The proposed licensing of seven infrastructure providers (Infracos) by the Nigerian Communications Commission (NCC), to deepen broadband penetration, will promote corruption and monopoly, says Chief Executive Officer, Disc Communications Limited, Mr Bayo Banjo, an engineer, canvasses the unbundling of spectrum licences to operators. LUCAS AJANAKU met him.
With the liberalisation of the telecoms sector more than a decade ago by former President Olusegun Obasanjo came the transformation of the sector. The number of telephone lines have shot up to over 100 million from about 400,000 while teledensity is more than 90 per cent from less than 10 per cent. With the transformation came some challenges, such as low service quality, cybercrimes and near-extinction of small operators.
Internet as a tool for job creation
What I do know is that no nation can be stable if the unemployment level is high as is in this country.
We will not be able to have a stable nation and I look at the internet as a tool that can create these jobs because what the internet does is that it links people to the rest of the world, so it means that if we have a good internet infrastructure our youths, when the worst comes to the worst, can find employment abroad while being in Nigeria
There are many opportunities and I think the most glaring case of a country that has population problem and has used the internet so effectively is India. Most of the software are developed in India, most of the value-added services, either phone answering and others come out of India. Once the infrastructure is in place, it becomes independent of the government. So, it will even assist the government in job creation. As you know, there are some bad sides to that but there is a huge job title called Yahoo-yahoo, a lot of our young people and even older ones are involved in this, but of course, in any new innovation, there are always bad sides.When mobile phones came, I remember I had to caution people who said, ‘oh things will be fantastic, you can call the police,’ but the reverse is the case. The armed robber can use the phone to warn his people carrying out an operation that police are around. A corrupt bank official can call someone and say XYZ has just withdrawn N4million, meet him at such and such places. So, in any innovation, there is always the good and the bad side.
Challenges
What I believe our problems are with the internet are cost, speed, reliability and in some cases, the devices which involve awareness, education or whatever. Talking about what the problems with the use of the internet are, you don’t need any qualification to say what they are. The only qualification you need is that you are a user.
We are going through all these noises about internet revolution, bandwidth revolution and others without results.
There are, at least, four operators that already have the network that can deliver internet efficiently. In fact, I think two of them have the adequate frequency to deliver. So, what is stopping everybody adopting it? What is stopping the kind of explosion we had with the mobile phone? We had 400,000 phones before now. The GSM at least solved one of the biggest problems we had with availability of phones. Now, if you want 100 phones today, you can get them immediately, that problem has been solved.
One of the major problems is cost and that is why I have said if the government is going to help at all, generally, you will find out that when the government dabbles into this, they come in with good intention, but we know what generally happens, after that. I attribute a lot of the success of the communication system to the fact that the government put a person from the private sector in charge and this gentleman was a CEO in his own right in a private company. He was used to being in charge and as an operator, the first thing I noticed about the NCC at that time, was that if you apply for a licence, and you are qualified, it will be given to you.
Fight against cybercrimes
We are lucky yet that the hackers have not come. I think the first hacking I have seen was probably the stock exchange computers but when they do come, it will be disastrous. The first way to catch a criminal is find out what he does with the ill-gotten wealth. You see a person who was driving beetle and suddenly he is buying a fleet of 500 cars. In developed countries, immediately, they focus on him. They ask him: ‘Where did you get the money? But here, we don’t have that. So, let us put it this way, 80 per cent of crime fighters try to know the source of suspect’s income, which we don’t bother about here. So, we are in real trouble.
You will agree with me that as of yet, we don’t really have much impact on cybercrime. Imagine a situation where somebody breaks into the computers of a bank and changes all the account balances and quickly rushes to withdraw as much as they can from a particular branch. When that becomes rampant, and when we do not see that person being caught or prosecuted, or when we see that person being caught and there is technical excuse as to why the person was not jailed, then there will be an avalanche; then there will be chaos and that’s why I think cyber security in all its aspects should be treated very seriously.
Infracos not the answer to broadband
Infrastructure service providers (Infracos) for one zone is not good enough. It’s a fibre optic network so why do you want one? In fact, what even makes it worse is that this one operator is going to be financed by government to the tune of billions. Who is going to be number one on the list of benficiaries? Of course the president’s friends, senators and others. It will be number 50 before you get a real operator vying for that licence. Is that not a monopoly? Luckily, they will allow the people that already have the networks to continue to operate. Why the restriction? Let economics drive out the unserious people, that is the reality. If you tell me there is one licence in an area and you are going to pump money, who will get those licences.
If the Infracos get funding from the government, will the government let them be autonomous? Will the government not have representation on their boards to secure its investment? We know what happened in NITEL.
NigComSat
Look at what has happened with NigComSat. It’s a good idea, the essential thing that we need but what has happened? Is it servicing anybody? It has the power to reach any part of Nigeria. In short, government has created another NITEL. NigComSat should be sold to investors in the private sector. Again, selling must be done with caution because of real and unreal money. I call it non-real money, I don’t want to call the money what it is but I give you an example, in Abuja, have you not noticed many big estates empty. All over the place, empty. Why are they empty? Because the landlords want a rent that is too high. Why can they afford to keep their estates empty? Because it is not real money. If it is money that somebody worked hard for, he cannot keep an estate empty for five years, he will reduce his rent. It is the same thing with businesses. If non-real money is allowed to invest in businesses, they do not have the motivation to run it as it its real money. In most foreign countries, its not the case that you bringing money, its not the case of you coming to an auction, they will investigate where that money came from and they will be sure that it is proper investors’ money because they know investors will want return on their investment. They know the investors will make people running the business to account for their invetsemnt. It is not simple black and white that people are trying to make it appear; if I have unreal money, I happen to come across $10billion, I can invest in something else, it’s doing well, it’s not doing well. I buy a licence, I tie up a frequency. I know how I got the money. But if it’s real money, investor money, those investors will want a return on their investment or they will sell their shares or close the thing down or which ever.
Mortality rate of local operators
Where I think the government went wrong is realising that it is the small operator that is the most valuable. In my interaction with the NCC, they will say things, such as: ‘to enter telecoms, you must come with huge funds; IT business is expensive; you must come with your expertise and others. The biggest problem is that regulators don’t understand anti-competitive behaviour. This makes big companies to sabotage small companies. We have this in the non-telecoms world there are rumours about businessmen, particularly in sugar, rice, salt and whatever sabotaging other importers. As a result, all the small operators have vanished. The biggest ICT companies in the world, for very strange reasons, started from garage. It is only Dell that started as a student, selling computers on campus. It grew to overpower Compac, IBM and others. So, the hallmark of any developing country, the first policy you must put above all other policies is to protect innovation. Without that, you cannot move forward. America went through this. Rockefeller had to introduce anti-trust laws but the point is this, if I am a big company, and I am happily making money with this technology and a new technology comes that will help the public, why will I adopt it? I want to maximise my investment on the old technology, so I will suppress the new technology. A small company can easily adapt to a new technology. For a big company that is covering the whole of Nigeria, to change technology will probably require a few billion dollars. His attitude will be to resist it. In fact, in many cases what you will see is that most of the big companies in Nigeria already have an internet network. They all have their internet network whether the last mile is WiFi or whether it is 3.5G. They all have a network yet the internet is not exploding.
Operators not doing enough
They are growing these networks as lip service because they will rather stick with the old technology, which is more profitable – you make your calls on your phone, I charge you per minute. On the new technology, you have a monthly fee and with that, you can talk as much as you can; you can text as much as you like. So, if I was a big operator, I will do all in my power to make sure that bandwidth does not come cheap and is not adopted by the general public. You must also remember that internet, technically is free but what you are paying for is the cost of the delivery. So, someone brings free internet from Europe down here, through submarine cable, he has invested billions on the submarine cable, he wants to get his money back. So, you are paying the cost of the delivery. Internet does not cost, it is the delivery that costs.
One of the suggestions I make to government is that subsidise the delivery cost, bring the price down, do it like for three or four years because, we have a problem in this country where the figures of the internet subscribers are very low. You go to companies that are providing internet, they will say they have 6000 subscribers, 100000 subscribers whereas on the telephone, they have 62 million, 30 million. So, there is no incentive to invest because they cannit see the demand. They have put out the network, what is stopping it is cost. When government brings down the cost of the internet, then there will be an explosion in users coupled with awareness and education but the truth is this the internet has a dangerous possibility. The internet is all in all, it can be everything. It can attck the broadcast industry, it can wipe out the delivery system of the broadcast industry, I mean with good bandwidth, you can get all your films either as a stream or on demand. If you take out the phone network, people will be using things like skype which is free. So, you can imagine the threat, its something that the government has to attend to. I have always advocated that government try and influence through policy rather than getting involved.
These are one of the problems that is gong to face the proliferation of the internet but I will say one thing we must stop is government entering into the businrss aagins. And that is what they are trying to do. One thing we must stop is the issue of monopolies. Where suddenly, government policy brings out a licence they say will only be issued to only one person, or to one group in a particular area, that is monopoly already.
