Interviews

 

Perhaps never before in the history of nations has the issue of identity been as crucial as it is today. From Africa to America, Australia to Asia and Europe, how well or badly each country in each region has fared has depended largely on citizenship identity management. Stressing that Nigeria stands on the threshold of a new epoch in its identity management, the Director-General of the National Identity Management Commission (NIMC), ENGR. ALIYU ABUBAKAR AZIZ, responded to journalists’ questions on the Commission’s current focus aimed at delivering a world-class identity ecosystem for Nigeria:

 

Why is NIMC pushing the National Identification Number (NIN) now more than the ID card?

The focus of the National Identity Management Commission (NIMC) for the next three to five years is on the National Identification Number (NIN) and not on the National e-ID Card. We want to make the NIN understandable, acceptable, applicable and appreciated by Nigerians, as an important and intrinsic aspect of their entire life, rather than a physical card, which can be discarded while the number is for life.

Before now, we were focused on the Card but after the country went into recession, we decided to emulate other developed countries like the United States, which issues the Social Security Number, the United Kingdom, with the National Insurance Number; and India where they recently enrolled about 1.4 billion people and issued them the Aadhaar. In all these cases, the emphasis – or perhaps I should say the only thing in focus – is the number.

However, this does not mean that we won’t issue the cards, because it is there in our Act (NIMC Act, 2007) that we should issue a general multipurpose card to all registered Nigerians; therefore, we recently gazetted some regulations that will ensure participation of private partners in the Card personalisation services in order to handle the printing of the outstanding cards; but funding is a challenge.

Also, the intention of the Commission is to develop the identity ecosystem with all data collecting government agencies and licensed private agencies, in order to capture additional 50 million records by the end of 2018.

 

What advantages, if any, does having the NIN confer on a citizen?

The NIN bequeaths citizens with a lot of privileges and benefits. And like most modern economies where the national identity number is a national token that gives citizens access to government social interventions, the NIN also grants citizens certain rights as regards financial access, credit facilities etc. Mind you, in the case of the US, UK and India I mentioned earlier, like other advanced economies, a citizen can’t access any social services such as health, insurance and so on, without the requisite social security number; the number is indispensable.

So, here in Nigeria, the NIN facilitates interactions between citizens, the Government and private sector institutions thereby promoting socio-economic and political development.

Since citizens enjoy a “one-person-one-identity” for life, the NIN therefore enhances citizens’ participation in the political process, enables citizens to exercise their rights, facilitates management of subsidies and safety net payments, Internally Displaced Persons (IDPs) management and facilitates service delivery in Ministries, Departments and Agencies.

It also enhances the work of law enforcement agencies, e.g. public safety, policing, national security and border protection, and eliminates ghost and multiple identities, etc.

It also enhances the ability of citizens to assert their identity, have access to credit from financial institutions, protects citizens from identity theft – an antidote to identity theft driven frauds which expands access to other financial services including insurance.

The NIN enhances e-commerce by providing a means of payment as it is a tool for non-repudiation and security for financial transactions. It facilitates financial inclusion, hence the advancement of a cashless economy.

In security circles, the NIN is an important tool for the fight against corruption and terrorism; and finally helps launder Nigeria’s image abroad, amongst many others. So you can see that the NIN is multifaceted in utility.

 

What role does the NIN play in Nigeria’s planning and security situation?

With the NIN, all citizens enjoy a “one-person-one-identity”, which allows the government to search for an individual and all of his/her details either for planning and or for security purposes.

Government can query the database to ascertain how many unemployed individuals are in the system at Federal and State levels, the genders of those individuals, their occupation, skillset, age bracket, location, etc. This will assist in planning for resources and benefit administration. As you know President Muhammadu Buhari has just signed the 2018 Appropriation Bill into Law; the NIN is a very useful and powerful instrument in assisting the governments – at all levels – budget appropriately for the citizenry, in the proper and effective allocation and spread of scarce resources.

On security, the relevant government security agencies are part of the National Identity Management System (NIMS) project from inception and have access to query the system using biometrics, etc to confirm individual’s identity.

Therefore, as soon as the National Identity Database is fully populated, all federal, state, and local government agencies as well as the private sectors can access the verification platform of the Commission, for different purposes, depending on the level of access granted to them by NIMC.

 

With the national elections of 2019 almost here, how useful will the NIN be for INEC and the electorate?

As I said earlier, we are still harmonising data with all data collecting government agencies, as well as concluding plans to start the ecosystem approach which will see all government agencies and some licensed private sector companies collecting data and sending to the NIMC as the sole repository of biometric data.

This is expected to shoot up the record in the NIMC database by a huge percentage. Once we have a good figure, then INEC can leverage on the NIMC Database for electoral purposes.

The plans already on ground for this year include accelerated deployment of enrolment Centres in all Local Government Areas across the 36 States and the Federal Capital Territory, and enrolment of all Nigerians and legal residents including children. Perhaps you know that children from birth can now be enrolled; this is a point that Nigerians should be aware of, especially with several babies being born across the country daily. Parents will do well to avail themselves for the benefit of the new-borns of this window of enrolment opportunity that is now uniquely available.

 

What are those social services that the NIN has become mandatory for?

Pursuant to section 27 (1) and (2) of the NIMC Act, 2007, transactions including, applications for, and issuance of an International Passport; opening of individual and/or group bank accounts, all consumer credits; purchase of insurance policies; the purchase, transfer and registration of land by any individual; National Health Insurance Scheme, such transactions that have social security implications, registration of voters, payment of taxes, and pensions, etc., will be done with the NIN.

With the recent gazette and publication of the Mandatory Use of the National Identification Number (NIN) Regulations, 2017, the Commission will on a later date, begin enforcement of the NIN for these transactions and more. Our advice to Nigerians is: do not wait till you have to, go out there and be enrolled before you have to through enforcement, because then you will have to experience crowds and delays.

 

NIMC has enrolled just 30 million Nigerians so far; with a population of 180 million to 198 million, what is NIMC doing to fast track enrolment?

We currently have about 30.5 million data in the database with the figures growing daily. The gradual acceptance of the NIN as a means of identification by our partners and stakeholders is also driving up the numbers by the day.

For examples, organisations like the Federal Road Safety Corps (FRSC), Nigerian Immigration Service (NIS), National Hajj Commission of Nigeria (NAHCON), Federal Capital Territory Administration (FCTA), and so on have all made the NIN a mandatory requirement for service delivery. Others are expected to follow suit.

On our part however, we have commenced aggressive and massive awareness campaign in all the states and the FCT to mobilise people for enrolment. We are also working closely with the National Orientation Agency (NOA), the Federal Radio Corporation of Nigeria (FRCN) and other media partners with a special target on the grassroots, and it will continue for a long time, particularly with the ecosystem approach being canvassed by the World Bank and its allies.

Also, we have the mobile enrolment equipment which goes to some of the riverine and difficult terrains in the grassroots areas; and a good number will be rolled out by the end of this year.

 

Is there any hope that the entire Nigerian population will be enrolled into the National Database?

Yes, of course! However, enrolment of eligible citizens and legal residents into the National Identity Database (NIDB) is an on-going and continues process. In other words, there is no limited or specific time frame for all citizens to be enrolled and issued the NIN, because even after enrolling all citizens, there will always be new ones such as new born babies, etc.

According to a recent World Bank report, Nigeria adds seven million into the population every year; that is the size of Rwanda as a country. This means that there will always be enrolment year in, year out. So it is a continuous exercise and the Commission is poised to carry out its mandate to the letter.

NIMC, by design has offices in all the 774 Local Government Areas (LGAs) and maintains active presence with enrolment centres in over 930 locations across these LGAs. More so, we are working to open more enrolment centres and take enrolment closer to the people, especially the grassroots.

 

What are the challenges that could delay the quick enrolment of the remainder of the population which is obviously the greater number?

Well, the cynicism from the experience of the past was/and is still a big challenge. However, we are gradually moving away from that problem as more Nigerians understand the difference between Card issuance and Identity Management.

Secondly, the high cost of opening and managing the Enrolment Centre because of needed stable power supply, active internet connection, low morale on the part of staff because of poor salary structure, the ‘expectation gap’ of “Card” issuance, are other challenges. However we are slowly moving past these challenges as we ramp up more data into the database.

As citizens, what is the responsibility of Nigerians in ensuring they are enrolled?

It is a National call, and all Nigerians are obliged to respond. The government has provided the opportunity, this platform for enrolling into the National Identity Database, to make life better in a modern, well managed and planned manner; the NIN gives the citizens that assurance. So, if the government has done so much, and all the citizens are required to do is to go out and answer the national call, does anyone have any excuse not to answer the call?

 

 

The country’s telecommunications sector has grown by leaps over the years, however, modifications to policies and enactment of new policies continue to drive further development in the sector. The Clearinghouses are meant to serve as links or bridges for effective termination of calls and provide a platform for all operators. In this interview with CHIDIEBERE NWANKWO, the Managing Director of Interconnect Clearinghouse Nigeria Limited, ENGR OLADELE AYANBADEJO, talks about himself, the company, the challenges facing the sector, and way forward.

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How Big Would You Consider The Market space for Interconnect Clearinghouse Nigeria Limited  (ICN)?

The market space for ICN had always been there. From my experience, because I worked extensively with NITEL, we were their contractor, the interconnectivity of the various operators was provided by NITEL. And when NITEL went under, this vacuum was there. And this vacuum was what ICN came to provide, to provide the connectivity for the various operators. And another thing which it does is that, for new entrants, it makes coming into the telecommunication arena simpler and easier. You can imagine, people get what we can Private Network Licenses for specific areas; they have subscribers who want to call all the networks in Nigeria, what it means for them is that they need to make connectivity with every other operator. So for them the connection to ICN, one single connection, takes them everywhere. And for us, we are independent, meaning we are not affiliated to any of the telecom operators, in the sense that we don’t have shares or interests in any of them; al we do is that we provide a seamless interconnectivity with them. So we don’t have any reason to make one of them look bad, we only provide interconnectivity for them.

We are the largest, I can tell you. We have all the MNOs, we have PTOs, we have all the ISPs and this is not common practice with our competitions. We are the largest in terms of the number of people that have access to our network, and we have spectrum. We have multiple switches, we have five Switches in Lagos. I don’t know what others have or how many they are doing, but in terms of clout, I know we have an edge over all our competitions.

What Will You Consider The Greatest challenges Facing Clearing Houses?

The greatest challenge facing Clearing Houses in Nigeria is patronage. Our regulator in its wisdom established the Clearing Houses. It is like you open a shop, and stock up and nobody is buying from you. We have invested so much money in this, we actually want to expand to more locations; but we need to sustain what we already have. We have the capacity to handle close to 100 million calls per day, but we are getting less than 10 million calls per day. So, our utilization is less than 10 percent of our installed capacity. According to what NCC says, we need to have more spread. But how do we have more spread when we don’t get patronage.

The thing is that the operators, majorly the mobile operators, continue to come with the excuse that they spend money to interconnect with themselves. When NITEL went down, NITEL used to do the interconnect for them, but over the years, we have taken the business over. So they need to send more traffic to us so that we can invest in more areas. All they need to do to drive this business is to draw a KPI target in an SLA. And we will work with it. So the biggest challenge we have is patronage.

There is a mandate from NCC that the operators pass 10 percent of their traffic through Clearing Houses. But the ambiguity of this is this, what is the 10 percent of the traffic? You must have a view of what the hundred percent is, to be able to know what the 10 percent will be. They pass some traffic through us and when you ask they will say the other traffic has gone to the other Clearing Houses. So, you need to have a summation of all the traffic they pass through the Clearing Houses. And after this, you have the summation of what is available for you to know if they are actually passing the 10 percent through the Clearing Houses.

Let me give you a brief about this. It is a commercial decision. Where we are having challenges with the mobile operators is that the Clearing Houses are constituting an additional cost to them. If the termination from one network to another is N3.90; if they pass their calls through the Clearing Houses, they are supposed to add 55 kobo, which is our transit fee to it, so it has now become N4.45 for the same thing that when they connect peer-to-peer, like MTN-Airtel, they pay only N3.90. What we are asking the regulator to do is this, make the Clearing Houses a least cost route. If they pass through us, let it be like N3.00, so that when we add our 55 kobo, it will be N3.55.  With that, we are cheaper than the peer-to-peer cost. It is an economic decision for them to pass through the Clearing Houses. They need to make the Clearing Houses a least cost route. You can give a mandate tomorrow of 20 percent, the operators will feel you are making them pay additional money coming through the Clearing Houses. But if you make it an economic decision in such a way that this side is cheaper for them, what will happen is that we will all sit down and define a Service Level Agreement (SLA) in which they will state at least 10 Key Performance Indicators (KPI) and say I want this, I want that. And we can distribute their traffic to reduce their utilization concentration. With this patronage, we can make more money and we can invest more.

When PWC came around collecting data from operators, we gave them and told them what we wanted. But when the NCC came out with the position, we were shocked at the position they came out with.

One thing which I see, because of my expertise and experience working overseas, is that Nigeria is a unique place, some of the people you are asking to do this evaluation for us have no inkling or idea about the way Nigeria is. It’s like the way our politics is being run; some people don’t understand the way Nigeria is; when we talk about stakeholders, you just sit down somewhere and take decisions, you don’t carry along the people that will make those things work, then that decision is dead on arrival. So when the NCC presentation was made we asked them, where is the Least Cost Route? And there is nothing like Least Cost Route there.

Interconnect Clearinghouse was the first to be licensed. And in their wisdom, they licensed more, but that is okay. And the operators agree with us on the least cost route. They know it is better because we are a neutral ground. And one thing we have always told NCC is that whatever data these people are giving you, compare it with the data we give you and you will get the true position because we have no affiliation with any of them. This is because when a network wants to make the other network look bad, they know what to do to achieve that. Even when they want us to look back, they can do what they call ‘call gapping’ and the calls we send to them will keep bouncing back. This is where the regulator needs to put its feet down.

For instance, in Iraq, mobile operators do not interconnect to each other at all.  They connect through the government, there is a government switch everybody connects to. If you are coming from other countries also, you connect to the switch and you are interconnected. The operators only connect directly to their local subscribers. Government is able to monitor everything going on.

NCC needs to take a definite stand on this. The operators are in for business, and to be fair to them, they have invested a lot.

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What is ICN’s Market Competitive Advantage?

Part of the things we are providing for them, which a lot of people don’t know, is Gateway. From Legacy to NGN (Next Generation Network). There are a lot of people in Nigeria today that still have old equipment. They want to connect to NGN. They are coming from TDM and connecting to IP networks. Clearing Houses are doing this for them. I can tell you, Smile they are connecting Voice Over LTE, but they are able to call other networks, and we are doing that translation for them here. First, they come with jumbo packets, those packets we cannot convert to the smaller packet, but we ask our Switch people, our vendors and they say they can do it. In the beginning, Smile was not able to connect to smaller operators, but now they can. And we are doing this for them. If Smile have to do this, they will have to do it with so many other operators. And these are the investments we make. My challenge is that NCC is not seeing this, and they are not looking at it that we are a purely Nigerian company and when we expand we employ more Nigerians. Interconnect Clearing House, we are not just a Clearing House alone, we are also doing hosting. We are providing hosting services for Value Added Services operators because a lot of them want to connect to the mobile operators. But is VAS operator comes to MTN, they will say go and bring your server and put it in my location, and if they want to do with Airtel, Airtel will say the same thing. Some of them, their revenue is not up to N100,000 and you want them to buy a million naira server and put in three locations. But if they have a server here, we provide connectivity for them to all the networks. And their server in here can be managed remotely by them at home. We have connectivity to all operators.

What Constitutes Barriers to Growth In This Industry?

The biggest challenge we have in Nigeria is this thing we call competition. Competition is the greatest barrier here, and it is the biggest barrier restricting innovation. What we need to understand is that collaboration means that there is an area where you are good and there is an area where I am good and we can share.

Our challenge is competition, everybody is sitting in his own compartment, and doesn’t want to share what he has with the other person. This is what is really impeding the growth and spread we want. I will give you an example; the connectivity from Lagos to Ibadan. The connectivity is mostly along that road, but what stops one company from doing Lagos-Ibadan expressway, and another company do Lagos-Abeokuta-Ibadan, and another company do Lagos-Epe-Ijebu Ode-Ibadan; they spread down the transmission capacity on that road; I give you small capacity, you give me small capacity in such a way that they have a seamless connection.

Now Julius Berger is doing that road and by the sides of the road, if you look, you will see the fibre optics hanging on trees, they have dug out the fibres, and all these investments gone.

The thing is that where we are able to do well is the area of shared risks. If we can share the risks, and the end users have excellent service, they don’t really know how we do our thing, how the routing is done or how the things are happening, you don’t really care, all you know is that anywhere you are you have LTE service. Whether MTN capacity is passing through MainOne or Airtel is passing through Glo, or any other way, you don’t really want to know, you just want to have service. And this is why telecom service is still very expensive in Nigeria.

From my Masters’ study, once you do more than 200km of fibre, you need at least 18 months of continuous revenue, of at least 50 percent of the capacity to break even. But the problem is that you will hardly get up to six months of your fibre being underground without it being damaged or something. Nigeria needs to have a master plan for fibre infrastructure.

If You Are Asked To Change Or Modify A Policy, What Policy Will It Be?

It still comes down to creating a level playing field for players in the industry. The challenge we are having is the monopolistic tendencies of incumbents, which is impeding new players or not allowing innovations to really go round. It is our regulator that needs to look at this holistically.

What Other Career Would You Have Chosen If You Didn’t Have A Career In ICT?

This one is not difficult for me to answer. Because of what formed my mind of going into telecommunications, there are two things that fascinate me. Telecommunications is one of them, the other one is flying. I know probably I would have been a pilot, but my mother refused. I wanted to be, I nearly got taken by Bristol Helicopters, even though I passed all their interviews, but my mother insisted, “you went to school and studied to be an engineer, and that engineer is still there”. Actually, when I left secondary school, I was supposed to go to the NDA to train under the Air Force, the sentiment then was that ‘we don’t want our child to be a soldier’, that it was drop-outs that go into the military.

When I came back from the university, my brief stint in Warri, when we go off-shore with Bristol Helicopters, I still get fascinated with flying. One of the best things I enjoy about flying is that when I am up there because I like sitting by the window, I can tell you the routes the planes take, things so many people don’t care about.

If I could have been anything else, I would have been a pilot. I still keep track of things happening in the aviation industry.

Where Did You Start Your Career?

I studied Electrical Electronics Engineering in Nigeria’s oldest University, the University of Ibadan. What made me study Electrical Electronics Engineering is not an accident. Ever since I was very small I had been fascinated by telecommunications. The thing that actually formed my idea of coming into telecoms was when I was small, my father took me to an event, a television event of the landing of the Americans on the moon. I was with my elder brother and I was sitting on his neck, there was only one TV set and the place then was Cocoa House, Ibadan. I was very fascinated.

All that night I would sit outside looking at the sky, wondering if I would see them. How that fate was achieved was something that marveled me. Even till date, I am still so much interested in space and space travel. So, you can see the reason why I eventually ended up with Electrical Electronics. And in Electrical Electronics we have various segments, there is the Power Systems, there is the Communications, there are the controls, but I chose Communications because it had always been my love from the beginning.

Although I worked briefly in Warri, Delta State, I actually started my career after Service, with global giants, Siemens. I worked as a Commissioning Engineer for transmission, which is now known as Transport Network for Siemens. I specialized in Microwave Transmission and optical fibre.

Mr. Bisi Adegbuyi, a lawyer and a professional politicians, now the Post Master General of the Nigeria Postal Service (NIPOST) recently granted eBusiness Life Magazine, an interview that bared the plans, prospects and challenges of the organization. NIPOST, while waiting for the passage of the Postal Reform Bill, has set already set plans to success and profitability in its social services. Mr. Adegbuyi throws more light.

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What is the current state of NIPOST

What remains to be done is that partial commercialization of NIPOST, which is out of my purview because it involves the Presidency, the National Council of Privatisation, and all others. And then, passage of the Postal Reform Bill in the National Assembly, again this is outside my purview. But in terms of restructuring for operational readiness, modernisation, transformation, all geared towards professional efficiency, we have done that and we are doing that.

When the Postal Administration decided to restructure its activities, its product, and therefore created six commercial business groups, and financial services was just one out of the six commercial business units. Under the financial services architecture, you have Agency Banking, Remittances, Mobile Money, and others. And based on the United Nations Sustainable Development Goals, we have the Financial Inclusion Initiative. And in line with our determination to occupy the driver’s seat in the financial service journey, we have come up with new innovative and game-changing products that are aimed at deepening financial service. One of such is the Electronic Money Order, which by the admission of the Universal Postal Union, is unique and novel. For us it may not be novel, because The Post from time immemorial had been involved in money transfer based on what we called Money Order of old, but because of the disruptive nature of technology – I remember when I was in the secondary school, any time anyone had a registered letter, it meant that there was a Money Order sent to him, to be redeemed at the post office – Now, because technology, disruptive as it may be, although offering unbelievable opportunity for a smart postal administration. We have decided to leverage on technology to create what we call Domestic Electronic Money Order. This means that money can be transferred locally, from any part of the country using the wide network of the Post Office, although electronically.

One of the major issues confronting countries all over the world is poor addressing system. 70-75 percent of the world is buffeted by addressing challenges, so it is not peculiar to Nigeria. And we have vision and mission and determination to change the trajectory of the post. We have commissioned Nigerian experts, young men and women, to come up with a solution for digital addressing system. We are not unmindful of the fact that in spite of the challenges aforementioned, we still have some addressed that we used to deliver mails, packages, packet and all of that. So there’s a responsibility for us to ensure that no matter how insignificant that percentage is, those addresses must be verified. And then we came up again with an innovative product that is called NIPOST Address Verification System. As a postal administration, NIPOST is determined to leverage on evolving technologies in order to compete favourably with other postal administrations in the world and subscribe to what we call global best practice.

When I became the Post Master General, coming from the background of the private sector and a politician, I thought there will be a need for me to use the post to create wealth and reduce poverty. I never knew that was the intention of the financial inclusion, but I just thought that I set this mandate for myself, and I began to think of how to actualize same. And that got us into thinking that through this Address Verification System, we can leverage on ICT and create e-Employment. So we entered for a project sponsored by agencies of the United Nations, International Telecommunications Union and World Summit on Information Society, in the category of leveraging ICT to creating employment. And we won the price on March 21, 2018.

With this initiative, we will engage the services of unemployed men and women, boys and girls, who have ordinary smartphones, who will become our Address Verification Agents by using their smartphones to verify addresses, including live photos, and using our App it will be uploaded to our database. And each person will earn between N100, and N150 per address verified.

Again the Central Bank of Nigeria has awarded NIPOST the International Money Transfer Operator License, which means NIPOST can now play in the remittances ecosystem, where the World Bank reported that 2017, Nigerian migrant workers in diaspora remitted a whopping $22 billion to Nigeria. At what cost? 9.5 percent. Which is high in our opinion. One, this is because the Post is not involved. Two, the reach – when people send money, our migrant workers from all over the world, they use Money Gram, Western Union, as the case may be, which are limited to where the banks have presence. But the truth is that these remittances are mainly meant for the rural poor. And that’s why we need to get the Post to be involved so that not only that we will bring down the cost of transaction, but we can also increase the reach. Any beneficiary in the rural area wouldn’t go to the urban or semi-urban area to go and collect his money. He could go to any nearby Post Office, cash in and cash out, wallet or open an account there.

We are just starting, and we are taking it one step at a time. Ideas can be encapsulated or put in a book, but the implementation and the operational readiness of such ideas is what is important.

So, in the next few weeks, we will go live with our remittances, we will go live with our Domestic Money Order, we are also going live with the integration of the big e-Commerce giants into our shipping API where we can do deliveries for them. Don’t forget that the major challenges of shipping companies in Nigeria is cost. They spend about 30 percent of their revenue on cost. And if we can assist in delivery and reduce that to maybe 10 or 15 percent, that will be good news for them, and good news for NIPOST, a win-win.

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How will the youth benefit from the restructuring of NIPOST, especially in the area of employment?

Because we have not formally launched this initiative, we are training our people, the technology is ready, but we also know that the deluge of Nigerian youths, unemployed people, wanting and wishing to be our Address verification Agents, will be much, so we need to put our house in order, we need to do our homework well. We have figured it out, it is workable. Our intention is that each Verification Agent will be able to make more money than an Uber driver.

We need to get the stakeholders to buy into it – the Central Bank of Nigeria, the Nigerian Communications Commission, various financial institutions, Federal Road Safety Corp, National Identity Management Commission, and a host of others, simply because they are interrelated and interwoven. Under the KYC, Know Your Customers, the statutory responsibility of banks and financial institutions is that they are supposed to know where their customers reside. They should verify their address. But you and I know what the position is now. And the identity we are talking about, identity will be meaningless without tying it to a specific address. So we have also developed a solution that will assist us, or we can leverage, in not only verifying addresses, but we will also be verifying identity. We are leveraging on evolving technology in order to render services to Nigerian people.

Is there a timeframe for these projects?

The truth of the matter is that we are going live with some banks in the next few weeks. But the issue of getting stakeholders to buy into it is not something I can be magisterial about, I can’t take decisions. But the people who have voluntarily bought into it – Eco Bank, Keystone Bank and one or two other banks that we are in partnership with, regarding Agency Banking. And the truth of the matter is that most financial institutions are asking us to verify address for them. But what will open up the floodgate, when the Digital Addressing System is ready, the prototype will be ready in another one or two months, wherein you will just download our App on your smartphone, and wherever you are, a digital address will be given to you. We have succeeded in dividing Nigeria into 330 billion 3 X 3 meters space. Which means even inside the water there will be addresses. The Digital Addressing System encompasses States, Local Governments, Post Code and unique identifier – three or four numbers. However, we need to streamline it, so that people won’t embark on indiscriminate claiming of addresses. We may have to ask an individual to first pay for the verification of the address, a token. Once you pay that token, the address automatically becomes yours. In order not to put the cart before the horse, the existing address, 10 to 15 percent we will continue to verify them as we have requests and offers from necessary stakeholders. But it is the primary responsibility of the government of the Federal Republic of Nigeria to give addresses to its citizens. Not only that, it is a massive national infrastructure. It is a bridge between government services and the citizens. And these are some of the things that we believe that in the next two to three months we will come up with.

With the Stamp Duty imbroglio, it is obvious that sensitizing consumers are key to the success of the projects NIPOST will undertake. How well are you carrying the consumers along?

Speaking to the consumer is a function of when you are ready when you go live, you do piloting, so that where you have challenges you correct them before speaking to the consumers. Otherwise, you will be putting the cart before the horse when you have not perfected your act. I know the importance of media advocacy, and there are some laws that we also need to get past. Don’t forget that when you talk about technology, our laws are obsolete. We don’t have laws for some of these technologies, for example, before electronically-generated bank statements became admissible in the court of law of Nigeria, Nigeria Evidence Act had to be amended. By the way, I am a lawyer, I’ve been one for 31 years. Now, electronic stamps, which is also an innovation. I am aware you are aware of the controversy surrounding touching and concerning stamp duties. For the purpose of this discussion and to put issues in proper perspective, what we collect is stamp proceeds, we don’t collect duties; we are not a tax collection agency. So, we also need to amend the Stamp Duties Act in order for you to be able to deploy your solutions for electronic stamps, which will automatically dispense electronic stamps when people do transactions online or Point of Sales. You know e-Commerce is big, and Nigeria is the biggest e-Commerce market in Africa. These are the areas where NIPOST is set to make money and positioned to make money.

 

How will you facilitate technology drivers and data hosting?

That’s why Galaxy Backbone is there. And that’s why we have private organisations – Rack Center, MainOne, and others. We have not started the collection, but naturally a sister organization/parastatal is Galaxy Backbone. We have also been advocating Agency collaboration and have we call shared services as opposed to operating in silos. It doesn’t make economic sense for NIPOST to embark on capital expenditure on having its own data centre, when you have a sister agency that has it and you can just rent space wherever they have it.

When we say technology not defined, we are simply talking about internet penetration. Wherever you have any of the mobile network operators working, you can carry out a domestic money order. It doesn’t need too much data, because you are not downloading heavy pictures. Wherever you have mobile telephony, you can carry out some of these innovations.

The starting point is for great facilities. As a businessman you are going to invest in areas where you will make money from. But we also have what we call Universal Service Obligations because whether you like it or not, post matters remain social services, especially those basic ones. Your guess is as good as mine, the financial state of NIPOST. We don’t take subvention from the federal government, but the government pays the salaries of the staff, so in a way that’s subvention. Again, we carry out postal businesses where they are not commercially viable. That’s what we call Universal Service Obligation, which is more or less, subsidy. If you don’t have the money, you need, first of all, to think outside the box and introduce new innovative game-changing products that will bring money. And that’s what I’ve done. NIPOST of the old was a mono-product organization, just mail and EMS. And you need to upgrade the facilities in the urban areas where they are making money before you start thinking of the rural areas. And Nigeria is a massive country, so you must do these things in phases. If you start it all over Nigeria, that is a recipe for failure. And my business orientation and experience will not allow me to do that. It doesn’t even make any economic sense. Therefore, naturally we know we have to upgrade facilities, but we must stagger it, it will be in phases.

With the passage of the Postal Reform Bill, it is obvious that NIPOST government may drastically reduce subvention to the organization. If that happens, how will NIPOST manage money generation?

There are various ways of making money. For instance, the Address Verification System, we are going to make money from it. If our projections are on point, we will make more money than we have been making on EMS, which is our cash cow. Millions of addresses to be verified. It is the social responsibility of those that want addresses to be verified to pay for it. Banks will pay, Telcos will pay. Telcos must verify the addresses of their customers when you are giving them new SIM cards. Electronic Money Order, we will earn money from it. Electronic Stamp, which people erroneously and controversially refer to as Stamp Duties, is a money spinner. We will have a percentage of that because there’s a cost for us for printing stamps manually, and there’s a cost for technology or deploying electronic stamps. e-Commerce, when you do delivery for people, you are going to earn money. Becoming a multi-product organization will necessarily create new income streams and avenues, so we will have money to upgrade our facilities.

The e-Government services will come in ideally when we give people addresses, when we are able to also authenticate and verify the addresses. Before you render services to somebody, first and foremost you should know if he is a Nigerian; secondly, you must know where he/she stays. That, in terms of priority. In equity, we say a man must be presumed to be just before being generous. We need to get this organization going, and making a profit, and then assist the government in making services available to the people. One of such areas of again is the National Cash Transfer Scheme of the federal government, which is more or less a safety net for the vulnerable and the weak in the society. We are the experts and we are better placed for what we call Last Mile Financial Services Delivery because the people you are going to give the money to are scattered in the rural areas where the banks are not there, where the agents that want to distribute these monies don’t have a presence in, but we have a presence all over the place. We have been engaged, we will soon be engaged to be part of the distribution of the money. People who won the bid, expectedly to transfer the money, are also coming to us because we have a solution that is called Bulk Payment Solution. Our GPOs all over Nigeria have strong safes if you want to pay cash, but we are actually discouraging that because of the Cashless Policy of the government. That’s why you can terminate some of these monies into Wallets, into Money Order. And we are also talking to some of these card producing companies into producing cards for our people. And the icing on the cake, as corroborated by the President of Nigeria when he went for the Commonwealth Heads of government meeting, 60-65 percent of the population of Nigeria consists of youths, transiting to 70 -80 million people. These people don’t patronize the Post, because we don’t give them products that will excite them. So, we have to come up with what we call Post YES – Post Youth Engagement Strategy, which will make Post Office attractive to the youth, increase traffic to the Post. How do you engage them? Through this simple device, digital engagement. So, we think more of digital products now, which we would be offering to the Nigerian youths via this phone alone. And I am sure they are going to subscribe to it.

What is NIPOST doing to bring its staff abreast of new developments in the organization, especially in the area of Staff Training?

Recently we had zonal retreat because NIPOST has been restructured into seven zones, where the foot soldiers have been brought on board.  Training is a continuous process. I have been in this seat for 18-19 months ago. The address verification scheme that I’m talking about, experts are training our people. Part of the scheme we are looking at is that when we are recruiting new people who are replacing people who are exiting, people who are retiring, we give some training, a new orientation. They will go through an onboarding process where management, human resources experts will train them. We will also second them for an internship with some of our partners who are technologically driven. Obviously for us to have won this award, we must have some partners who have sound knowledge in technology, these people will train some of the people we are talking about who will come into the organization and train others, meaning train the trainer.

What will NIPOST look like with the Postal Reform Bill?

Postal Reform Bill is about the partial commercialization of NIPOST, which the National Council on Privatisation and Bureau for Public Enterprises are driving. It is also to attract foreign and local investment into NIPOST. Obviously, when you diversify, you come in new products, you need additional hands, which means that you need people from the private sector to come and join you. Another issue is that naturally, it will then give us an opportunity of harnessing our real estate property that we have everywhere. So, until the Bill is passed, we cannot do all these. These are some of the benefits of the Postal Reform Bill.

NIPOST should not be afraid of competition. That is why we are also surrendering our regulatory power. When they pass the Postal Reform Bill, NIPOST will cease to be a regulatory authority for courier companies, because we are also involved in it. That is a way of encouraging us to be competitive so that they don’t give you some kind of government protection and you become kind of lethargic. Your business will not be a sustainable one if you embark on that model.

The government will set up a new regulatory authority, and it will be the responsibility of government to get the people that will drive it. That is what is being done in other jurisdictions of the world.

 

 The Future NIPOST

What NIPOST are we to see in the next 18 months when these products come on stream? It will be NIPOST that is innovative; a NIPOST that is customer-centric; that will ensure that the customers that patronize us have pleasant experiences so that there will be multiplier effect; a NIPOST that will realize its responsibilities; a NIPOST that will give addresses to Nigerians. The last 25 years we have not been able to do that. I don’t like to blow my trumpet, we don’t like to blow our trumpet. We want Nigerians, particularly the critical Press, to look at what we are doing and then say “this is NIPOST of today, NIPOST of the future”, it is a NIPOST that will be globally competitive. I want to give FedEx and DHL a run for their money because they don’t have our reach. As we speak today, in terms of volume that we carry or we send from place to the other, none of them has our volume, but we charge abysmally low price because we have been subsidizing. When we improve our processes and deploy technology, there will have to be a time when we will hold the bull by the horn. Even if we are not going to charge commercial prices, we should be able to break even. And one thing that we have done is that for the first time in the history of this organization, the International Postal Service (IPS) latest version 2015 Track and Trace, we have installed.  Which means you can track and trace your parcel, your packages online real-time 24/7 from the comfort of your home, your offices. It cost money but we believe that we are getting ready to charge commercial rate.

We are going to have our own e-commerce platform, which is called NIPOST Mart, basically to deal with locally produced goods. We want to assist owners of medium and small enterprises in showcasing their products, a lot of them don’t know how. Again, we have entered into a memorandum of understanding with the Bank of Agriculture, which is a way of assisting farmers in the rural areas with storage, new techniques of planting, where you can sell your products. Information, as you know, is power.

As a federal government arm with all these laudable projects in the waiting, will funding be an issue to actualizing this dream?

Funding is a major challenge. For any organization, it will always be a major challenge. And I think I made reference to it that while waiting for the enabling laws to be passed for us to unlock the opportunities in electronic stamps, e-Commerce and others, we are also coming up with other products that will earn us income. So, funding is a challenge, but we are not sitting back helplessly, we are also thinking out of the box to look at other possible areas of money making.

 

 

Over the years, Computer Warehouse Group, Plc has grown from a small integration company to a one-stop shop for all IT needs. The company is still looking forward to becoming pivotal in solving IT needs around the sub Saharan Africa. In this interview with CHIDIEBERE NWANKWO, the Group CEO of the company, Mr. JAMES AGADA throws more light on the company’s vision and mission; and gives an informed insight into what the country should pursue as Local Content in ICT, among other issues.

 

How will you introduce yourself and the company?

I am James Agada, the Group CEO of CWG Plc formerly known as Computer warehouse Group Computer warehouse Group Plc comprises of three (3) major subsidiaries companies, namely – Computer warehouse limited, ExpertEdge Software and Digital Computer Communications. ExpertEdge Software was the software arm of the then Computer Warehouse Group, and was originally started by Mr. James Agada in 1994, but was acquired by the then Computer Warehouse Limited in 1997. From then on, Mr. James Agada went from the Founder of ExpertEdge, to become a Director at Computer Warehouse, and become the CTO of Computer Warehouse, and has become the CEO of CWG Plc. I am married, I have four kids.

DSC01077

For some years now, Nigeria have been clamouring for local content in the ICT industry. How will you rate Indigenisation and local content in ICT?

Unfortunately, I will want to point out that it is a pretty much more complex scenario than a lot of people will understand, so it will be very easy to talk glibly of local content if you don’t fully understand what makes up ICT. So, typically, many of the things in ICT starts from fundamental research. So if somebody does fundamental research and identifies physical mechanisms that could be used to do different things. These kinds of research is being done in universities, and in some corporate research organisations.

These fundamental physical things that are established are the signs of ICT. So for instance, somebody discovers or comes up with a scientific explanation of how a transistor works, and why it should work the way it works. And that scientific explanation allows people to build integrated circuits; and it is because you could build integrated circuits that could have microprocessors, and because you could have microprocessors you end up being able to have computers at home. So, if you didn’t have that beginning, you couldn’t have that end. By the time it had gone through that process, a lot of that had become standardized. In theory, I wouldn’t need to know the detailed science of why a transistor works the way it works, in order to build a factory and start producing microprocessor. However, I will find that I wouldn’t be able to design the next generation of microprocessors if I didn’t have this foundational knowledge. So, it is with that physical scientific, that people use it to create the technology, and it is with that technology that you create the product, and it is with the product of course that you start creating the services that use those products.

What I am trying to say is that, because when you want to look at what is local content, you need to put all these things into consideration. If you are looking at something like software, it is the same thing. The foundational area of software, which is governed more by algorithms, by mathematics by statistics, by fundamental research that is done in neuron sciences, in Biology, like linguistics; even in social sciences – these are foundational sciences. Today people talk about DEEP learning and Machine Learning, but what’s the basis for Deep learning and machine learning? It all starts with mathematics, statistics, a lot of thing coming from neuron sciences and biology, a lot of things also coming from philosophy, before you now saying this is a product, before you start applying it as services. So, the man who is going to define the future is the man who knows these foundations. Every other person will be applying what he has come up with. And he is in a better position to come up with new things based on the fact that he knows these things. From there you have the technology. If you take software for example, people create tools that allow you to explore those foundations, and on top of those tools, people create applications that you and I can use. And a lot of the value that society sees is how we use these tools, not necessarily how those tools are built. Why I am trying to make this distinction is that when we look at the wide applicability of ICTs , so that when we say ‘Local Content’, we have to define what we mean by Local Content. It had always been a bit difficult to define it.

As of today, in terms of the foundational things, our local content is practically non-existent. And that’s sad, because that is the area that most of what you require is just your brain and your education. If you go and check how many scientific papers have been published; if you go and check how many scientific papers is being cited in patents, or important papers; or you go and check how many people are doing PhDs in these areas, you will find out that Nigeria probably doesn’t show up on the map.

On the tool side, it is the same thing. The Operating System – probably Windows, Linux. We are not there, there is nothing we are doing. Or you databases, or your compilers; lots of the tools in that technology side, we are not present. We are present in some of the areas we are trying to use these things. We use it in two parts. The thing with ICT is that you can create layers upon layers. So, we are creating services, or products using these tools.

Let’s take software; when you come there, you look at the whole wide area where software is applied. Whenever you buy a phone, there is software on it. And when you buy any phone, the man who wrote the software is being paid. In fact the story is, that for every Android phone you buy, $10 goes to Microsoft, check the number of Android phones we are selling in Nigeria, and check the amount of money that is going to Microsoft. But that’s just one little part of it. For every car you buy, especially the modern cars, there’s software working inside it, somebody wrote that software. So, each time you ride that car, you are using that software, so you pay a little piece for that software. If you go to the Telcos, there’s a whole amount of software. Each time you make a call, somebody has a switch, and its software that is running it. For each of those calls, for each of those lines, somebody must have paid for the software that is running it. Each of your warships, it’s still software that is controlling it. And your country has paid for that warship, and paid for that software that is controlling it. Each of your planes that are flying, when you buy the plane, you are paying for the software, very expensive ones. There are a lot of areas where there is a lot of software that we are using, we are using them and we can count them. But there are others that we don’t know we are using, but we are using them.

So if I am looking at this whole space, and I am asking, how much is my local content? Its minuscule, it’s very small. Not only is it very small, but we don’t even have the capacity to make it bigger. We can’t say let us ban foreign software, because if I say let us ban foreign software, will you still use your gadgets? Will you ban your planes? Will you ban your telcos? Will you ban your warplanes? It’s not even realistic. The issue here is that in the entire stack, what can possibly be local content is actually quite minuscule.

 

Where do we draw a line between canvassing for patronage of local ICT products and services and ban of the use of foreign software?

I agree 100% as a businessman. If I write software, I expect that I be patronized. But like I said, we don’t even have the capacity to write significant software. So, even what we have done, we haven’t even scratched the surface. Since we now know the scope and how much software is out there, we can ask ourselves, how much software is being done by anybody in Nigeria to control the radar at the airport, but it’s somebody’s software, and its national security. How much software are we doing in Nigeria to help us to prospect for oil? But that software is being used in Nigeria for as long as oil is being prospected in Nigeria. How much software are we writing for our military.

The reality is that the sheer volume and scope of what is possible for us to do, if I were to measure our local content against that, it is very minuscule and will remain minuscule because we don’t control the foundational technologies, so our ability to create these is limited. That is why you find that most people are saying local content, they are looking at Human Resources; they are looking at Accounting; they are looking at Banking; these are what they look at.

 

How do we address this anomaly to be able to make an impact?

The first thing is for us to tell ourselves the truth. Which is that, number one, the areas we think that we are protecting is like throwing the bone to the dogs. We think it’s big, but it’s not big. So, if we really want to make an impact, we will really need to know where we are. When people are saying we are spending such an amount on software in the banking sector, that is true; but however, how many phones are we buying in Nigeria? And those phones somebody is collecting $10 on each phone. So really where do you think we are spending more money?

So there are many ways to address it. One of the ways is if the government want Nigerians to build capacity in those areas. Because government is one of the biggest users of software in the whole world. And we can easily take examples from what other countries have done, for example US, India, and others. Like US, is there an Agency of government that is charged with building this software for the critical areas of government; and having this software to be built these software from scratch by Nigerians? It’s not rocket science. I personally am trained in Radar Engineering, I can write that software, and I’m sure a lot of younger people can do it. But this is where government is going to spend money on if it believes it wants to do it. Because in building that software, you build a lot of capacity. The Israelis had issues with people launching missiles. So, the Israelis sat down and built software that worked with the radar, controls the radar, so that the radar can scan and find where an incoming missile is, the software will calculate the trajectory of this missile and where it will fall, and decide if it is going to fall where people live or if it is going to fall in the desert, and then will make a decision that if it is going to be a dangerous one, that it will launch another missile, at a certain speed, at a certain angle, at a certain direction, so that it can go and intercept it. And they deployed it. The only new thing they did was the software. The radar was already there, the missiles they could launch were already there; the only thing that was missing was somebody to track, estimate, coordinate and fire. They didn’t outsource it to anybody, they didn’t buy it, they built it themselves. So, if the government starts making that kind of investment, you are building people who have quite a lot of capacity, because what we lack is capacity. In my view, the important thing is for you to build capacity. It is not the capacity to build HR, because quite frankly, anybody who has the capacity to build software that will control radar, will be able to build software that will do HR. it is doable. Just from the government point of view alone, if government takes those billions they have, they can invest in these people, train them, or do like the Americans and say, I have $10 million to give to the person that builds this software in Nigeria, by Nigerians in the next one year. Build it and I will give you a million naira. So that side of that investment needs to be done. A lot of what we are seeing today came out of such investments. Oracle database that everyone is using was financed by the CIA; the foundational science in technology grew out of mathematics and Set theory by people working in IBM. And these were published, its general information. If for instance, Nigeria decides that government cannot continue to store its data in Oracle databases, for whatever reason, because the information is freely available, Nigeria can say, Nigerian Universities, companies or individuals, I am giving you X amount of money over X number of years, build your own equivalent of Oracle database from scratch, and I will replace my own. There’s no use the man building the software and nobody uses it. Remember what I said, government is the largest user of IT anywhere in the world. You want to do passport, which is supposed to be a secured system, you bring an Indian company to do it. You don’t even have an input into the technology, you don’t even know if it is properly done. If we are looking at long term, becoming sufficient and having local content, or what I call consequential local content, we have to build our capacity to have that foundational technology, we have to be able to own a stack from base to ceiling. Then we will say we are possibly arriving. But if we focus on saying, we spend X amount importing software, we will continue being in the situation we are.

 

What is your view on the adoption of New technologies?

In a way, I think we use them, but the issue is if we know we are using them. By default we are using them. When people use phones they are using Cloud services. When you use Whatsap, Google, mail, you are using Cloud services.

Many corporate organisations, and it is not a Nigerian thing, have an inflated sense of their ability to secure and manage their own IT resources. I say it is inflated because in actual fact there are few organizations that can claim to have the amount of computing power that Google has; the amount of expertise that Google has in managing that computing power, that has the amount of expertise that Google has in securing it. So, when a Corporate thinks, I want to have the system in my office because I want to secure it, it is actually a fallacy. What makes you think you can secure it, so what makes you think that you can secure it? It is a fallacy. But it is not a Nigerian thing, it is same all over the world. And it takes a time for people to transition. But in that transition, I don’t think we are any faster or slower than the rest of the world. We have to go through that period where people will become comfortable. The real funny thing is that most of the time people are privately using the Cloud without fear, without complaints. But when those people become Corporates, they make the decision not to use the Cloud services.

The other part of it is also that many Corporates has made how much they made in IT to make it appear as if they are innovative, and because they invest a lot in IT that means they are efficient. So they use how much they have invested in IT as a proxy for those. So you have banks in Nigeria that has about 200 people working in their IT department.  A lot of researches I have seen show that there is no correlation between how much you spend on IT and how much profit you make, which to me is not surprising. Because the truth is that it is not how much you invest that matters, but what you use it for and how you use it. And that comes back to analytics. The job of technology is to create technology. So, you have lots of solutions that are looking for problems to solve. The job of the business is to take a problem and solve it. So, on the business side, what you should have are problems looking for solutions. And it depends on how you want to solve the problems. If analytics, which is a tool, and not a solution, and if you can’t figure out how to use it to solve your problem, or you assume it can solve the problem somehow; you have two choices, you make the investment and discover that it doesn’t solve it, because you don’t know how you are going to solve it, especially for analytics. You, being a newspaperman, you see analytics showing you how many people read your stories, and you don’t know what to do with that information, the analytics is useless because the analytics can’t tell you what to do with that information. So, if you don’t know what to do with analytics, investing in it is a white elephant. You will get the information, but you won’t do anything with it. You will feel nice, if somebody comes, you will the person your dashboard, but what have you done with it. What you have done is that you have just invested in a solution looking for a problem, but there is no problem. So in terms of or ability to adopt new technology, as much as the rest of the world, if the technology solves the problems, and we know how to use the technology to solve the problems, we adopt it. Nobody told Nigerians to adopt phones. I believe in some cases we adopt the technology too fast.

 

How relevant is the proposal to set up an ICT University in the country?

What I do know is that we have more than 100 Universities in this country. What I do know also is that the foundational things in ICT are not actually unique or dedicated to ICT. Mathematics is mathematics. A lot of things you are going to do is in mathematics, various branches of mathematics and statistics. When I was doing my Masters programme, one of the things I learnt was Digital Signal Processing, and one of the tricks I came up with – and I actually published a good part of it and later had a student do further research on it, is that there is a way you could analyze signals by treating those signals as language, and figuring out what are the rules to that language. And so, when the signal comes and it doesn’t obey the rules of that language, then you know that there’s something wrong. The application we had was analyzing ECG. So, when you take your ECG in your heart, there is a certain way it is that shows that your heart is ok. So what we did, was to decipher the rules of that language. We collected thousands of ECGs. And we deciphered the rules of that language. And ones you have that language, and you have a new ECG, and you check if it follows the rules of this language, if it doesn’t, then there’s something wrong. We did it and it was successful. We had a student write the programme and it actually did work.

Now, the rules of language is defined in linguistics. My dad studied linguistics. So, I actually had to go back and pull out some of his books on linguistics, and asked him some questions. This is because Linguistics had already advanced how those kind of analysis can be done, because that is what they use in analyzing things. So if I set up an ICT University, I am not sure what subjects you are going to put there. Are you going to put linguistics in there? Will those people apply the rules of linguistics if the rules of linguistics is the best approach to solving a problem? Steve Jobs said because he studied calligraphy, when they were doing the Apple Mac, he made it have very beautiful fonts. Before, nobody cared. If he didn’t study calligraphy, which of course wouldn’t show up in any ICT or science, he wouldn’t have that idea. What I do know is that if the objective is to create highly skilled ICT professionals in that narrow area, probably there is nothing wrong with it. If it is something like a post-graduate school where people will come to after they have gone to Universities and acquired various exposure, then there is nothing wrong with it. But for me, the critical thing is building capacity. If we build capacity, and that capacity is not a capacity on application. I am happy with a lot of the things we are talking about innovation. As a country we have invested in innovation, we have invested in trying to find innovative solutions that solve problems and help people grow. The room for innovation is very wide because there is a lot of problems in Nigeria, and where you have a lot of problems, it is an avenue to innovate and solve them.

Looking at what CWG Plc has achieved over its 25 years of operation, what will you say is the company’s growth formula?

I am not sure that there is one single secret. The biggest secret is simply that we want to create an organization that outlives us. A sustainable organization that outlives us. As it is, we have done a transition from our founders to a new set of management. And we hope that the new set of management will do another transition to another set of managers in the not too distant future. So, if your emphasis is on, how will this organisation survive me, after me, go beyond me? The push to do lots of thing to ensure that the company is there. And a lot of things to make sure that the life of the next manager is easier than mine, by solving extra problems, and keeping infrastructure or doing something that when he comes in he can make it bigger. So the real driver is that we don’t want the organization to die with us, and therefore whether there is recession or not, we have to find a way to make sure that it is there for other people to take care.

 

What have been you challenges as compared to other countries where you operate? And where do you see the company in the next 5 years?

We have already set our target for the next 5 years. For the next 5 years we want to move our business to the point where we will be primarily known to be providing platform services. And we plan that by that time we should be doing 60 million transactions per month across our platforms. But of recent we have started to look at that wonder if that is not too small, so we might reverse that. And the reason we want to move to that, remember I said our guiding principle is that we need to set up a sustainable company that outlives us, and that can be transferred from a generation of managers to another generation of managers. And in trying to achieve that we tend to create those platforms so that day in day out service is being provided, value is being created for customers and we are being paid for those values on continuous basis.

Challenges. well, we are an African country so many of those challenges are the same, but I don’t have to invest in 1megawatts in generating capacity, which is what I have here, in other countries, which is a big cost. In other countries, I don’t have to spend N80 million a year on diesel, and another N40 million a year on electricity bill; which is a big cost. Versus other countries, I don’t even have generators. However, those are countries are much smaller than Nigeria. so, what we are battling now is that I can make much bigger revenue in Nigeria than those countries; but because of the cost of doing business in Nigeria, I tend to be making more profit in the smaller countries than in Nigeria, because of the  cost of operating there is much lower. You understand the paradox! Because Nigeria is much more bigger than those other countries, I am making 10 times more profit in Nigeria, but because of the cost of operation, I am making less than a tenth of the profit I’m making in Ghana in Nigeria.

In terms of policies, the only difference is the issue we have with exchange rate. Apart from that, the policies are not particularly different. And understand that some of the things we are trying to do, if those people were to copy it we will be in trouble, because we will be a foreign company there too coming into their countries. So some of us are praying that they don’t copy what we are doing. If they copy what we are doing, we won’t be able to do business in their own countries. That is why when you set up some of these policies, it is assumed that you are only looking at yourself, which means you didn’t go out. Other than that, we are all African country. After all, for some days Eastern Cameroon has been without internet.

Knowing that there has been renewed call for PPP, how have you been partnering with the Federal Government towards ensuring growth in the industry?

We try to partner with the federal and state government in several ways. On the policy side, we do try to partner as members of professional organisations of ISPON, ATCON, NCS. We play our roles as active members of these organisations by making our inputs in the policy objectives. We also do direct engagements with the policy organisations and regulatory organisations from NOTAP and NITDA. We have had engagements with them. We have given them White Papers, we have gone to do presentations with them. We are actually planning an upcoming workshop with NTDA and NOTAP on how to promote local content.

We do send in proposals to government agencies that we think there are interesting things that can be done. And of course we go in with solutions to particular problems and engage with governments. And in the past one year, we have seen a willingness from local governments. For instance we have about two local governments that we are putting up IT platform to help them manage their collection of rates and taxes in the local government. And the argument is not that they don’t have the money, they can’t account for the money, and they don’t know the amount they have collected.

In this interview with eBusiness Life Communication Limited, the Chief Executive Officer,

MainOne Company, Ms. Funke Opeke, speaks on how companies can leverage on

technology for survival in this economic recession and other major industry issues, as well

as the company’s products and plans for 2017

funke-opeke

Could you make an assessment of the ICT market in Nigeria in recent times?

Internet penetration in Nigeria has increased significantly in the last few years, largely due

to the landing of submarine cables and the deployment of 3G networks by the mobile

network operators. ICT development in the country has grown as a result, with more

applications and content moving online such as electronic banking. The National Broadband

policy and the regulator, the Nigerian Communications Commission (NCC) has also placed

emphasis on increasing internet penetration across the country and those efforts are

helping.

Over time, the issue of last mile connectivity has been a problem. The impact of

programmes geared at growing access does not seem to be felt in rural areas. How do you

think this can be tackled effectively and urgently?

Last mile connectivity is still an issue in Africa predominantly because of economics and the

limitations in infrastructure sharing to serve more economically challenged areas. And the

reality is; although Nigeria has potential for growth, with its 10+ TBPS capacity on its sea

shores, costs of a robust national and local access infrastructure is very high. Because

operators are still building out infrastructure largely on a proprietary basis, the focus is on

building in urban areas where the potential for business is most high and so rural areas are

underserved. That has started changing in terms of tower consolidation away from

proprietary telco ownership, but even that sharing is limited. Changing this dynamic would

require strong regulatory intervention; perhaps incentives to facilitate the deployment of

shared infrastructure in the rural areas and a harmonization or possible reduction of taxes

and fees to roll out such infrastructure. It will also help if government could stimulate the

demand side by taking more services online and making broadband more locally relevant.

Demand would increase in rural areas, for example, if government activities were more

accessible online such as Local Government taxes, services for pensioners and so on.

A lot of issues have been generated over the cost of data in Nigeria. What is your take on

this, and what impact do you think this might have on access and penetration?

Indeed, data prices have proven quite controversial in recent times. The mobile operators

have a case to make about the impact of inflation and forex limitations on their businesses.

However, there should also be the realization that the consumers also face similar

challenges. Price increases are one approach to solve the problem for operators, but it does

not help expand the market at a time where we all agree the need to do so. Perhaps there is

some room for some out-of- the-box thinking here. Capital expenditures are one area where

cost increases are hurting the operators, but this is also the area where infrastructure

sharing yields the most benefit. If operators can share towers, can they also share ducts and

fiber and perhaps even spectrum through mobile roaming, in order to reduce network

deployment costs and limit incremental costs to consumers or perhaps even lower prices

further? Clearly, lowering prices and sharing infrastructure could potentially help increase

access and open up penetration by extending networks to more rural areas.

Some industry players have over time expressed their discomfort in issues regarding

declaration of dominant operator status in the industry. How do you think having this will

affect the market?

Dominance and the power of incumbents is best addressed by establishing policies that

lower barriers to entry for new players. Declaring an operator dominant is not necessarily a

bad thing, if it is a matter of fact. The question is whether that dominance stifles the ability

of smaller players to compete in a meaningful way and if it limits innovation that does not

benefit the dominant player? If so, the job of the regulator is to work to eliminate those

structural disadvantages. We are not there yet.

How would you say MainOne fared in 2016, what were some of your operational

challenges and how do you intend to surmount them in 2017?

As you know, 2016 was a tough year for most businesses, not just MainOne. Nonetheless,

the business expanded operationally across West Africa despite the recession, with new

partnerships, and considerable growth in our data center and Cloud businesses. Our

customers in Nigeria continued to show appetite for our services which help their bottom-

line and productivity, even though their capacity to pay and consume as much as we would

like was constrained. However, the solutions we provide also help businesses manage costs

e.g. data center power costs and connectivity for video-conferencing and other applications

that enable digital business.

Now, more than ever, the harsh business environment implies that companies must manage

their resources judiciously and we have increased our focus on delivering solutions that help

our customers optimize their budgets. In addition, we have expanded our customer

segment to include SMEs, and will provide this growing category with the excellent services

we already provide to large enterprises. We have our SME in a Box service, a bundled

solution which includes Connectivity, Voice and Cloud, currently available in Lagos.

MainOne and some other indigenous firms have set up Data Centers in the country. How

well have Nigerian companies received this and what are the challenges you have been

faced with on this, if any?

I would say the uptake of Colocation services in our Data Center is growing. We have on

board quite a good number of businesses into our 600 rack Data Center, and have plans to

build a few more in Sagamu; Accra, Ghana; and other West African countries in line with the

demand. Our customers include global brand names, as well as leading domestic companies,

and we are pleased to see good uptake from start-up companies in Nigeria as well.

Though Nigerian regulations mandate Nigerian companies to host certain categories of

critical data locally, these laws are not enforced and many Nigerian businesses and

government agencies still host critical data of national interest in foreign data centers.

Challenges still include the level of awareness of our services, and the many benefits we

offer, in terms of high availability, low latency, lower costs payable in Naira, local support

and other add-on services.

What’s your plan for the year, a new goal, a new vision?

We will continue to focus on value addition to our customers. We have invested and will

continue to invest in the right infrastructure, people and partners to ensure we continue to

support our customers and ensure they become even more efficient and successful in their

businesses.

What is the objective of the MainOne Nerds Unite forum and what should we expect from

this year’s event?

Nerds Unite is our annual flagship event for our user community which is the best and

brightest in Nigeria’s IT community. The aim of this event is to promote a community where

mid-level IT decision makers can connect, network, share ideas and gain more insight on

trends in the IT industry. We want them to remain at the cutting edge of their industry and

we bring new developments to them in the areas of Connectivity, IoT, Data Center, and

Cloud services among others. This year, we have more world-class leaders from our global,

blue chip partners including Microsoft, Radware, Infoware, Signal Alliance, Samsung, Cisco,

SAP, Huawei, participating alongside the MainOne team to share knowledge on new trends

and other disruptive technologies. Some of our partners will showcase virtual reality and

holograms demos, a first in Nigeria. We will also have representation from the Internet

Society talking to companies about the benefits of interconnecting locally. In light of the

economic realities within the country, it is important for businesses to take a closer look at

their capital expenditure and improve operational efficiency leveraging technology. We will

highlight a smarter, more innovative way for enterprises to not only survive, but thrive

during this period, leveraging connectivity, Data Center, Cloud and Managed Security

solutions.

Just after two years as the Chief Executive Officer of Spectranet Nigeria, a dogged 4G Broadband Internet service provider, MR DAVID VENN, has brought the company to higher ground in the Nigerian telecommunication market. In this interview with CHIDIEBERE NWANKWO, Mr Venn, looks at the industry, the future for voice communication and how to ensure good data service across board. He further speaks on the next step for Spectranet.

 

How will you assess growth in Nigerian market?

The initial investment was in 2009 with the licencing, and the 4G-LTE wasn’t available then, so the company launched with an earlier technology. As soon as LTE was available, we got it swapped out with 4G-LTE Technology. So 4G-LTE has only been around here with Spectranet for about three to four years. So that is what we have here, we don’t have the old technology.

And that is when the growth really started, because 4G drive much faster and better experience for the customer. And it is more affordable too, be the technology is more efficient in the way it uses the spectrum to get more data.

The investments in that period, we cannot talk about numbers but it is in hundreds of millions in dollars that has been invested. All these equipment, and the modems as well, mostly the network equipment all come from overseas, because there is only a certain number of suppliers around the world that make these equipment. It’s extremely sophisticated equipment. None of that is made in Nigeria, it’s all imported.  All of that is in dollars and there’s been a huge investment in all that.  We have spent a bit more in the past couple of years in rolling out, in marketing and in trying to get our name out there, but most of the investment is going to equipment and network infrastructure. We have a lot of base stations out there. People are quite often surprised by how many towers it takes to service a city. In Lagos alone we have 400 towers. We have over 600 towers across the four cities. Lagos is more spread out. And you provide towers not just for coverage, but for capacity. So most of the investments we spent in the past year have really been to enhance the capacity of the network, because the coverage was already there. But as the tower starts to get busy, we need to put more towers to take up the capacity, so that you can support the customers.  Because you can just get so many customers on the tower before it starts getting congested. We do that all the time, we install new base stations all the time.

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What is the big thing about 4G Technology and Speed

I will explain this, but at the end of the day customers don’t really care if its 3G or 4G, it’s just, does it work? Is it fast? And also the price as well.

3G was designed as a voice network with good data. You make most of your money out of voice calls. They don’t make much money out of data. It is not because data is not used very much, but because per megabit of voice phone call, they make about 100 times more revenue from voice calls than they will make for data. This is because data is quite cheap based on network capacity. This is one of the reasons why the mobile operators they don’t really want data everywhere. Because if there’s data everywhere, most people will start using WhatsApp and Skype, they will stop using the voice networks, they will stop paying for voice calls. I see in Nigeria that in the next couple of years, maybe two or three years, no one is going to pay for calls, they’ll just be buying data bundles, that is what is happening in Europe now.  In UK, I have 5 sim cards on one network, and they are all one account, and I have a 10 Gigabyte plan.  I pay a certain amount for that and they are all shared. All the phone calls and sms are free, unlimited.  But if you say that to MTN, they make about $200 million a month on phone calls, the last thing they want is all that to go to WhatsApp.

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A 3G network takes data and voice and handles both. But you have to configure it as  to how much capacity you have to configure for voice and how much capacity you have to configure for data. So you can be full on data, but still have space for voice.  That is how 3G works. So, if you are making a 100 times more revenue from voice calls, you are going to make sure that it doesn’t get congested. But if you make just 1 percent on data, it doesn’t matter if it gets congested.

With 4G, its different. 4G is all about data. And actually using Voice Over 4G is a new thing. You see that some of our competitors have launched Voice-Over-LTE, that is actually special because LTE wasn’t designed for voice, it was designed for data. It is designed so that you can use any voice app you want on your data to do your voice call.

Some of the older technologies that happened between 3G and 4G, things like Wimax, they are all prejudiced to be called 4G. Because it is more that 3G, they called it 4G. But it is not actually really 4G, because the speed is not fast enough. So, that is why in Nigeria, the new operators that won the latest technology call 4G-LTE. It is actually a standard for what is proper 4G. And the idea is that there is a specification that says, this is what 4G-LTE should deliver, not today, but the plan is that it evolves over the next 10 years. So, the specification says you should be able to get 100 Mb per second speed when you are mobile, that is when you are moving; and you should be able to get 1Gb per second when you are static. This is the standard, but no one does it here. That is the plan. And when we upgrade and upgrade, that is where we should reach. So, you can imagine, there is nothing like 3G. with 3G, in my experience in Nigeria, is awful. Some places, when you speed-test you get a good speed, and you move down the road, there is nothing. This is because its 3G, you get signal here, and u get signal there. But with 4G is data everywhere, and its continuous data.  The 4G spec that says that you should be able getting 100Mb speed when you are mobile, also says that if you are doing a 150 mile per hour on a high speed train, you should on 4G get 150 Mb per sec on your data. That is the standard, that is what they are aiming for. But currently, what you get with the 4G is probably from a few MB to about 40-50 MB. I have done a speed test while coming to work from Osborne Estate, I get 35-38 MB. Now that is better than what you might get for 3G, which is like 8 MB and 9 MB.

 

How do you cope with competition with GSM Operators ?

There are almost 100 million internet users in Nigeria. About 95 percent are using 3G. but there are a few of the operators that operate 4G, and we know that in time everyone will have 4G. we only operate 4G network, and we only provide data at Spectranet. We don’t do voice, we don’t do 2G or 3G.

When you are introducing a new technology like 4G, If you are a mobile operator you will tend to be careful. You don’t want to be disruptive because then you will damage your existing revenue stream; if you don’t have an existing revenue stream, you don’t care about that. That is why I am happy to say phone calls should be free, because I haven’t got any phone revenue.

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When it comes to competition, we have a few 4G operators around and we have a small part of the market between us. There are a few cable operators cabling up communities and very small percentage of people got broadband and fibre, and that will be the case for a very long time in Nigeria. So, majority of the people on internet are on 3G. one of our biggest challenges is to get people to try out 4G. For a lot of people, their only experience of the internet is 3G. That is what they are used to. They are not used to watching Netflix on big TV screen on High Definition (HD). The quality of satellite TV is not as good as the HD. It changes your experience totally.

 

Data cost seem to a controversial issue, How do we address it?

The actual cost of data at the moment is too low. The problem is that the GSM operators have been competing on price for data, and they are taking the data way down below the cost of provision.  And they are complaining that Whatsapp shouldn’t be allowed because it is eating into their voice revenue. That is because they are charging too low for data. And the problem is that when the data charge is too low, no one is going to invest in rolling out more network for data.

What we are talking about is affordability, maybe it is too high for the people to afford. That is different from how much does it cost me to deliver it in the first place.

Spectranet is probably the lowest cost operator in terms of delivering data to people in their homes and we try to reflect that in the pricing as well. The mobile operators have huge revenue stream from voice. So they can supply data cheap at a loss so they can win voice customers and make money out of voice revenue. So, what they are doing is that they are charging more for the voice calls to make up for data. NCC is going to regulate this. They have announced that they are going to regulate the price of data, so that people are not unfairly competing. You shouldn’t be allowed to sell below cost, that is anti-competitive. But Spectranet will not do an upwards review.

The different between customers on 3G network and customers on Spectranet is that our customers use a lot of data. If you don’t use much data, maybe do your email and occasional browsing, use your phone. Maybe you use a few hundred megabits , or at most 1Gb a month. But our average customer uses 25Gb a month. And the modem can be shared with the whole family. The 3G is quite expensive for data, and it is not that fast. We are a Broadband company and our customers are much more heavier users than your average internet user.

 

Are we on track regarding Federal Government’s 30% Broadband penetration target?

I think we are moving in the right direction. Things slowed down a bit, but now we seem to have caught up a little bit. The biggest problem at the moment is that of roll out.  To get that penetration up, you have to roll out broadband to new areas.  At the moment just some of the main cities have broadband. But you have to roll out in all the cities, and you have to roll out to other areas as well before you can achieve that target.

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The challenge is that very few network operators can get hold of the equipment. You can’t import it because of lack of dollars and because of lack of funding. In the past, you can go to an equipment supply and you buy a whole chunk of network equipment, they will deliver it and you will pay in two years’ time or on your payment schedule. It doesn’t work in Nigeria anymore. You can’t pay over a period of five years financing scheme, the banks can’t do it unless you have a Letter of Credit (LC). If I want to buy equipment in dollars, I have to open an LC and give it to the supplier. But the bank won’t open an LC unless I give them a million dollars cash. So what’s the use? So that makes it extremely difficult to import equipment. And if you can’t import equipment, you can’t roll out to new areas.  So as I mentioned earlier, we managed to get Port Harcourt done this year. All the other base stations we have we are saving for capacity because as out business grows in existing cities we need to put up more capacities so that it won’t get congested.

In spectrum allocation, Is revenue sharing a good option?

Lots of countries do that.  NCC chooses to do spectrum allocation by public open auction. This is because they seriously want to make sure that there is transparency. My comment is that it is well and good. But if you are going to allocate limited resources like spectrum through an auction, it is going to go to the people with the deepest pockets, and so the smaller players can’t afford to play. In many markets, the government is more interested in getting partners that will roll out, and so rather than pay upfront, they say they need $50 million for licence,, so they give you licence for free or for a very small amount, and in return, as your business grows, you give a percentage of your revenue to government. So, you pay as you grow, rather than pay upfront. It happens all over the world. It could be 3 percent or 4 percent. And it is for the lifespan of the licence. Government makes more money than they would have made if they sold the licence. The only challenge in Nigeria is transparency.

 

What is Spectranet’s target for 2017?

We have five awards this year. They are recognitions of what we are trying to do. We do have a very tight target market, that is families and small and medium enterprises. There is a big overlap between the two because a lot of the families that we service also have small and medium-sized businesses. So we are very clear as to what our target market is. We have a lot of youths on our network, we have corporates on our network, we have business people and professionals on our network. And that is fine, they use our network, but our target is families, and small and medium enterprises. They people we speak with, they like the service, they are happy with it. They tell their friends. And one of the market differences here is that there is a lot of word of mouth. In any market you are in, when people like your service, they tell their friends, and that is the best adverts you can get, because it is recommendation.

Maybe next year we will get some more of that. The economy is in a particular condition and we are not trying to survive, we are trying to grow. Through this period we are trying to grow and come out a much stronger business. I think in the telecommunication industry, there is going to be a number of companies that don’t exist next year, because times are hard. If they haven’t been looking out for their customers or don’t have the right revenues, they are not going to be here. But we expect to pick up all that business, and more, and grow our market. And we get to new areas, and come out stronger. And if you don’t think that as a business, you shouldn’t be doing it, you should just go.

 

About David Venn

I have personally been in the telecommunications industry for a very long time, for about 35 years. I left school and joined British Telecom as an engineer. And I have lived and worked all over the world as telecommunication industry has developed I developed and grown with it. I have worked in a lot of markets, including Asia, and a lot of markets in Africa. I was in Zambia for seven years, Ghana for two years, as well as America for five years and Middle East and Asia. I Have world in almost all continents. And as I did that, technology is developed. And here I am now in Nigeria with the latest technology in 4G. I have been here two years. I was brought in by the shareholders to take the company to the next level. It was already doing quite well, though it was smaller and little known two years ago.  If you cast your mind back to previous government days, not many had heard or known of Spetranet, but now everybody know of what we do. It is a brand that has come up in the last two years. That is one of the changes we have made here in two years.to push the brand forward and make sure we serve as many customers as possible.

 

About Spetranet

Spectranet is a product company. We provide good quality, at-the-right-price broadband company. We are not a mobile phone company, we don’t offer phone and voice services, we offer data and internet services, and basic broadband. And it is really targeted at the home and offices. We are not talking about the big corporations; we are talking about people’s homes who want broadband services for their families, and also the small and medium sized enterprises. That is our market, that is what we do. We give good quality broadband service. We do that in Abuja, in Lagos, In Ibadan and Port Harcourt at the moment we managed to launch in Port Harcourt early this year before the crisis hit in terms of economy. We managed to get the equipment in and do that. So we have four cities.

Our main market is Nigerian families that want to have broadband in their homes, with WiFi for the whole family to use. And not just to use it for browsing, they use it for entertainment, for TV, YouTube, for Netflix; but also for email, for gaming, for YouTube, for Skype and every other thing the family will use it for. So, what we provide is Modem, put it in your house, scan it to 4G and it picks up our signal. That is the main thing we offer.

We don’t really go for mobility, but we do have a lot of MiFi devices as pocket modems, you can take them with you, so you have data with you everywhere you go. It comes with a 12-hour battery. If I’m watching Netflix at home and the power goes off, and I have got UPS for my TV, nothing changes. So, the light goes out, I’m still watching my Netflix. You can put that in your car and you’ve got broadband in your car.

It’s changing a lot of things. A lot of people now watch video, entertainment via internet streaming, much more than they used to. Two years ago, if someone sent you a Facebook message with a video with it, you delete it straightaway, because you don’t want it to consume your data bundle. But now it starts playing automatically, and people watch it. People now watch more videos, and YouTube. You get a lot more content. And that’s a major change in the past two years in Nigeria.

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