Nigeria: Internet Entrepreneurship, A new paradigm for  internet penetration in Africa

Nigeria: Internet Entrepreneurship, A new paradigm for internet penetration in Africa

Victor U. Chukwuma

Department of Physics, Olabisi Onabanjo University, P. O Box 351, Ago-Iwoye, Nigeria Tel : +2348055075270, Email: [email protected]

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Introduction

eGYAfrica is a bottom-up effort by scientists from across the globe but mainly in Africa who aim to achieve better Internet access for tertiary institutions in Africa. The plan is to ensure that African scientists corroborate, without a digital divide, with their colleagues from the rest of the world. eGYAfrica’s strategy is threefold: 1. Influence Policy makers at National and Continental levels2. Partner with Internet Service Providers 3. Encourage formation of National and Regional Focus Groups to drive (1) and

(2)In our presentation, we will attempt to show the reason the engagement of Internet Service Providers, the internet entrepreneurs, is crucial to the achievement of the goals of eGYAfrica

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Introduction

It is argued that Internet penetration in Africa will be mainly driven by the education sector due to its high demand. However, the education sector with its genuine needs and demand does not have the resource, for now in Africa, to deploy its own fibre optics network and must leverage the private sector. Its our hypothesis that internet penetration in Nigeria and by implication most of Africa is driven almost solely by a new class of private sector entrepreneurs who are motivated by the power and financial rewards of the internet. Given that the future of the internet in Africa will depend on the growth of this clan, eGYAfrica must point out to the private sector that if both sectors build synergy it will create innovation and mutual wealth.

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Introduction

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Recently, the International Telecommunications Union (ITU), held its Telecom World 2012 Conference at Dubai’s World Trade Center during October 14-15, 2012. This event which was five days of high-level meetings, discussions, workshops and other activities and networking events held by the 120 delegations, 85 ministers, presidents of telecommunication companies, and numerous experts addressed key issues in the field of Information and Communications Technology (ICT) including affordability and availability of internet access to everyone.At one of the sessions, the Secretary General of the ITU, Dr. Hamadoun I. Toure highlighted the benefits of broadband deployment, and encouraged African leaders to invest in broadband development and penetration, insisting that the future of every nation lies with broadband. The sentiments of Dr. Toure are congruent with the objectives of eGYAfrica and should strengthen one of our aforementioned strategies, leaving us with only ways of thinking out of the box to engage partners we identified in this presentation who will drive us to our goals.

INTERNET USAGE STATISTICSThe Internet Big Picture

World Internet Users and Population Stats

Source: Internet World Stats 2012 5

WORLD INTERNET USAGE AND POPULATION STATISTICS June 30, 2012

World Regions Population ( 2012 Est.)

Internet Users

Dec. 31, 2000

Internet Users Latest Data

Penetration (% Population)

Growth 2000-2012

Users % of Table

Africa 1,073,380,925 4,514,400 167,335,676 15.6 % 3,606.7 % 7.0 %

Asia 3,922,066,987 114,304,000 1,076,681,059 27.5 % 841.9 % 44.8 %

Europe 816,372,817 105,096,093 518,512,109 63.5 % 393.4 % 21.5 %

Middle East 223,608,203 3,284,800 90,000,455 40.2 % 2,639.9 % 3.7 %

North America 348,280,154 108,096,800 273,785,413 78.6 % 153.3 % 11.4 %

Latin America / Caribbean 592,994,842 18,068,919 254,915,884 43.0 % 1,310.8 % 10.6 %

Oceania / Australia 35,815,913 7,620,480 24,279,579 67.8 % 218.6 % 1.0 %

WORLD TOTAL 7,012,519,841 360,985,492 2,405,510,175 34.3 % 566.4 % 100.0 %

Internet Usage Statistics for Africa( Africa Internet Usage and Population Stats )

Source:Internet World Stats 2012 6

INTERNET USERS AND POPULATION STATISTICS FOR AFRICA

AFRICA REGION Population (2012 Est.)

Pop. % of

World

Internet Users, 31-Dec-11

Penetration (% Population)

Users % World

Facebook 30-June-12

Total for Africa 1,073,380,925 15.3 % 139,875,242 13.3 % 6.2 % 43,404,160

Rest of World 5,939,122,375 84.7 % 2,127,358,500 36.1 % 93.8 % 824,642,360

WORLD TOTAL 7,012,503,300 100.0 % 2,267,233,742 32.7 % 100.0 % 868,046,520

Source: Internet World Stats 2012 7

Source:Internet World Stats 2012 8

Background to Nigeria’s Telecoms Environment

Nigeria – basic facts• Most populous African

nation with 150m people• GDP of ~$180bn• Over 50 million mobile

subscribers• Regional HQ of major

regional, multinational coy’s in Africa

Why Nigeria?Significant consolidation has occurred in Nigeria’s Internet and broadband sector, from over 400 ISPs three years ago to around 150. New powerful players from the fixed-wireless and mobile network operator camps have entered the market with 3G mobile and advanced wireless broadband services such as WiMAX

Strong signs of growth of Internet users in Nigeria.

• Nigeria’s broadband market was dominated by Nitel until 2006, albeit at a very low level. Other players had a share of a round 20% of a market with only around 20,000 subscribers.

• At the same time the operators are rolling out national fibre backbone networks to support the ever increasing demand for bandwidth.

• Nigeria has one of the largest Internet user communities in Africa, about one quarter of them live in Lagos state.

• Yahoo has an estimated five million unique users monthly in Nigeria, generating over 250 million impressions every month. This puts Nigeria second in Africa after Egypt which has over a billion impressions created monthly.

• Nigeria has overtaken South Africa to become the continent’s largest mobile market with now over 75 million subscribers, and yet market penetration stands at only around 50% in early 2010.

9Source:Mobitel

Internet StatisticsInternet Users & Penetration rate – 1996; 1998; 2000 – 2011 Note: Internet users are those accessing the network from school, university or work, as well as from individual Household or business accounts. Subscribers are those who pay for Internet access.

10Source:Mobitel

Internet Services Providers

Fixed(Fixed Wired & wireless)

ISP(Broadband, VSAT, ADSL)

NitelDirect-on-pc, IPNX,

Swift Networks, Netcom,

Linkserve, Mobitel

Phone & InternetServices

Phone & Internet Services

Phone & InternetServices

GSM: MTN, Airtel, Glo, EtisalatCDMA: Starcomms, Multilinks-Telkom, Visafone, Reltel (Zoom)

Mobile(GSM, CDMA)

11Source:Mobitel

Main One is a communications services company providing open access wholesale international connectivity and broadband capacity to countries in West Africa. Main One built and own the first privately owned submarine cable over a distance of 7,000 kilometres along the West African coastline, with initial landing stations in Nigeria, Ghana and Portugal. The Cable currently delivers high speed bandwidth of 1.92 terabits per second (but has been proven to provide capacity of at least 4.96 tbps) with branching units in Morocco, Canary Islands, Senegal and Ivory Coast. Main One provides open access, wholesale, international broadband capacity to countries along the western coast of Africa.Main One is present at various internet exchange points both regionally and internationally. We are available to interconnect at

Internet Exchange Point of Nigeria (IXPN) Ghana Internet Exchange (GIX) London Internet Exchange (LiNX)

As a result MainOne is able to provide shorter routes, lower latency service and bandwidth scalability at affordable prices.

12Source: Main One Cable Company

Partners for internet Penetration

13Source:Mobitel/ Main One Cable Company

Main One Points of Presence

14Source: Main One Cable Company

15Source: Main One Cable Company

1 Network Infrastructure: National Data Network

Globacom owns a robust infrastructure and is the only operator in Nigeria with integrated domestic and International network.

• Globacom high speed optic fibre network spans more than 10000 km covering almost entire Nigeria. The network covers all the major cities– Lagos, Ibadan, Benin, Warri, PortHarcourt, Abuja, Zaria, Kaduna, Kano, Abeokuta etc.

• The network is configured in multiple ‘self-healing’ rings to ensure error free service.• Besides this, Globacom is establishing a Metro ring across all the 20 major cities of Nigeria.• The backbone and metro rings of Globacom are equipped with Single Mode 96 F Optic Cable

with ITU-T G.652 standard. It is armoured cable for extra protection from rodent.

16Source:Globacom Nigeria

1 Fiber Network

17Source: Globacom Nigeria

1 Microwave Network

18Source: Globacom Nigeria

MTNN’s backbone microwave and fibre optics cable transmission infrastructure

19Source:MTNN

Network Infrastructure

20Source: Phase 3 Telecom

NITEL

21Source:Mobitel

Internet Usage and Growth

Starcomms MTN dongle Multilinks 21st century Zoom (Reltel) Visafone ipNX Swift MTN (VGC)Cobranet (UGO) GLO

470,068

165,000

218,309

40,000

141,266 132,365

25,000

85,000

5,000 20,000

70,000

• Internet usage is growing rapidly.• Existing operators are aggressively expanding even though

quality of service is poor.• Glo sold out 60,000 in one month but was forced to recall

due to poor performance.

22Source:Mobitel

23Source:Mobitel

2012

Source: Informa Telecoms & Media, Sep 2010; mobitel , 201224Source:Mobitel

The Way Forward: Partners

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The Way Forward: Nigeria Broadband Forum

• The Nigerian Communications Commission held the maiden Nigeria Broadband Forum, with the theme “Demand as catalyst for broadband services in Nigeria,” on 26thJuly 2012 in Lagos. The Forum was motivated by the need to deepen internet and data penetration in order to further drive economic and market growth in the country, which will accentuate the level of demand for broadband services that would accelerate nation-wide deployment.

• The Secretary General of the International Telecommunications Union (ITU, Dr. Hamadoun I. Toure encouraged Nigeria to urgently establish and follow through transparent and effective regulatory framework and policy for broadband development in order to achieve massive broadband development.

• The Honourable Minister of Communication Technology, Mrs. Omobola Johnson, in her opening speech, assured the audience of the Federal Government’s support on universal access and national broadband deployment, while advising the NCC to determine appropriate pricing in order to foster affordability of the broadband internet services at the grass root levels.

• The Executive Vice-Chairman/CEO of the NCC, Dr. Eugene Juwah in his keynote address, showcased the NCC proposed workplan and announced the adoption of Equal Access Model to facilitate rapid development of Broadband in Nigeria, noting that this model has been successfully implemented in countries like Singapore and Australia.

Source: Nigeria Broadband Forum 26

Government Policy and NCC Regulation

PolicyThe following are policy considerations for Government: a. Government to provide broad policy framework for

the development of infrastructure that will support the growth and access to broadband services at affordable cost to consumers.

b. Strong government and political commitment towards broadband provision is imperative.

c. Provision of incentives by government will stimulate investments in Broadband deployment similar to the tax exemption granted to GSM operators at the inception of GSM mobile services in Nigeria.

d. Government to facilitate access to low cost funding and financing of long term Broadband deployment loan facility by the Commercial Banks. Government intervention on high bank interest rate is required to encourage investment in broadband.

e. Government to drive the development and creation of local content in broadband service delivery and create a venture capital fund for software entrepreneurs.

f. Build a business case with states and local governments to stress the need and importance for right of way for the provision of telecommunication services in a mutually beneficial approach.

Regulatory

Economic, Legal and Regulatory framework to facilitate Broadband national growth include:

a. NCC to provide incentives for broadband deployment and penetration in Nigeria.

b. NCC to address Spectrum congestion through variety of available options.

c. NCC to facilitate infrastructure sharing for efficiency through innovative models.

d. 4G frequency spectrum will need to be licensed by 2015.

e. Develop innovative spectrum optimization and harmonisation scheme.

Source:Nigeria Broadband Forum 27

DEMAND DRIVERS, COMPETITION AND TARIFF

a. Government to drive demands for Broadband Services through extensive use of the internet and on-line data services for immigration services, Company Registrations, Tax filings, Customs and Excise Duties Services, contract administration, Universities Admission processes and selections, etc.

b. Demand for Broadband identified in the various multi-sectors such as; health, e-commerce, education, aviation, banking, maritime activities etc.

c. Need for regulatory framework to drive competition and sustainability in the various layers of the proposed model.

d. Stimulate content demand through innovative applications, services and products. e. Increase in Broadband infrastructure will drive innovation for new businesses and SME growth. f. Different categories of services should be developed to suite the different needs of various customers. g. Broadband would facilitate the growth and availability of innovative and evolving ICT services which will

increase the national GDP. h. The rapid deployment and availability of broadband will lead to the introduction of innovative services. i. Deployment of digital on-line services in at least 20 Government ministries by first quarter 2013 will

increase demand for bandwidth. j. Need to bridge the huge demand gap for broadband services in Nigeria. k. Connecting homes to Broadband

Source: Nigerian Broad band Forum 28

What is 4G?

The 4G

Developed as a narrow band analog mobile technology that facilitated voice calls

1G

2G

3GA narrow band digital network that provided digital data services as SMS and Email

Provided multi-media support features, spread spectrum transmission and increased data transfer speeds

1981 1992 2002 2009

29Source:Mobitel

Emerging Trend for Wireless Broadband

Source: Informa Telecoms & Media, Sep 2010, Mobitel30Source:Mobitel

THANK YOU ALL

Acknowledgement

I am deeply grateful to Ken Esenwah of Mobitel Nigeria for materials used in this presentation. I also thank the management of glo, Main One Cable

Company, MTN, Mobitel and Phase 3 Telecoms for the the network maps that were used in preparation of this presentation

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