The Nation Newspaper

Category: e-Business

  • Rural subscribers want 4GLTE coverage

    Globacom customers have urged the telco to extend the 4G LTE network to other parts of the country to enable more subscribers enjoy the benefits of the advanced technology.

    A cross section of Glo subscribers who made this call advised the telco to extend the 4G LTE service to other parts of the country especially their respective home towns and villages so that they can relish the experience whenever they travel home.

    A Bureau De Change operator in Zone 4, Wuse, Abuja, Maniru Saminu said he has enjoyed services on the 4G LTE, adding that it is the fastest internet connection in the country.

    “I really appreciate Glo 4G service. It is very fast. I am enjoying the internet service, I do not experience delays doing streaming and downloads. I also do my internet banking transactions with ease.

    “I even gave my old Samsung S7 Edge phone to one of my friends to use and he has subscribed. The second person will soon subscribe. I want to urge Globacom to bring the service to Kano, my home state so we can enjoy it over there also,” said Saminu.

    Another customer, Stephen Obembe, who said he ported to the Glo network praised Globacom for rolling out 4Gservices in Abuja. “It’s been great. Glo 4G has been good, very good. I use a lot of data for my business and I am really satisfied with the service. I am very happy I ported to the Glo network.”

    Also, a fashion designer based in Adeniran Ogunsanya area of Surulere, Lagos, Titilayo Lawal, applauded the 4G LTE service. “It is good; it is very fast no matter the amount of attachment you are sending.  I love the service.”

    She, therefore, called on Globacom to extend the network to other locations as soon as possible for others to enjoy its benefits.

    Globacom also assured customers who have upgraded to Glo 4G LTE network of efficient services that will stand the test of time.

    “Glo LTE network is one of the very best you will find anywhere in the world. Apart from an expansive, nationwide state-of-the-art telecommunications infrastructure which our 4G LTE  network is predicated on, it is also riding on the much sought-after spectrum band 28. This gives it a strong edge,” said Glo in a statement.

    The company said its frequency band has excellent wide area coverage with wider bandwidth, data capacity and higher performance. “It also has much better indoor reception than other frequency bands because of unparalleled ability to penetrate building walls and similar obstacles,” it added. Globacom said that it is working towards connecting more parts of the country to the 4G LTE network, urging subscribers to exercise patience. The company stated that subscribers will never experience interruptions even when they move out of the 4G LTE network coverage, adding that the configuration of the network has taken care of that.

    “When a subscriber moves out of 4G LTE network coverage, our 3G or 2.5G network (depending on the subscriber’s location) automatically drops on the phone to ensure the subscriber continues to enjoy connectivity. Calls or browsing is never interrupted. You will only notice that the speed will drop to 3G or 2.5 G level, depending on the area. We are ramping up efforts to cover everywhere as soon as possible so that wherever our subscribers are, they can enjoy the same top notch quality” said the company.

  • Call tax? Not at all, say stakeholders

    Call tax? Not at all, say stakeholders

    Central Bank Governor Godwin Emefiele has advised the Federal Government to explore the imposition of a new tax on calls made above three minutes, among other measures, to shore up revenue as the recession takes its toll on our fragile economy. Stakeholders in the telecoms industry have kicked against the suggestion. They say such a tax will further stunt the growth of the sector, which they claim is the gold mine of the Federal Government, LUCAS AJANAKU reports.

    Though the forum was not designed to discuss tax issues or how to raise money to finance Federal Government’s budget deficit, the economic recession ravaging the nation made the idea of discussing how to pull the economy out of the woods almost inevitable at every forum organised by professional bodies.

    So, when the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, found himself amongst his professional colleagues during this year’s Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, he used the occasion to proffer solutions to the cash crunch problem bedeviling the nation.

    When he mounted the podium and was handed the microphone to deliver his keynote address, all the bank CEOs listened attentively.

    He said: “There are several ways we can raise additional revenue to finance the increased expenditure that is needed to engender fast and sustainable growth in the economy.

    “I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call. In order to protect the poor and vulnerable amongst us, we could structure it to only take effect after the third minute of talk.

    “Some analyses have indicated that the government could earn about N100 billion per annum from this alone. Obviously, this surcharge will mainly be borne by middle and upper class people since I do not know many poor people who make calls for more than three minutes!”

    On other plausible new sources of raising funds, Emefiele said: “Nigeria could consider introducing minimal property taxes across the country. This not only raises money for the government but also could be a veritable weapon against corruption since it creates a database of who really owns homes in this country.

    “Another option to consider would be to fully implement the 2003 Cabotage Act. This Act stipulates that all cargoes and passengers in the inland and coastal waters be transported by ships and ferries built, owned, crewed and manned by Nigerians.

    “Contrary to the requirement of this Act, there are several foreign-owned vessels providing shipping services locally. Out of about 600 ships that operate within our waters, only about 60 of them are owned by Nigerians and are mostly idle, in violation of the Act.

    “Industry sources suggest Nigeria may be losing as much as N2 trillion annually from this anomaly. In addition to raising revenue, a full implementation of the Act could also spur job creation, capacity building, and significant backward integration.”

    According to the Nigerian Communications Commission (NCC), mobile telephone subscription increased from 149million in Q2 of this year to 153million as at September and teledensity moved to 109 per cent.

    Telephone density or teledensity is the number of telephone connections for every hundred individuals living within an area. It varies widely across the nations and also between urban and rural areas within a country.

    There are currently five Mobile Network Operators (MNOs) in the country. They are Airtel Nigeria Limited, Etisalat Nigeria, Globacom Nigeria Limited, MTN Nigeria Communications Limited and NATCOM Consortium trading as ntel.

    Fixed/Fixed Wireless Operators include IPNX, 21st Century Nigeria Limited, Glo Wired and MTN Wired in that order that have contributed to the growth of the sector meaningfully while Smile Communications provides Voice over Internet Protocol (VoIP) services among others.

    Reacting to the CBN’s suggestiion, the Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Engr. Gbenga Adebayo, said the group disagreed with the CBN’s proposal. He warned that it will put spanners in the wheel of government’s ambition of growing the industry.

    In an email response, he said:  “We disagree with the proposal to introduce telecom call tax: this will impact on accessibility and affordability of telecom services. It will also contradict government’s broadband penetration objectives of achieving 30 per cent by 2018.

    “Telecom is the most affordable service today and introduction of any further taxes and levies will impact on the users in the face of current economic recessions.

    “Government should rather look widening the tax net and capture more people who are currently not paying any taxes other than further taxes on telecom services.

    “Unconfirmed  report has it that there are less than 20 million Nigerians who currently pay any taxes to government, meaning there could be well over 50 million people who are taxable and are not currently captured in the tax net: government should focus more effort in this regard than having to introduce more taxes on already heavily over – burdened industry.

    “The CBN governor should be more concerned about how to stabilise the falling rate of the naira against major international currencies and give us access to foreign exchange to procure highly needed hardware and software to keep the industry running than recommending more taxes on telecom services.

    “Any taxes on telecoms will have significant impact on our subscribers and threaten the growth of the industry.”

    Similarly, the Association of Telecommunications  Companies of Nigeria (ATCON) described Emefiele’s suggestion as prescribing the wrong therapy for the ailing economy.

    Its President, Mr Olusola Teniola, said the suggestion from the apex bank’s chief was technically and economically wrong as it will do no good to the economy.

    “Contrary to the CBN governor’s belief, it is the poor people who make more calls than the rich. So, the proposal is not targeted at the middle or higher class. I have not seen any industry where you don’t want people to use your products or services more. We want people to be speaking longer,” he said.

    Teniola said the proposal that people should cut their phone calls after three minutes had not been founded on any sound economic theory.

    “In fact, you will now see that people will be cutting their calls. It does not make sense, not only technically but economically, to apply that kind of thinking as a tool or solution out of the present economic recession, it is not going to work,” Teniola said.

    He said instead of the ‘calls tax’, ATCON had already proposed a one-per cent value added tax (VAT) increase across all sectors to the Senate leadership.

    “This is a more realistic measure toward getting more revenue for the government,” Teniola said.

    The ATCON president said the ICT industry is seen as the sector that would help lift the country out of recession, warning however that it should not be killed via excessive taxation.

    The President, Nigeria Computer Society (NCS), Prof Adesola Aderoumu described the suggestion as dangerous, especially at this time when the average Nigerian is looking for what to eat.

    He said the imposition of such a tax on the industry will not be in the interest of the nation, adding that the Federal Government should explore partnering with local ICT companies to proffer autochthonous solutions to the nation’s economic problems. “That is the way to go to salvage the economy and bring it out of recession,” Prof Aderoumu said.

    Also reacting, the President, National Association of Telecoms Subscribers of Nigeria (NATCOM), Deolu Ogunbanjo, said if the CBN governor has run out of ideas on how to steer the economy to the path of recovery, he should seek advice from experts.

    According to him, there are already about 26 different taxes and levies in the telecoms industry, warning that any additional tax, under any guise, will amount to an overkill.

    He said telephony has become a source of succour for the poverty-ravaged masses of the country. He added that subscribers now take solace in their mobile phones to keep in touch with their loved ones.

    According to Ogunbanjo, Ghana has reduced the duty payable for the importation of mobile phones from 50 per cent to 10 per cent while it has also reduced cost of acquiring subscriber identification module (SIM) cards from 20 per cent to 10 per cent.

    In Liberia too, he said an attempt by the regulator to increase call tariff was resisted by the people about two weeks ago.

    Instead of imposing additional yoke on the subscribers and the telcos, he said the Federal Government should tighten the noose around economic saboteurs, plug the remaining leaking holes in the system where tax payers’ money are frittered and also ensure that companies all companies remit VAT to the Federal Inland Revenue Service (FIRS).

    Ogunbanjo lamented that some 70,000 companies operating in the country are still not captured in the tax net. “All these companies should be captured in the tax net; the telecoms industry is already reeling under heavy taxation. Inflation has taken a huge toll on workers’ disposable income while wages have not been increased,” he said.

    The telecom sector added nearly N1.4 trillion (1.11 per cent growth in the real term) to the Gross Domestic Product (GDP) in the third quarter (Q3) of this year.

    Reports released by the National Bureau of Statistics (NBS) at the weekend, showed that the sector contributed N1.398 trillion representing 1.11per cent addition to the GDP. Although this figure is slightly lower than the N1.5 trillion recorded in Q2 of this year, the NBS said the figures reflected the signs of the times.

  • ATCON canvasses incentives to attract FDI

    Telecoms firms have advised the Federal Government to roll out a list of new incentives to attract more foreign direct investments (FDIs) into the industry. This is to complement its diversification programme from oil into other sectors such as information communications technology (ICT).

    The operators, acting under the aegis of the Association of Telecoms Companies of Nigeria (ATCON) said instead of imposing additional tax on the industry as the nine per cent Communication Service Tax (CST) bill by Senator Ali Ndume is seeking to do, the government should be thinking of streamlining the multiple taxes being collected from the industry.

    Its President, Olusola Teniola, who spoke with ICT editors in Lagos at the weekend, said: “Government should come up with incentives like tax holiday, tax rebate and other motivations that would drive foreign investment into the country and create a broadband environment as data is gaining more popularity than voice service.

    “It is necessary at this stage that the Local Content Law (of the oil and gas industry) be adapted to the ICT industry through the Office of Nigerian Content Development in ICT (ONC).This will help reduce capital flight.”

    He lamented that lack of access to foreign exchange (forex) is one of the challenges demotivating operators and urged government to do something about it without further delay.

    He expressed the readiness of the association to work closely with the authority towards resolving and arriving at  appropriate solutions to current economic problems,  adding that the association was committed to defending and sustaining the investment of its members.

    Teniola had paid a courtesy visit to the Senate leadership and suggested a reduction of the proposed CST from nine to 0.2 per cent.

    “The truth is that there is severe over-taxation in our industry. It explains the slow penetration of services into areas yet to be covered by our services across the country. Contrary to popular belief, telecommunication operators and service providers are barely sustaining their existence in these hard times.

    “There are reasons to suggest that the desire to widen the tax net is laudable and that as things stand, telecommunication is about one of the few areas where the net-capture may be widened,” the ATCON chief stated.

    Teniola warned that an attempt to introduce additional tax to sector will do more harm than good to the economy.

    “Now that the Central Bank of Nigeria (CBN) has exhausted all the tools in its arsenal to remedy the economic problems facing the nation, it is high time we talked less and acted more as we may be heading towards depression if we don’t act fast.

    “At a time like this when the government is looking at diversifying the economy through ICT, it is imperative that the sector is projected positively by making it attractive to both operators and consumers,” he said.

  • NCC: 40m ‘disenfranchised’ from telecoms

    The Nigerian Communications Commission (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.

    Last week, the House of Representatives approved the N70.6billion 2016 budget of the regulator.

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

    Represented by the Director of Public Affairs at NCC, Mr. Tony Ojobo, Dambatta said the commission had conducted a survey which identified about 200 communities nationwide with access gap.

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

    Dambatta stated that empirical studies have shown correlation between usage of information communications technology (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.

    The EVC 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.”

    Dambatta maintained that these tasks underscored the need for collaborations with security agencies to curtail criminal assault against telecoms infrastructure.

    He said the mandate before the NCC in ensuring that telecoms sector contribute more to the economy triggers the zeal to perform and the need to halt obstacles to the realisation of its objectives.

    The EVC lamented that the industry has witnessed steady rise in the theft of telecoms infrastructure and vandalism of installations facilities and equipment as well as usage of preregistered subscriber identification module (SIM) cards all of which are infractions of the Nigerian Communications Act 2003 and other extant regulations governing the industry.

    He said while the commission has rolled out various campaigns to raise awareness and made some arrest with the support of the police, there is need for effective strategies to ensure that anyone who is arrested is prosecuted.

    The Deputy Inspector General of Police in charge of ICT, Folusho Adebanjo, a Commissioner of Police, said the police will do everything possible to protect lives and properties. He advised host communities to see telecoms infrastructure within their localities as communal assets.

  • Aramex: We ‘ll transfer technology to Nigeria

    A leading global provider of comprehensive logistics and transportation solutions, Aramex, said it will transfer technology, knowledge and funding to leapfrog Nigeria’s development through support to technology startups.

    Speaking with reporters on the sidelines during the relaunch of its operations in the country at Eko Hotel and Suites, Lagos, its Chief Executive Officer, Hussein Hachem, expressed confidence in the ability of the economy to regain its place as Africa’s biggest and fastest growing economy despite the ongoing recession.

    He said: “Our decision to invest in the Nigerian economy, despite current challenges, is a demonstration of our support for the government’s efforts to stabilise the economy and make it once more attractive to global investors. We’re committed to offering solutions to help shape the logistics and transportation industry using technologies that will connect Nigeria with the rest of the world, ensuring safety of goods and prompt delivery. This is all part of our commitment to finding unique and innovative solutions that continually disrupt and transform the logistics and transportation industries, ultimately helping us maintain our market leadership.”

    Its Managing Director (Nigeria), Faisal Jarmakani, said: “Nigeria is a technologically advanced market with a growing economy and strong business environment. We are pleased to be operating within this space, collaborating and supporting the growing e-commerce and financial technology or fintech industries, with the support of NIPOST and other players. We will continue to leverage technology and innovative solutions to accelerate the growth of our business and enhance customer satisfaction.”

    Jarmakani said Aramex will also scale up the latest innovations being piloted in other operating environments in the market, as it remained a priority to provide the best service to clients.

    The event, which was attended by key stakeholders and influential members of the public, highlighted Aramex’s global vision and advancements being made through its operations in the country and throughout the world.

    The re-launch showcased the huge potential the market offers for small and medium-sized enterprises, micro businesses, start-ups, and innovators by highlighting unique growth prospects of the country and encouraging businesses to continue to show optimism in the ability of the economy to bounce back.

    Founded in 1982, Aramex has grown to become a global leader in comprehensive transportation and delivery solutions for businesses and consumers. Its global footprint is extensive and expanding rapidly, with business operations in over 552 major cities across 69 countries worldwide. Its core operations employ over 17,000 transportation professionals.

     

  • 12-year-old develops mobile app

    12-year-old develops mobile app

    A 12-year-old student, Tomisin Jasmin Ogunnubi, of Vivian Fowler Memorial College for Girls, Oregun, Lagos, under the tutelage of an ICT partnership between the school and New Horizons Computer Learning Centre, has developed an Android mobile tracking application called My Locator.

    The app helps a user to know his geographic location, view it on the map and get appropriately directed. One of the other useful attributes of the app is that it is integrated with an alert button which when pressed in a distressed situation, calls the Lagos State emergency service number (767), and thereby gets the chance of being rescued from such threatening emergencies or conditions.

    The app is already uploaded online and readily available for free download in Google Store. The performance of the likes of Tomisin has confirmed that Nigeria is blessed with sharp and focussed youths who in future, will emerge as Nigeria’s industry captains that will become tomorrow’s entrepreneurial giants like Bill Gates, Mack Zuckerberg, Google Boys and others.

    While presentating the app, the school’s executive director, Mrs. Olufunke Fowler-Amba expressed joy that Vivian Fowler Memorial College for Girls has been living to its billing as a top quality and front row IT-driven school for many years. She said the achievement of Tomisin and many other students who have equally developed other IT solutions at different times are glaring testaments to the fact.

    She expressed satisfaction with the partnership her school has with international ICT firm, New Horizons, based in the United States, and world’s largest international IT skills and certification training organisation with presence in 80 countries.

    General Manager Educational Services, New Horizons, Mr. Bolaji Olaoye congratulated the proprietress, management and  the school for the impressive heights it has acheived.

  • Nokia unveils 4G LTE network

    Nokia, a global telecommunication firm has introduced its 4G LTE communication network to the Nigerian Information Technology (IT) space.

    Telcos, governments at all levels are expected to key into the new development for better internet accessibility.

    The Head of Marketing, Middle East and West Africa, Joachim Wuilmet during a demonstration of the new innovations in Abuja said the new 4G internet service was capable of supporting businesses across the country and beyond.

    Describing Nigeria as a growing market that has good potentials, he said mobile operators working with the fixed operators could further expand market opportunities in the country.

    He said Internet Service Providers (ISPs) could also improve their services to subscribers by adopting the LTE while government can adopt it for protecting the citizens and their environments (smart city).

    According to him, the event was aimed to gather experts, media and other stakeholders in the IT world to Nokia product demonstrations on new ideas and innovations in the sector.

    He added that event was put together to enlighten the global community on its activities towards ensuring the world remain digitally connected.

    He said: “2G network was good for voice, 3G was for beginning of data and 4G brings the full mobile Internet experience. This is the new innovation in Africa.”

  • ICT can pull economy out of recession, says NCC

    The Executive Vice Chairman, Nigeria Communications Commission (NCC), Prof. Umar Dambatta has advised investors and other key players in the nation’s economy to leverage on the information communications technology (ICT) sector as well as telecoms innovations to pull the economy out of recession.

    Represented by the Director, Public Affairs at the NCC, Tony Ojobo at the  Nigeria Innovation Conference (#nis2016), Dambatta cited the pharmaceutical industry where the authenticity of drugs are now verified through the use of mobile phones, as one of the innovations powered by telecoms industry.

    “We are all aware of the innovation where farmers were equipped with mobile phones and they are able to be reached for distribution of fertilisers and other critical infrastructure that have given them better yields.

    “In the movie industry, as represented by Nollywood, the Commission has taken steps to collaborate with the actors and producers to evolve better ways to distribute their contents to the worldwide audience and also to improve their production capabilities through the application of relevant technologies available in other parts of the world,” Dambatta said, adding that the overall effect of this is economic growth.

    The EVC said innovation is one of the eight-point agenda of the current leadership of the Commission. “The fourth item of that agenda, in particular, seeks to promote ICT innovation and investment opportunities. By this, the Commission makes conscious efforts to promote ICT innovations in ways that improve the nation’s ability to compete in the global economy, increase investments in youths, and promote small medium enterprises (SMEs) for new businesses deliveries and breakthroughs,” he said.

    Also speaking on: How Nigeria Higher Education System Can Drive Innovation: Opportunities for Collaboration and Partnership for Economic Development, Senior Education Specialist at the World Bank, Dr. Tunde Adekola, said: “What it means to be ‘innovative’ in 2015 may be different to what it was in 1885 or 1985 (and it will perhaps be different still in 2085). That said, there is little argument that, whatever the year, and wherever you are, basic numeracy and literacy skills are fundamental to one’s education and ability to navigate successfully through life now require learning and innovation skills, statistical literacy,  digital literacy skills, life and career skills”.

    He said both innovation and higher education are important for national development and must be value added. He said:  “In the midst of competition, time is also of essence. It is not only about what we know but when do we know it? Innovation makes all the difference between a developed and marginalised economy.

    “Developing countries will have little success boosting economic.

  • Huawei, 20 carriers to build eight submarine cables in Africa

    Chinese telecoms technology firm Huawei Marine is to partner with 20 carriers to build eight submarine cable systems and upgrade two old ones in Africa. This is to provide better international data access on the continent.

    The firm, which unveiled this plan at a presentation at AfricaCom in South Africa, said connectivity remained central to leapfrogging Nigeria and the rest of the continent out of economic challenges.

    “Connecting people in Africa remains Huawei’s top priority. In partnership with 20 carriers, Huawei will build eight new submarine cables systems and upgrade two existing systems in Africa to provide better international data access for 15 countries. To date, Huawei Marine is  deploying the 6000 km repeatered South Atlantic Inter Link (SAIL) system between Cameroon and Brazil, enabling connectivity for a population of 198 million,” Huawei said.

    The free online encyclopedia, Wikipedia, said “in telecoms, a repeater is an electronic device that receives a signal and retransmits it. Repeaters are used to extend transmissions so that the signal can cover longer distances or be received on the other side of an obstruction.

    “Huawei has demonstrated that it is best positioned to play a pivotal role in supporting digital transformation and development of ICT in Africa. Today, we see that behind a globally competitive connectivity is a strong, collaborative industry chain with high levels of technological convergence and industry integration. Huawei looks forward to working closely with industries and the academia on the continent to create a Better Connected Africa,” Huawei’s Southern Africa Region President Mr. Li Peng, said, adding that connectivity, digital services and applications are its key focus for Africa’s ICT development.

    Huawei Marine is a joint venture established by Huawei Technologies Co., Ltd. and Global Marine Systems Limited, bringing together substantial expertise of the two parent companies. Huawei Marine integrates the state-of-the-art technologies in telecoms and nearly 160 years of marine operations experience, committing itself to the development and construction of submarine cable communication networks throughout the globe.

    Huawei, diamond sponsor of AfrcaCom with Building a Better Connected Africa as its theme, said digital transformation is the engine for Africa telecom industry growth as it will also empower the innovation of other industries.

    It said it focused on its core businesses and is committed to empowering carriers’ digital transformation with continuous strategic investment aimed at opening up platform capabilities to help build an open, collaborative, and win-win industry ecosystem to accelerate digital transformation.

    At its demo and experience pavilion, it exhibited a wide range of solutions such as Narrow Band Internet of Things (NB-IoTs), Smart Home, Cloud, Video, SDN/NFV, Safe City, and others. “These are designed to help African telecom carriers and enterprises transform their network into an agile and flexible one and to realise operational efficiency, smart capex (capital expenditure) and business transformation in the digital era.

    “Connectivity prevails as the panacea for the deployment of digital services and applications for enterprises, government and carriers. From now until 2021, the Mobile Broadband (MBB) data traffic in Africa is expected to increase by at least 26-fold, mainly driven by apps such as video, IoTs and by connecting the unconnected’’. population,” it said.

     

  • Outsourcing for economic diversification

    Outsourcing for economic diversification

    With the recession and the diversification programme of the Federal Government, outsourcing presents the potential to create wealth and jobs, earn foreign exchange and boost the Gross Domestic Product (GDP), reports LUCAS AJANAKU.

    Revelations about unemployment in Nigeria are frightening. Director-General, National Population Commission (NPC), Ghaji Bello, said the country’s population hit 182 million this year with more than half its people under 30 years age bracket. This puts a severe contracting strain on a nation suffering from a slowing economy and declining revenue to provide infrastructure.

    The latest estimate is based on the population of 140 million recorded in the last census a decade ago, using an annual growth rate of 3.5 per cent weighed against other variables such as rising life expectancy and a declining infant mortality rate.

    The country is witnessing a growing youth bulge, with those under 14 years accounting for more than 40 per cent of its citizens, he said. This is happening at a time when the International Monetary Fund (IMF) forecast that West African nations’ gross domestic product (GDP) will shrink 1.7 per cent this year, the first full-year contraction in more than two decades.

    He said: “The implication is that they’re assets, they’re the future of our country, but they are also liabilities; we need to know how to plan for their transition from youths to the next category. It has implications for education, health and security, particularly in our environment where you have a lot of unemployment.”

    Nigeria’s population, currently the world’s seventh largest, is the fastest-growing among the 10 most-populous countries and is projected to exceed that of the United States (U.S.) to become the third-largest with more than 300 million people by 2050, according to the United Nations (UN).

    For an economy that is in dire strait, one area to explore to create jobs for the youth is Business Process Outsourcing (BPO).

    An operator in the sector, iSON BPO, said Nigeria earns $300million yearly through BPO, adding that the firm has 3,000 workers of which over 99 per cent are Nigerians.

    Group CEO for iSON Group Pravin Kumar said: “Through our centres, we are creating large scale employment directly in Nigeria and engendering indirect local employment opportunities as well. We believe so much in promoting local expertise that we do not outsource work outside of Africa.”

    Generally, BPO is contracting non-core function of an organisation to a third party that is best suited to perform the function. In specific terms, BPO also known as Information Technology Enabled Services refers to outsourcing.

    Thus, such functions as call centre operations, accounting, data entry services, software design and other services can be contracted to a third party who perform the services, irrespective of location, and delivers to the client through the use of technology, essentially telecommunications and the Internet.

    When outsourcing happens within the borders of a country, it is known as domestic outsourcing but when it happens across borders, it is offshoring. Through outsourcing, business entities and government organisations have been known to save cost while focusing on their core mandates.

    Why BPO has become popular in recent years is technology. With the use of technology, business entities have been known to move some services to jurisdictions where the cost of labour is cheaper or superior competence exists so that they could deliver high values to their shareholders.

    Convinced about the potential of outsourcing in Nigeria, the World Bank had conducted a study that led to the publication of the report titled:Transforming Nigeria into Africa Outsourcing Hub.

    It estimated the value of the country’s ICT/BPO/ITES to be $5 billion across the public and private sectors and is expected to grow to $10 billion over a five-year period.  With effective policy and management, the sector can create employment for a minimum of one million persons directly and three million indirect jobs.

    According to the report, the strategies that will create these sustainable and demand- driven jobs include the need for the Presidency to be directly involved in the promotion of the sector.

    It said this could be achieved through executive or presidential buy-in, support, championing and direct supervision of the industry.

    It could also be through the setting up of a presidential task force to ensure the effective implementation and monitoring of the job creation strategies/policy across sectors of the economy as well as government digitisation/automation of processes policy directive.

    It said the automation of manual processes, digitisation and electronic archiving of government data and records across Ministries, Departments and Agencies (MDAs) would cut government’s annual expenditure of N20 billion on paper.

    The report noted that savings by this reduction in costs could be used to employ youths to scan and digitalise the government’s data and records, with a minimum of 800,000 jobs being created in 18 months.

    The National Association of Information Technology Enabled Outsourcing Companies (NAITEOC) agrees that both outsourcing provides great potential and veritable tools for diversifying the nation’s economy.

    According to NAITEOC  chair and Managing Director, Interra Networks Limited, Mr. David Onu, the conditions that recommend Nigeria as a great offshoring destination are enormous. They include large English speaking population; flexible labour market regulations; competitive wages (lower labour costs); stronger contract enforcement regime; time zone advantage, rapidly improving business environment; and highly skilled educational workforce.

    Others are rapidly improving internet/ broadband penetration in both urban and rural communities; fast improving infrastructural development in power, telecoms and transportation sectors; development of export processing zones and IT/ science parks such as the proposed Abuja Technology Village; presence of regulatory laws (intellectual property laws, e-transaction regulatory framework), and communication regulations.

    Onu said because of the strategic importance of outsourcing to the country, the association had been partnering with stakeholders to harness the industry.

    He said an enduring strategy is for the nation to grow the domestic outsourcing market so that it would be in a strong footing to reach out for the market abroad, insisting that like India, Nigeria can also earn huge foreign exchange through offshoring.

    He said: “The organisation seeks to promote and position Nigeria as an alternative BPO and Knowledge Process Outsourcing (KPO) destination of choice to companies the world over seeking to outsource such back-end operations as contact centre operations, software development, data management services etc. to competitive alternative destinations around the world.

    “In line with the Federal Government push to diversify the Nigerian economy, the BPO/KPO industry presents a unique opportunity to create a new economy, with the establishment of new businesses and the creation of demand-driven sustainable jobs.

    “We estimate that this industry within three years can employ well over two million people in Nigeria directly and indirectly. The new wealth and jobs to be created will further enable the socio-economic revitalisation of our great country, Nigeria.

    “The BPO /BPM/KPO/ITES industry is a global $1.2 trillion industry and presently accounts for about 8.92 per cent of India’s GDP with revenues in excess of $100 billion. The Nigerian domestic market is estimated at present to be over $1billion based on domestic expenditure and is projected to grow to over $5billion in five years as the domestic market expands and the export of BPO/KPO services from Nigeria increases.

    “As Nigeria seeks diversification of the economy and alternative sources of revenue, the BPO/KPO sector presents a unique opportunity to achieve this. But to achieve this, considerable work has to be done in terms of policy, infrastructure and legislation to effectively position Nigeria in the global outsourcing world.  Presently, countries like Ghana and Egypt have made significant infrastructure as well as policy investments that have greatly boosted the growth of this sector in their respective countries.

    “Most recently, ACS Services a U.S-based managed services set up a 3,000 seat BPO facility in Ghana to provide data entry services to the U.S insurance market. The Egyptian BPO sector is estimated to be a $1billion market while the South African BPO sector is currently valued at an annual $1.6billion.

    “There is need for higher levels of quality of service (QoS) and also affordability to ensure that Nigeria can be competitive in the international BPO/KPO market. To achieve this there is a great need to have a harmonised and structured approach in determining what needs to be done to promote this industry and achieve the clear socio-economic opportunities it represents,” he added.

    To move this agenda forward, Onu said NAITEOC in partnership with the Office of the Vice President, Ministry of Communications, the National Information Technology Development Agency (NITDA), the World Bank, Galaxy Backbone, and other key stakeholders would organise an International Outsourcing Conference between December 5 and 7.

    According to him, the conference seeks to showcase the potential of the Nigerian BPO/KPO industry to an international as well as domestic audience and further enable the socio-economic rejuvenation of Nigeria through the creation of new businesses and demand-driven sustainable jobs for the teeming unemployed in the country.

    For the President of the Nigeria Computer Society, Prof. Sola Aderounmu, key to growing the Nigerian outsourcing industry is for the government to stop outsourcing technology jobs to offshore destinations.

    According to him, as the government is promoting Made-in-Nigeria goods, it should patronise every sphere of the local information technology industry including hardware and software. He said this would boost the capacity of local firms to get offshore jobs.