CDMA operators must adjust technology to survive — Ericsson Nigeria boss

While Code Division Multiple Access operators are currently engaged in merger talks that will produce a new entity to be called CAPCOM with $200m fresh investment, the Country Manager, Ericsson Nigeria, Mr. Kamar Abass, says chances are bright but warns that they must adjust their technology to ensure survival. He spoke with DAYO OKETOLA

Do you think the Nigerian mobile money initiative could be successful?

Of course I do and let us look at the evidence. There are, today, roughly 100 million mobile customers in Nigeria and that level of adoption would have been impossible for anyone to predict 20 years or even may be 10 years ago. I myself did a study here around 2007 when the number of customers in this market was at 60 million and I was thinking at that time, together with the analysts who worked with me, that we were close to saturation point  but the market does keep growing. Really, it’s hard to predict the ways in which technology will evolve and the problem is that  most people look at things in terms of a straight line rather than examine the enablers that will give growth to this market and I think the enablers are: the presence of so many customers, the reality of the banking sector in Nigeria and the way it is changing. There is very strong likelihood that you will see multiple new layers of technology such as fibre, much cheaper smartphones and mobile operators which have got big networks that they wish to fill plus of course, the reality of the unbanked community.

So my sense is that these are all enablers but we still got to do a lot of work. We’ve got to help the operators and the regulators understand the art of what is possible and let, together, bring the Nigerian dimension to it and that means it appeals to the particular needs of the Nigerian people, their particular idiosyncrasies, and the way they like to do business and I think we will begin to see the market take off.

 

This is of course in  the domain of the operators. The operators themselves have got to create the ultimate proposition but what we will do very very well is to bring the knowledge of key success factors. And one of them is the simplicity of the applications, the simplicity of the user interface, the things that customers see and the ability for them to be very friendly and support usage. When we were a partner with Sony in SonyEricsson, one of the very well established facts was that the SonyEricsson firm generated more income than others because of the interface. The interface is really what is required and what we will do is bring our experience and we will also work with operators to get the message out there. We have to entrench  m-commerce and m-payment in Nigeria not only in the area of policy but policy direction.

My sense is that many Nigerians will value the opportunity for a secure method of payment, one that is less vulnerable to cash and one that gives them the ability of access to  a widest range of goods and services possible.  They will value that but we have got to do a lot of work to make sure that it is friendly to the users and its friendly in the regulatory, policy and commercial environment.

CDMA operators have been  struggling financially in the past five years and some of them are on the verge of merging.  What is the survival possibility and what is Ericsson doing to help them in the area of technology?

We have CDMA operator in America where it is working very well. I think the survival possibility for CDMA is very good. The problem,I think, is structure and they are now addressing the structure issue which is the problem with unified licences.  I, myself, was an advocate of the consolidation of the CDMA operators into one entity but the structural problem is that they were never really designed to compete with GSM companies. And therefore structurally, they never could really compete effectively but it seems to me that with Unified Licences, it’s now more possible and more feasible for them but they need to move technologies now. They need to move away from CDMA and move to a technology that gives the ability to meet the needs of consumers today, who are very much trained on the opportunities from wideband CDMA and ultimately LTE.

Are you saying there is a future for CDMA?

There is a future for them but they will need to adjust themselves a little. One is investment.

They are investing $200m, is that enough?

That is a good starting point.

What is Ericsson doing to help mobile operators in Nigeria migrate to Long Term Evolution technology?

We have got an enormous amount of experience with LTE globally. Of course, we are one of the first vendors to sell LTE technology to operators in America more than three years ago. So, we have got the expertise in LTE. LTE gives you the ability to do two things: to cover territories much more efficiently. And secondly, LTE gives you the ability to carry data much more efficiently. The spectra efficiency of LTE is many times that of 2G and that means that for any unit of spectrum, you can use that far  more efficiently and that is important to the operators’ landscape. In terms of number of operators, well, I will tell you this, in the UK, you’ve got a total population of 50 million and you’ve got four operators there. In Nigeria, and you’ve got three times of that in terms of population and twice that in terms of users. There is a significant opportunity for new services to generate a lot more business for these operators.  That is space and profit in the market place for new operators.

Some people are complaining that Ericsson is competing with local ICT companies in areas where they have capacity; which means that you are denying them of what they should benefit from the telecoms industry. What’s your take on this?

I am not sure that is totally true. In our case, we rely enormously on local services. If you look at our spending in this country, it is hundreds of millions of dollars every year. Of course, I am a Nigerian and that is another investment. My objective is to sponsor the development of Nigerians who can ultimately lead the business. We have got experts and the reality is that it’s not efficient for us to use expatriates. Predominantly, even a few experts cost a lot more money than  the locals would cost in terms of the support we have to give them for coming into this country.

Now, they bring valuable knowledge and the plan is to use them for a period for knowledge transfer and I am going to be sponsoring that.  One of the things I must do as well is to give our Ngerian market the opportunity to grow and give more opportunities to Nigerians. That means we must do more business with the operators by helping to transform them into the next generation of networks and the next generation of growth. We want to work with government to build smart cities so that there is the ability for everyone who wishes to communicate to do so without difficulties. We want to see data centres built up in Nigeria so you don’t have to continue to go offshore to host data. We will work with customers to create connections between those data centres. Data centres are just one single store here and there but you need connectivity to connect them. We will ensure that fibre and mobile can work together to exploit and access those data centres. We want to make sure that the experience of customers on mobile phones is acceptable so that you don’t have the drop calls that you have today. So, we’ve got technology that we are working with operators to help build into their networks. There is an opportunity to achieve a step change in the whole mobile networks system in Nigeria and that is what I want to try and foster.

Can LTE help Nigeria meet poor QoS challenges?

Because LTE gives you more spectra efficiency, operators can basically do more with less and I think it will be part of the solutions. The solution about quality of service is really about investment and optimisation of these networks. That is, proper investments and proper operational maintenance of those networks and  we are helping with investments in terms of helping operators with the technology they can invest in and we are providing expert services and resources that can help them.

How much do you think operators need to invest to finally and permanently tackle Qos challenge?

This is a contentious discussion because operators say they invest absolutely the right amount. This is an issue between the operators and their shareholders and we really should not comment on it. But one thing I can say is that there is a coverage deficit in relation to where operators say they want to be and there is a capacity deficit in relation to where operators themselves want to be. So, we are helping to make that journey and that is a significant shortfall but everybody knows that and understands that and are working towards improving the situation.

Nigeria is a very challenging environment to operate in. Even if operators were to have that money and are ready to spend it today, there are logistical challenges which mean that it is slower than what everyone will like.

Ericsson located a regional support centre in Ghana for West Africa last year at the expense of Nigeria. So, what will Nigeria benefit from Ericsson now that you are the boss and you are a Nigerian?

What we are planning for this market is to be able to be the best that we can be to the customers. And the key thing is that the customers do have a lot to say about where the centres are and  as we speak to the customers, we are asking them this question: how can we get you from where you are to the best possible place you want to be? That usually involves doing a lot of work helping them to operate and maintain their networks. The people who maintain these networks need to be based close to where the networks are. So, what we are saying to customers  is: let us work with you, let us do more for you with our expert resources,  let us put those resources together in a way that allow them to be shared and therefore efficiently managed in cost terms and then let us put that in Nigeria. If we can work with our customers, then we can implant those people in Nigeria. They don’t have to go anywhere else. If we are serving customers in Nigeria then they have to be in Nigeria and that is what we are trying to work towards.