BROADBAND INTERNET PENETRATION IN NIGERIA

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BROADBAND INTERNET PENETRATION IN NIGERIA
THROUGH CONVERGENCE
A PAPER PRESENTED BY MR. IGHO MRAKPOR, MD/CEO,
HIREST AFRICA LIMITED, AT THE NIGERIA
INTERNATIONAL GSM STRATEGIC CONFERENCE
EXHIBITIONS IN ABUJA ON JULY 12, 2007
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INTRODUCTION The quantum development in the
telecommunications industry all over the world is
very rapid as one innovation replaces another in
a matter of weeks. A major breakthrough is the
Internet and the wireless telephone systems,
which come in either fixed wireless telephone
lines or the Global System of Mobile
Communications (GSM). Communication without doubt
is a major driver of any economy. This
development show emerging trends in
socio-economic growth and a high premium being
placed on information and communication
technology (ICT) by homes, organizations, and
nations. Nigeria is not left out in all.
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Nigeria, no doubt has in recent years become one
of the biggest and fastest growing telecommunicati
ons markets in Africa and the world at large,
attracting huge amounts of foreign investment.
The mobile sector, shared by four operators, has
seen triple-digit growth rates every year since
competition has been introduced, but the country
is yet standing at very low levels of market
penetration in the Internet sub-sector.
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Recent statistics (Sept 2006) released by
Internet World statistics.com, show that Nigeria,
with an estimated total population of
150,000million had only 200,000 Internet users as
at December 2000. This increased to 5 million by
September 2006, indicating that only 3.1 of the
population is using the Internet. However, the
increase of users from 200,000 in year 2000 to 5
million in year 2006 shows the growing interest
and awareness in the use of the Internet. This
therefore calls for the need to grow Internet
market penetration in Nigeria.
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• The growth in the Internet sub-sector has been
  hindered by
• Underdeveloped and Unreliable fixed-line
  infrastructure.
• Inadequate transmission infrastructure.
• Lack of pervasive copper infrastructure.
• Poor power supply.
• High cost of buying bandwidth from abroad.
• There is therefore, an urgent need to employ
  emerging trends such as convergence of
  technologies to grow broadband Internet
  penetration in the country.

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Convergence is about opportunities provided by
technology to enhance the quality of life of the
consumer by increasing consumer choice,
facilitating access to the benefits of the
Information Society and promoting cultural
diversity. It is about services and about new
ways of doing business and of interacting within
society. It is also a response to, and a
reflection of, greater competitive pressure in
the ICT industry. The emergence of new services
and the developments of existing services are
expected to expand the overall information
market. These developments are therefore,
positive for the Nigerian economic and social
development and should be encouraged.
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• However,
• Consumers are likely to use new products and
  services offered through convergence only in so
  far as those services are useful to them.
• The take-off of new services must be
  demand-driven and not simply supply-driven. This
  is reflected in consumption trends, which are
  beginning to show the first signs of convergence
  in the home.
• Operators therefore believe services should be
  bundled. They very strongly believe that offering
  bundles of services makes customers less likely
  to defect and saves money on marketing and
  customer acquisition.

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• Issues to consider
• Issuing a single bill is vital for the service
  providers vision of bundled services to work.
  The attraction of a product bundle for the
  customer is its simplicity. But if the single
  bill side of the equation falls over, product
  bundles lose their appeal or the end-user.
• 2. An additional type of question relating to
  convergence has centered on how to promote new
  convergent services and converging industries.
  Whereas the different communication and media
  industries formerly were more confined to their
  specific areas, technology convergence creates
  possibilities for companies to develop and
  deliver services across technology platforms, and
  for users to get access to new kinds of
  communication and media services.

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3. Another major problem that the customer may
have to contend with in the era of convergence is
that of inefficiency and poor service quality as
some operators may be providing services for
which they do not have core competence. This is
not to say that convergence is not good for
either the consumer or the operator, it actually
offers massive opportunities for the development
of new value added services, convenience,
efficiency and the expansion of consumer choice
if well managed. Convergence is potentially
beneficial to competition. However, the
competition enhancing implications of
technological horizontal convergence are
diminished when individual companies integrate
horizontally, increasing their market power
across different technology platforms.

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Success factors 1. In delivering services to
consumers in the converged world therefore, the
first factor for operators to consider is
flexibility. Not everyone wants to buy a bundle
of services, so operators must allow customers to
pick and choose the services they want. The most
successful operators, therefore, are those that
have the technology to offer multi-play services
bundles and offer these services in such a way
that the consumer is the one making the choice,
they dont push a specific bundle or force
services on consumers that they do not
necessarily want. 2. For convergence to be
successful, it has to be simple for the
consumer 3. The brand must be strong and founded
on good customer service, otherwise consumers
will not want to sign up even if offered
discount.
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4. Regulation in the era of convergence should
be based on the objective of maximizing benefits
and minimizing risks of consumers. This implies
the need for the creation of adequate regulatory
instruments to protect the fundamental rights and
responsibilities of consumers arising from the
wide circulation of information in the sectors
affected by convergence. 5. A key priority of
any regulatory framework should be to seek to
meet the needs of users in terms of offering them
more choice, improving levels of service and
lower prices, whilst fully guaranteeing consumer
rights and the general public interest. Such an
approach is fully consistent with wider policy
goals, which recognizes the important role many
of the sectors in bringing the Information
Society via the Internet into Nigerians everyday
lives.
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• There should be proper policies in place to
  address privacy issues, responsibility for
  content and the protection of minors, free speech
  versus libel, appropriate jurisdiction and
  consumer representation are some of the issues
  that need to be addressed in the new environment.
• 7. Public policy will need to provide a
  supportive environment for convergence in order
  to ensure that the potential opportunities are
  grasped in a timely fashion and that the consumer
  is adequately protected from exploitation by the
  operators.

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THANK YOU FOR YOUR KIND ATTENTION
IGHO MRAKPOR, CEO, HIREST AFRICA LIMITED, LAGOS,
NIGERIA