uses uncovered.

     

    Going mobile

     

    Currently four out of five people use their phones to shop, according to Forbes.

    That should say just how mobile the world is becoming, as more and more people rely on their smartphones over their laptops and PCs.

     

    Threat of OTT, inflation, forex

     

    Firms not licensed by the Federal Government to provide telecoms services but provide over-the-top (OTT) services will continue to be a major threat to telcos’ revenues.

    OTT services include instant messaging, voice over internet protocol (VoIP) calls, and others.

    Firms famous for these are social media platforms such as Facebook, WhatsApp, IMO, Google+,  LinkedIn and about 35 others.

    MTN CEO, Ferdi Moolman, told the Senate that the telco was committed its efforts to provide the best data network to Nigerians.

    “There are a number of factors that impact the sector’s sustainability such as the rise of headline inflation to about 17.9 per cent; the depletion of operator revenues by unlicensed providers of OTT telecoms services who do not have any physical presence; nor pay any taxes; nor make any significant contribution to employment or other socio-economic objectives of government in Nigeria; inability of operators to access foreign exchange (this is particularly debilitating given that most of our inputs are sourced off-shore). This has very significantly increased both operating and capital expenses.

    Despite these macro-economic challenges, telecom tariffs have declined significantly (over 67 per cent between 2007 and 2016) and data prices are amongst the lowest on the continent.”

     

    Communication Service Tax

     

    The industry will await the outcome of the obnoxious Communication Service Tax (CST) Bill pending before the National Assembly.

    The CST Bill would require consumers of voice, data, short message service (SMS), multimedia service (MMS) and pay TV services to pay a nine per cent tax on the fees paid for the use of these services. This tax would be collected in addition to the five per cent Value Added Tax (VAT) that consumers already pay when they purchase devices and communication services, the 12 per cent import duties paid on ICT devices, and the 20 per cent tax levied on subscriber identity module (SIM) cards.

    The Association of Licensed Telecoms Operators of Nigeria (ALTON) Chairman, Chairman, Gbenga Adebayo said instead of overtaxing the already impoverished subscribers,  cutting down the cost of governance at all levels made sense.

  • Server spending dips to $2.6b

    Vendor revenues in Europe, Middle East and Africa (EMEA) server market fell 14.3 per cent from the year before to $2.6 billion, according to the latest IDC EMEA Server Tracker for the third quarter. The number of units shipped slipped 7.2 per cent to just over 500,000. Looking at the EMEA market in euros, reported revenues in the quarter declined 14.7 per cent.

    HPE continued to lead the market, though its market share slid to 36.5 per cent from 37.6 per cent and its revenues declined by 17 per cent. Dell remained in second place, raising its market share to 17 per cent from 16.4 per cent, though revenues fell 11.3 per cent. Lenovo nudged IBM out of its third position in the second quarter, though revenues declined 16.3 percent and its market share narrowed to 8.2 per cent from 8.4 per cent. In fourth place, IBM’s revenues went down 20 per cent while its market share went down to 7.7 per cent from 8.2 per cent. Cisco’s revenues fell by less one per cent, with its market share advancing to 7.9 per cent from 6.8 per cent.

    IDC said currency instability may continue to play a role in pound- and euro-denominated revenues, while the long-term impact of Brexit on Western European IT markets remains to be seen. The EMEA non-x86 market continued to decline compared with previous quarters, with vendor revenue down 23.4 percent to just over $314 million.

    By geographic region, large revenue declines across vendors in Western Europe were observed, driven by a number of factors, including political and economic uncertainty, seasonal tepid demand, and fewer large server deals. Ireland and the UK were the two worst performers over the quarter, partially due to the delay in major infrastructure shipments and partly due to ongoing uncertainly over the impact of Brexit on financial and security regulations. A big winner was Greece, one of the only countries in the region to record substantial positive revenue growth (+135 per cent), due to a large investment by a systems integrator.

  • Why telcos may shun spectrum auction

    If the economic recession affecting the country,  dearth of foreign exchange (forex), as well as falling value of the naira are not addressed, any attempt by the Nigerian Communications Commission (NCC) to auction spectrum may not attract responses, it has been gathered.

    According to industry sources, the Federal Government must act to stabilise the ever-depreciating value of the naira, fix the forex problem and restore international confidence in the economy.

    MTN, the only telco that bided at the auction, emerged winner of six slots in the 2.6 GHz frequency spectrum auctioned by the NCC late last year.

    The spectrum guarantees superior performance for wireless networks, especially fourth-generation (4G)/long-term evolution (LTE) services.

    Director, Spectrum Administration at the NCC, Autin Nwaulume, said a post-motem on the dismal performace has been carried out, adding that report has also been submitted to appropriate quarters.

    Speaking on the sideline of spectrum auction forum, Nwaulume said NCC would have wished the whole slots were bought by telcos, adding that the regulator was worried by the development.

    He said the report submitted showed that the state of the economy was topmost, adding that the average revenue per user (ARPU) on data services was also low and a disincentive to acquring slots in the frequency.

    He said the rollout obligation attached to the spectrum by the regulator was also discovered to be too high while the forex problem didn’t help matters.

    According to the DSA, the reserved price for the spectrum was also considered to be too high by prospective buyers. The requirement of taking a minimum of 10 megahertz (MHz) was also high as some were willing to have something less.

    The NCC had on May 20,, last year, stated that since there was only “one qualified bidder”, that wanted six slots out of the 14 available for sale on the 2.6GHz spectrum, there was no need to conduct an auction again.

    The commission had set a reserve price of $16million (N3.2billion) for a slot of the frequency spectrum. One lot or slot of the frequency is made up of two portions of 5MHz.  MTN paid a total of $96million (N19.2billion) for the licence – a cumulative 30MHz in the 2.6GHz frequency.

    “We are doing a post- mortem and we have not yet met with the operators to find out why they did not bid, except one operator.

    “The intention is to be able to know their reasons and to know in what way the regulator can come in to relax some of the conditions in the process, and if this relaxation can lead to more operators going for the remaining eight slots.

    “I am sure the commission will be disposed to looking at the reasons that prevented other operators from coming forward to bid, except only one,”the Chief Executive Officer of the NCC, Prof Garba Danbatta had said.

    He explained that the regulator incorporated elements of flexibility in its dealing with the operators in order to continue to sustain the growth in the sector, which he said, had the potential to provide an alternative to oil and gas.

    Danbatta said the NCC was happy with the level of compliance with regulatory stipulations in general, “minus the MTN incident, which cast some sort of shadow on our regulatory derive to ensure sustainability and stability of the industry.”

  • How to exit business, by experts

    Business exit experts have advised entrepreneurs on different ways they can not only exit their businesses but also how they can carry out business valuation if they want to sell or buy.

    The experts, who shared their views during, the CompexAfrica business exit forum in Lagos, advised technopreneurs to engage the services of experts should the need arise for them to sell or buy into any business. The experts shared their experiences on how to prepare a company for sale, and how to value small businesses too.

    CompexAfrica platform, which has over 90 businesses worth several billions of naira listed on it for sale, brought together some business buyers and sellers recently.

    A Director from Ernst & Young, Damilola  Aloba in his presentation said “business valuation is an art and not a science”. It depends largely on the aims and objectives of either the buyer or seller at a particular point in time.

    According to him, the three fundamental approaches to business valuation are asset-approach, market-approach and income-approach. He added that intrinsic and relative valuations can also be used.

    In intrinsic, the value of an asset is estimated based upon the business cash flow, growth potential and risk. While in relative valuing, assets are valued by looking at what the market prices of similar assets are.

  • Mixed grill for stakeholders

    Mixed grill for stakeholders

    Despite adding N1.4trillion to the gross domestic product (GDP) of the country in the third quarter of this year, the telecoms sector had its challenges, LUCAS AJANAKU reports.

    The economic recession, rise of disruptive technologies, government fiscal and monetary policies posed daunting challenges to the telecoms industry. While revenue from voice calls dipped, the operating environment got more hostile. Some of the high points of the year are:

     

    Two million ICT jobs target

     

    The Federal Government expressed its determination to create two million jobs from the information communication technology (ICT) industry before the year ran out. It directed the umbrella body of the telecoms companies in Nigeria, the Association Telecommunications Companies of Nigeria (ATCON) to come out with implementable frameworks on this.

    The Minister of Communications Technology, Mr Adebayo Shittu told operators during a reception held in his honour in Lagos that the enabling environment and relevant laws to achieve this are all in place.

    Shittu said technology, particularly ICT, has become the critical driver of the knowledge-based economy, adding that as the prices of crude oil daily nose-dive in the international market, paying attention to the sector becomes an imperative.

    It is not clear if the target of the Federal Government was met in view of the hostility of the operating environment.

     

    2.6GHz spectrum sale blues

     

    During the year, the Nigerian Communications Commission (NCC’s) move to auction the 2.6gigahertz (GHz) spectrum recorded very dismal response from the operators as only MTN participated and won six slots.

    Director, Spectrum Administration, Mr.  Augustine Nwaulume said a total of 14 slots were open for interested bidders, adding that each slot will be on offer at $16million each thus bringing the gross total to $224million (about N44.6billion).

    He said the Commission offered the spectrum on a technology neutral basis, adding that it could be used to provide any telecoms services.

    For roll out of services, he said the Commission intended to follow the International Telecommunication Union, (ITU) recommendation setting aside spectrum in the 2.6GHz band for the provision of advanced wireless broadband services.

    The spectrum lots won by each bidder, he said would be assigned on a nationwide basis covering all the states of the federation and Federal Capital Territory (FCT).

    “There are total of 14 slots. If the bidders exceed 14, they have to go into auction but when they do not exceed the number, they will be allowed to pay generic reserve price of $16 million,” he explained.

    He said the spectrum is considered to be a valuable national resource for which commercial opportunities exist.

    The reserve price for a 10 year license, according to him is dependent on the generic reserve price and the number of lots applied for by an applicant determined by the intention to bid deposit (IBD) paid.

     

    Telcos axe workers

     

    Workers in the telecoms industry were sacked as the foreign exchange (forex) scarcity bit harder.

    The Association of Telecoms Companies of Nigeria (ATCON) warned that more workers would have to go if the policies were not revisited.

    Its President, Olusola Teniola lamented that revenues from voice calls have declined sharply while data that was supposed to have provided alternative revenue stream is being challenged by operating cost.

    He said: “Our association has some concerns which include unstable forex rates. The free fall of the naira against the dollar has constituted a serious source of worry to our sector; the continuous depreciation of the naira is not encouraging from a capital expenditure (capex) roll out perspective.

    “Again, revenue derived from voice is seriously being challenged. To worsen the situation as an industry, the telecoms companies are barely making any money from voice due to considerable drop rate in average revenue per user (ARPU). The direct implication of this is that the revenue that is generated from data is now being challenged by the cost of operating the business which is increasing on a daily basis and may lead to further laying-off of workers.”

     

    Communication Service Tax rage

     

    The Communication Service Tax (CST) Bill pending before the National Assembly aroused public condemnation among stakeholders in the industry.

    The CST Bill would require consumers of voice, data, short message service (SMS), multimedia service (MMS) and pay TV services to pay a nine per cent tax on the fees paid for the use of these services. This tax would be collected in addition to the five per cent Value Added Tax (VAT) that consumers already pay when they purchase devices and communication services, the 12 per cent import duties paid on ICT devices, and the 20 per cent tax levied on subscriber identity module (SIM) cards.

    The Association of Licensed Telecoms Operators of Nigeria (ALTON) said instead of overtaxing the already impoverished subscribers,  cutting down the cost of governance at all levels made sense.

    Its Chairman, Gbenga Adebayo said: “Our opinion is that the introduction and collection of the tax without the exclusion of the applicability of the Value Added Tax (VAT) (which was introduced by the Value Added Tax Act and is also applicable to services rendered by service providers in the telecoms sector) will amount to double taxation as the proposed tax is an additional tax on communication services rendered to the same end users who already pay a five percent (five per cent) tax as VAT.

    “Also the administration of this tax regime as proposed will be cumbersome and impractical; we must correct this general notion that service providers can absolve any tax without considering the capital and operational cost to the service providers.

    “Today the country has more than 83 million unique subscribers, accounting for 45 per cent of the population. As well as providing access to financial services, education and healthcare to millions of citizens, many for the first time, telecoms has also played a critical role in reducing transportation, communication and transaction costs.  Pushing up the cost to consumers, this tax will inevitably adversely impact the adoption of broadband affordability which is a key challenge in connecting the unconnected,” he said.

    ATCON warned that about 10 per cent of Nigeria’s population (some 20 million people) risked being denied access to the benefits of the gains of ICT if the National Assembly goes ahead to pass the bill.

    Teniola said: “Contrary to uninformed opinions we do not object to reforms in taxation neither do we regard taxes as burden. But the projections are that a new tax on ICT services as high as nine per  cent that is being proposed would result in excluding 10 per cent of the population, that is talking of about 20 million Nigerians from access.”

     

    MTN fine resolution

     

    The $3.4 billion (N1.04 trillion) fine imposed on MTN in October 2015 was amicably settled during the year after nearly six months of negotiation. The NCC agreed that MTN should pay only N330 billion from the N780 billion it was earlier reduced to.

    This amount includes the “goodwill” payment of N50 billion earlier by MTN to the Federal Government.

    In line with the terms of the resolution, the balance of N280 billion would be paid by MTN in six tranches between this year and May 31, 2019.

    Details of the payment plan showed that MTN would immediately pay N30 billion into NCC’s Treasury Single Account (TSA) with the Central Bank of Nigeria (CBN) 30 days from June 10 when the agreement was signed.

    A statement signed by the Director, Public Affairs, NCC, Tony Ojobo, indicated that other tranches of payments would be March 31, 2017 (N30 billion), March 31, 2018 (N55 billion), December 31, 2018 (N55 billion), March 31, 2019 (N55billion) and the balance of N55 billion on May 31, 2019.

    Mr. Ojobo said the resolutions were signed by Executive Vice Chairman (EVC) of NCC, Umar Danbatta; NCC Commission Secretary, Felix Adeoye, Chief Executive of MTN Nigeria, Ferdi Moolman and the Company Secretary, Uto Ukpanah.

    As part of the agreement, MTN is expected to apologise to the government and Nigerians within one month of the execution of the agreement.

    Besides, the telco would also subscribe to voluntary observance and compulsory compliance with the Code of Corporate Governance for the industry.

    Equally, MTN agreed to take immediate steps to list its shares on the Nigerian Stock Exchange (NSE) as soon as commercially and legally possible after the date of execution of the agreement.

    Parties also agreed that “the terms of settlement cannot be altered, varied, annulled or modified in any respect, except by writing duly executed by both parties”.

    MTN Nigeria CEO, Mr. Ferdi Moolman, said it was of critical importance that the resolution was reached, noting it would be of universal benefit to all parties given the importance of the ICT industry in Nigeria and its tremendous impact on socio-economic growth of the people.

     

    Data tariff hike puzzle

     

    The NCC asked big carriers to increase data tariffs in its efforts to further check the emergence of dominant operators in the data service segment of the industry.

    The NCC, had through a letter dated November 1 and addressed to the telcos, said the interim price floor for data services is No.90k/MB for big operators, adding that the rate will remain in force pending the finalisation of the study on the Determination of Cost Based Pricing for Retail Broadband and Data Services in Nigeria.

    In response to the regulator’s directive, MTN sent a text message to all its customers, preparing their minds for a new  data tariff regime. The short text message read: “Dear customer, please be informed that from 1st Dec, some MTN data tariffs will be increased to reflect the new rates set by the NCC to operators. Thank you.”

    The letter was titled: Re: Determination of an Interim Price Floor for Data services, it read: “We refer to our letter dated July 29, 2016 and the Industry Stakeholders meeting that was held on October 19, 2016 where telcos were asked to comment on the interim price floor for data services.

    Perhaps, that was the most unpopular decision ever taken by the regulator in over a decade. It attracted a flurry of condemnation from every sector of the economy except from the big telcos. The NCC had to suspend the implementation of the ‘direction’in the interest of the public.

     

    International termination rate hike

     

    NCC increased International Termination Rate (ITR) from N3.90 per minute to N24.40 per minute, a 525 per cent increase.

    ITR is interconnection charges set by mobile traffic carriers on calls originating from other networks. Though the regulator did not give reasons for the hike, notice it issued dated October 5 read: “The Nigerian Communications Commission, on September 16, 2016 reviewed the termination rate for international inbound traffic from N3.90/min (about $0.013 today) to N24.40/min. The interim rate will subsist pending the conclusion of the study of the Determination of Cost Based Pricing for Mobile Voice Termination Rates.”

    NCC’s over 525 per cent increase in the ITR could be traced to a recommendation in an analysis prepared by its Policy, Competition & Economic Analysis Department last year.

    In an Assessment of International Voice Traffic Termination Rates, NCC noted that while regulatory authorities tend to protect service providers and consumers, telcos and the government would prefer higher rates that bring in hard currency and can fund investment, expand domestic network, fund innovation and improve quality of service (QoS).

    It also notes that revenues from international calls are seen as means of cross-subsidising domestic calls. This is tagged to a symmetrical system that shows money flows from developed to developing countries as most traffic originates from rich countries and high settlement rates favor the recipient countries.