Taking ICT in Nigeria to the Next Level

Nigeria witnessed tremendous growth in the Information Communications Technology (ICT) sector of its economy in the last decade. As at the year 2000, the country had 400,000 connected lines and 25,000 analogue mobile lines with teledensity standing at 0.4 lines per 100 inhabitants. Compare this to over 76 million lines at the beginning of 2010 with a teledensity just above 50 lines per 100 inhabitants. Many have attributed this success to the current telecommunications policy put in place in September, 2000. The policy ushered-in the full liberalization of the telecoms market. The impact was more pronounced in the mobile telephony segment of the industry with the entry of MTN, Econet Wireless (Zain) and Mtel (now moribund) in 2001. These companies based their services on the global system for mobile communications (GSM) technology and it brought a lot of value into the Nigerian economy by creating what may be considered as a brand new industry that created business opportunities such as mobile phone sales and repair, distribution and sales of sim cards and recharge vouchers, electronic voting through mobile phones on almost every TV reality or game show such as Big Brother Africa, Idols Africa and Who Wants to be a Millionaire? Banks have also leveraged on ICT to provide electronic banking to Nigerians through the provision of Automated Teller Machines (ATM) services, Point of sale (POS) terminals, internet banking and several other customer service applications.

The multiplier effect of the growth of ICT in Nigeria cannot be over-emphasized. Presently, about 1007 licenses have been issued by the Nigerian Communications Commission (NCC). This includes licences for: central equipment identity registry services, collocation services, community telephony services, digital mobile services, electronic directory information services, fixed wireless access, global mobile personal communications system, interconnect exchange, international gateway, internet exchange, internet services, metropolitan (fibre) cable network, national carrier, national long distance operators, public mobile communications (vehicular tracking services), private network link (VSAT domestic), private network link (local exchange operators), private network link (fixed telephony), private network link (VSAT hub & international services), pre-paid card calling services, installation of terminal or other equipment, public mobile communications (trunk radio services) and unified access services.

The rapid growth in Nigeria’s ICT sector is not limited to the GSM market; the popular computer village in Ikeja is a clear evidence of how Nigerians have embraced technology. Despite its short-comings, this market makes a valuable contribution to the economy in terms of employment generation; supply of computers, mobile phones as well as other ICT related products. This informal market now provides thousands of youths with a means of livelihood while giving them the opportunity to acquire useful skills such as coupling computer systems, installation and repair of computers, printers, mobile phones and other telecommunication equipment.

These positive effects are welcome. However, many within ICT circles in Nigeria have pointed-out that the industry needs a new policy framework that will accelerate ICT growth and development in the country. A lot of the growth in the telecoms market has been driven by voice-based services; this is limited in scope and application. For the future, the telecoms market needs to move on to data-based services that rely heavily on ubiquitous internet access and connectivity. Such progress will allow for greater growth in the industry and also ensure increased investment and business opportunities within the country. This will affect virtually every facet of life; for example, e-learning, telemedicine, telecommuting, information technology outsourcing services as well as other e-business platforms will become feasible and attainable in Nigeria.

However, challenges arising from erratic power supply, high interconnection rates, spectrum licensing, training of local manpower, technological advancement, information management and security as well as ability of the regulator (Nigerian Communications Commission) to effectively supervise the market with an outdated policy (the 2000 National Communication Policy provides for a three-year short term and five year medium term policy which was supposed to have been reviewed since 2005) have made the development of a new policy framework for the industry imperative.

Hence, the inauguration of a 26-man committee by former Minister of State for Information and Communications, Alhaji Aliyu Bilbis on Thursday, March 11, 2010 to review Nigeria’s telecommunications policy is definitely a welcome development. The committee which has three months to complete its work is chaired by former Executive Director of the Nigerian Telecommunications Limited, Mr. Isaiah Mohammed; Mr. Eddie Amana is Vice Chairman. Other members of the committee include: President of the Digital Bridge Institute, Prof. Raymond Akwule; Mr. Stephen Bello from the Nigerian Communications Commission; Roy Murray-Bruce of Silverbird Group; Former Managing Director of NITEL, Mr. Abubakar Nahuche; and Mr. Shola Taylor, Managing Director of Kemilinks International.

Speaking at the committee’s inauguration, Alhaji Bilbis noted: “You are aware that within two years of the inauguration of this policy, the envisaged teledensity figures were surpassed. In less than ten years, we have more than 76 million active lines in the network and teledensity figures have gone beyond 50 per cent mark as against 10 per cent envisaged by the policy.

“The import of this is that the review of the current policy is overdue. Ideally, this policy should have been reviewed at least once before now, given the dynamic nature of the industry and the rapid growth that has been witnessed in the sector.”

The former Minister captured the situation aptly with his words. However, for me, the major aim the committee has to focus on is: providing the appropriate regulatory framework that will make Nigeria become a serious player in the information age. The internet provides the largest single market in the world and is one of if not the major driver of globalization. Current figures for internet access in the country are very poor, figures released in May 2009 by internetworldstats.com show that the number of internet users in Nigeria at that time was 11 million, just a paltry 7.4% penetration of the entire estimated population of 149 million. The country ranked 31st among the list of countries with the highest number of internet users.

These figures indicate that the next area of major growth in the ICT sector in Nigeria will be the internet connectivity market. Already, the four active GSM companies in the country viz. MTN, Globacom, Zain and Etisalat are offering some form of internet connection to their subscribers. However, Globacom seems set that to take the early advantage when its intercontinental fibre-optic submarine cable becomes operational this year. This will automatically generate additional capacity and probably help to reduce cost of internet connection for millions of Nigerians as it will provide an alternative to NITEL’s SAT-3 fibre-optic submarine cable which carries the bulk of internet traffic in the country.  Another entrant into the industry that is expected to provide competition is another submarine fibre-optic cable called Main One and there are other competing technologies such as Wi-Max and Direct Satellite Link (DSL) that will make competition in the internet connectivity market tougher.

As a result of the rapidly unfolding growth and development in the internet connectivity market, there is a need for its proper regulation and supervision. The work of the telecommunication policy review committee will be crucial in ensuring that the telecoms market in Nigeria provides a level-playing field for all the competitors as well as protect subscribers to both telephone and internet services. The rapid advancement of information communication technology means that very soon Internet Service Providers (ISPs) and telephone service providers will be heading for an epic battle to gain and retain subscribers. This is expected because as the market already stands, GSM and CDMA (Fixed-wireless) service providers are already offering internet services to their subscribers; this is definitely cutting demand for the services of ISPs. However, the ISPs may soon be hitting back as internet access and connectivity grows in the country and becomes cheaper, internet based voice services such as Skype will provide a cheap alternative to using mobile or fixed wireless phones for voice calls.

Furthermore, internet and mobile service providers are creeping in on television. Already you can watch satellite television on some mobile handsets. However, the major challenge to Terrestrial television could actually come from internet television. This technology is rapidly improving and could signal the end of local television as we know it in Nigeria.

Also, as internet connectivity grows, the challenge of internet scam and other e-crimes such as ATM fraud will become an even bigger challenge to handle than it already is. The regulator and service providers need to be empowered to tackle and decisively eliminate these challenges if the nation is to fully enjoy the benefits of increased growth in internet and telephone penetration.

These are some of the emerging scenarios that the NCC will have to manage in the near future. Hence the new policy must provide a strong framework for these and other related issues to be properly handled so as to drive Nigerian economic growth through ICT. This sector has the potential to be Nigeria’s chief revenue earner if properly structured and regulated; many industry pundits are hoping that this golden opportunity will not be wasted.


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