Omoniyi: Investments in internet infrastructure critical to SMEs’ development
- December 8, 2020
- Posted by: vdtcomms
- Category: blog, Information Technology, News, SME, VDT
The Group Managing Director/Chief Executive Officer, VDT Communications, Biodun Omoniyi, spoke to ADEYEMI ADEPETUN, on the imperatives of infrastructure development in boosting the Internet space for small and medium enterprises (SMEs) in the country.
Of late, Nigerian start-ups are increasingly exploring the social media for sustenance. To what extent can government tap into the strength of these youths to drive technological development?
Youths and start-ups, no doubt, have the numerical strength to drive technology development and help Nigeria to achieve its digital economy aspiration a lot faster, but they do not have the capital for expansion. So, the government needs to see their numbers as an opportunity to tap into by providing incentives for them.
One of the incentives is to provide them with cheap capital, supported by training and education. The government also needs to create a better business-enabling environment for our youths and SMEs to enable them thrive and become employers of labour.
They need protection in their businesses with special preference to help them grow with less stress. It must be a conscious effort on the part of the government to address youth unemployment in the country, and this is one of the best ways to achieve it. It is not enough for government to be collecting taxes from organisations without developing its youths. So, part of the money generated from taxes should be invested in youths and SMEs development. If SMEs are protected today, they will surely grow large to compete with exiting large enterprises in the telecoms sector, which also started very small, but became very large with time because of the initial support they got from the government.
What is your view about broadband penetration in the country and how will it help SMEs?
Nigeria has come a long way in broadband penetration. As at 2015 when the current Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta was appointed, broadband penetration was between four per cent and six per cent. In December 2018, the country surpassed its 30 per cent broadband penetration target, and today, the country can boast of 43.3 per cent broadband penetration, with another target of attaining 70 per cent broadband penetration by 2025.
So, with the current broadband penetration level, Nigeria is ripe to achieve its digital economy drive. We have reached a point at our broadband penetration level, where nothing can stop us as a country from achieving our dream of digital economy. With sufficient broadband penetration, businesses will grow and new businesses and companies will spring up. It will be a boost to SMEs, which need infrastructure such as Internet broadband to connect their businesses, especially via social media platforms.
With broadband, companies will save cost and the country will generate new streams of revenues, despite the challenges that come with the digital economy.
What form of industry collaboration can propel SMEs development in the digital economy?
I quite agree that collaboration is necessary to achieve digital economy. VDT, which I operate, for instance, has its focus on providing the enabling infrastructure for broadband growth in the country. We are enabling social media growth. In achieving the digital economy, we have to consider all sides of the digital economy framework, including the consumer side, producer side, enterprise side, and regulatory side. It is also important to bring to notice that social media development will play a crucial role in the digital economy.
I will also say that the enterprise side of it has to do with industries, factories and offices, and that is where VDT plays a key role in the country’s digital economy drive.
Telecoms operators are asking for seed funds to sustain growth development. Do you see funding as a challenge to enthroning a broadband-driven economy?
Nigeria is an emerging market and as a player in it, I strongly believe that telecoms operators need seed funds for their businesses. Naturally, it is very difficult to operate in an emerging market because the cost of sustaining business is on the high side. There are so many things militating against raising funds in an emerging market like Nigeria.
The Nigerian economy, for instance, has not enjoyed economic stability, and the country has to devalue her currency severally to stabilize the economy, yet the economy kept dwindling and it is difficult for businesses to thrive in a dwindling economy like ours. For this reason, funding of long-term projects like the telecoms project has been a Herculean task for business owners. The situation is also affecting infrastructure companies because they need huge money to purchase equipment for infrastructure rollout. VDT for instance, operate on the infrastructure aspect of telecoms business, and I can tell you the fact that it is difficult to raise money for infrastructure and service rollout.
Those clamouring for seed funding for telecoms business are right and government must see to that in order to keep telecoms business running. Just like the Bank of Industry and the Agricultural Development Bank, the telecoms sector needs a telecoms bank that will fund telecoms business in the country.
The multinational players in the telecoms sector do not have much funding challenges like the local players do, so government must support local and small players in the sector to grow and sustain their businesses.
I must say here that whatever incentive the Nigerian Communications Commission (NCC), is giving as palliatives to infrastructure companies (InfraCos), need to go round the small operators if services must be ubiquitous.
Wireless connectivity is crucial to ubiquitous access, and VDT, like several other operators, play well in that space, yet we have little presence of free wireless hotspots in public places. Why is the case of Nigeria different?
Yes, people could get free connectivity in public places like airports and malls in developed countries, but it is not so in Nigeria because of the issue of lack of adequate funds to operate free Internet services in public places.
The free wireless Internet services you experience at airports and malls in developed countries were installed by small players, which got funding from the government, but in Nigeria, it becomes difficult to set up free wireless hotspots where there is no funding from the government. The Lagos State government tried it some years ago by using small operators to establish free Wi-Fi hotspots in some parts of the state, but I do not know if those hotspots are still working because of funding and sustainability.
There has to be continuous funding for installation and maintenance for such projects to be sustained. The operators cannot go to the bank to take a loan for such projects because of the two digits interest rate that is involved in bank loan, which makes highly expensive and risky to take a bank loan for telecoms business.
What happens to the Universal Service Provisions Funds (USPF) funding for telecoms operators. Why can’t small players take advantage of such funds to provide free Wi-Fi hotspots?
If the telecoms regulator channels the Universal Service Provisions Funds (USPF) to small operators, then I think they should be able to provide free Wi-Fi hotspots in some designated public places across the country. In developed countries where you experience free Wi-Fi hotspots, they are being funded by governments, and we need our government to do so.
Telecoms development is largely tilted towards urban cities, while the rural and underserved areas remain impoverished of telecoms services. Is it not possible for the operators to use the gains made from cities to deploy services in underserved and unserved areas of the country?
The NCC had rightly said Nigeria has 114 access gaps and about 25 million Nigerians are not connected to broadband. Nigerians should not expect telecoms operators to invest their gains in unserved areas of the country because investments love profit.
Every business person wants to invest in areas where investments are easily recouped. They invest money and need profit in return. So, they cannot get that kind of profit in underserved and unserved areas, and no investor will want to invest in such places unless there are incentives from the government, and that is exactly what the USPF funds are meant to achieve. More profits are made from urban areas because of the population and no operator will install 3G and 4G networks in rural areas where the return on investment is very low.
How will you assess the implementation of the new National Broadband Plan, which seeks to achieve 70 per cent broadband penetration by 2025?
Efforts on the part of the government to meet the 70 per cent broadband target as enshrined in the new National Broadband Plan is ongoing, but some people are of the view that we could effortlessly achieve the target by 2025, because of the springing up of start-ups and FinTech operators, which are actually driving new software applications that will make digital transaction a lot more possible. Telecoms operators are also busy deploying 3G and 4G networks, which are broadband enablers. All these put together will fast-track broadband penetration greatly.
What is your view about regulating technology activities in the country, in relation to the Nigerian Data Protection Regulation, which the National Information Technology Development Agency (NITDA) is championing?
The Nigerian Data Protection Regulation (NDPR), which the National Information Technology Development Agency (NITDA) is currently promoting, is a good move by NITDA, and they should be commended because data protection and regulation have become global issues.
The data regulation embarked upon by NITDA, will compel big and small organisations to be mindful in handling personal data, because data is now the new oil that will boost the Nigerian economy if properly regulated, analysed and put into proper use.
What is your take on monetisation of data in Nigeria?
I quite agree with those calling for monetisation of our data because Nigerians are not making good money from data, yet we have data all around us. We need to first organise our data before we can monetise it. This is true because data that needs to be monetised, must first be structured, organised and cleaned up, to enable monetisation. We have a lot of personal, organisational and national data all around us, but we need to structure them to make the best out of the data.
For instance, in the retail part of our business, it was after we re-organised our organisational data that we started making good money from it. So data must be first organised and structured before monetisation of the data can work effectively. Data simply helps organisations to make good business decisions and predictions that will help the organisation to avoid wastages and in turn make a good profit. So data have to be organized, and well analysed for better decision making that will be profitable to the organisation.
Will 5G Work in Nigeria?
Last month, there was a lot of celebration (especially within the tech community) around the arrival of 5G in Nigeria, courtesy of MTN. The announcement implied that Nigeria is now on track to launch the 5G network commercially, joining other African countries such as Lesotho and South Africa. But is Nigeria ready for 5G? Before I answer that question, let me tell you a quick story.
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