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FG to drive broadband access with mobile phones

By BusinessNews Staff on April 22, 2014

It is no longer news that the Federal Government is now, than ever before, committed to driving broadband penetration in the country.

But beyond the Open Access model developed by the Nigerian Communications Commission to put in place the needed infrastructure and framework for broadband access nationwide, the Federal Government through the Ministry of Communications Technology is seriously considering the mobile Internet option.

With this segment of the market growing at a very alarming rate courtesy of the influx and usage of smartphones and other smart devices, the Federal Government is also not thinking differently as it is looking at encouraging more Nigerians to come on board.

The body language of the government, therefore, is skewed towards encouraging more Nigerians to access the Internet via their phones.

Access to the Internet through the Global Systems for Mobile communications networks has already risen by 96.3 per cent in the last one year in Nigeria. Experts believe that more growth potential still abounds in the segment.

The latest data provided by the NCC showed a current figure of 63.47 million mobile Internet subscriber base recorded for February 2014. This is against the 32.34 million recorded for the same period in 2013.

The difference, which depicts an increase of about 96.3 per cent year-on-year, cuts across the four GSM operators in Nigeria – Airtel, Etisalat, Globacom and MTN, according to the report.

The data for February 2014 showed 9.6 million for Airtel, 6.1 million for Etisalat, 14.9 million for Globacom, and 32.8 million for MTN.

For 2013, the figures were Airtel, 5.9 million; Etisalat, 4.3 million; Globacom, 0.78 million; and MTN, 21.3 million.

The latest subscriber statistics showed that the country connected 169 million telephone lines, covering the GSM, Code Division Multiple Access and the fixed wired/wireless lines operators of which 127 million were currently active.

The GSM operators, including MTN, Globacom, Airtel and Etisalat, connected 159 million lines with 124 million active. The CDMA operators had a connection of 7.6 million lines, while only 2.4 million lines remained active.

The fixed wired/wireless operators connected 2.3 million lines with only 360,537 lines left active. Also, Nigeria recorded a growth in its teledensity from 81.7 per cent in January 2013 to 91.1 per cent by the end of the year under review.

The statistics also showed that telecommunications operators’ total installed capacity, which was 226.6 million lines by January 2013, went up to about 248.4 million lines by the end of the year.

Statistics released by market research and statistics specialists, digitXplus, the digital unit of Mediareach OMD Nigeria, also showed that the country recorded a 200 per cent growth in Internet users between 2009 and 2013.

The report also indicated that Nigeria, which tied at 55 million Internet users with the United Kingdom in 2012, took 14 per cent leap garnering about 62.4 million Internet users above the UK with a paltry increase of just two million (57 million) users in 2013.

Last month, the Federal Government pledged to work towards reducing the cost of Internet-enabled mobile phones so as to get more Nigerians onto the Internet. The Minister of Communications Technology, Mrs. Omobola Johnson, said that the government was passionate about increasing Internet penetration in the country, and was not relenting trying available options.

The minister also disclosed that President Goodluck Jonathan was backing the move by the ministry to de-gazette a law by the Nigerian Copyright Commission to impose a two per cent tax on mobile devices in case they are used to infringe on copyright laws in the future, as it (NCC) will need the money to regulate that.

The minister however urged the private sector to come out with plans on how to manufacture low cost devices that would enable more Nigerians have access to the Internet.

“Penetration goes up when there is relevant content and people see the need to get on the Internet and so people will buy a N2,000 phone if it will get them onto the Internet,” she stressed.

The minister gave an assurance that she would not advocate for the imposition of taxes on devices while pushing for affordable broadband Internet access for Nigerians at the same time.

She added that the Federal Government was poised towards tackling the challenges of broadband access in the country.

According to her, what appears as challenges to the vision are the surmountable issues of policy and cost in driving broadband access for the country.

She stressed that the four fold broadband plan for the country was achievable, ‘if all stakeholders work together as a team.’

Currently, the country has a phone company, RLG Communications, with a $50m plant situated in Osun State.

The minister had also hinted that another company called MiFonea, which is based in Mauritius with operations in 14 other African countries, was at an advanced stage of entry into Nigeria with a plan to setup a $30m facility to assemble feature phones and smartphones.

The Federal Government, last year, expressed worries over the 100 per cent dominance of the mobile phone production and assembly market by foreign companies.

The development, which was confirmed in a recent review of the sector by the Ministry of Communications Technology, informed the putting together of a stronger local content guideline by the Federal Government.

To reverse the foreign dominance, it was learnt that the government was currently working towards creating enabling environment for innovation, lower market-entry barriers and increase participation by Nigerian companies, while also encouraging the offshoot of new technology businesses.

A draft of the sector review document read in part, “The Nigerian ICT industry is dominated by international companies. They have 100 per cent of mobile phone market share; 70 per cent of the personal computer market share; and 78 per cent market share of mobile network operators.

“Participation of local companies is further restricted by the predominance of unspecialised value chains, with highly fragmented industry and intense competition in limited ‘fringed’ sub-sectors.”

According to the Federal Government, handset manufacturing will be a key market for local designed applications, games, films, blogs and news as well as applications created around data sets under the Open Government Projects.

In a bid to drive creativity and make businesses in the country competitive globally, there are also plans by the government to train best talents in the country and connect them to industry innovation hubs.

The talents are expected to be produced from various human capital development projects of the government like the Tech Launch Pad initiative and incubation programme set-ups, among others.

The call for affordable mobile phones by the government might have been informed by the notion that mobile phones sold in the Nigerian market were overpriced compared to other saturated markets in the world.

Some mobile phone dealers in the country had said that aside from the cost of production, a lot more cost centres were also factored into arriving at the prices that consumers eventually pay for the phones.

It was also learnt that most of the phones in the country could be sold for far less than their current market prices if the artificial cost elements were tactically controlled by the phone manufacturers.

[Punch]

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