Affordable Spectrum is a key driver for rapid growth of broadband connectivity

Due to the Covid 19 pandemic which is ravaging the world, there have been changes particularly in customer usage of internet. In this interview Ajay Awasthi, the CEO of Spectranet, a company that plays major role in internet delivery in Nigeria explains that there has been shift towards applications such as Online Gaming, Over-the-top (OTT) content viewing and web browsing. Each one of these growing by over 50%. He says Spectranet was quick to recognize and act on strengthening the service delivery and products to address the heightened needs for safety and reliable 24X7 internet connectivity. “Within a short period Spectranet was able to ramp up network capacity to cater to almost 30% increase in data consumption”. Excerpts.

It is now one year that Nigerians and the entire world were forced into a new lifestyle called the new normal, occasioned by COVID. To what extent did the new normal affect internet users in Nigeria?

We have been keenly tracking the changes in customer usage behavior over the last one year. The pandemic has really led to profound changes in the way customers consume media and entertainment (M&E), time-of the day data consumption habits and purchasing patterns.

We have noticed a major shift towards applications like Online Gaming, Over-the-top (OTT) content viewing and web browsing. Each one of these growing by over 50%.

Spectranet plays a major role in Internet Service delivery in Nigeria. How was the company able to adjust in managing customers’ shift in lifestyle as result of COVID 19?

COVID-19, for sure, has caused a shift in consumer behavior and some of it, I believe, is irreversible. As a leading internet service provider (ISP), Spectranet was quick to recognize and act on strengthening the service delivery and products to address the heightened needs for safety and reliable 24X7 internet connectivity. Within a short period Spectranet was able to ramp up network capacity to cater to almost 30% increase in data consumption. In order to address a surge in night time data usage, Spectranet introduced customized data plans offering free unlimited browsing during night hours and early morning hours.

In keeping with COVID- 19 protocols, more people work from home, thus driving Internet usage in homes, than in offices. What is the business implication of this development?

Yes, we have seen this shift in usage happening from CBD areas to residential areas. With the advent of WFH culture this shift is on expected lines and it is there to stay for a while. As an internet service provider, we needed to make significant investments to enhance data capacity in and around these residential areas. Also, our customer service footprint was expanded to provide closer to home service through company owned service outlets.

Brand visibility is key to business growth. How has Spectranet been able to maintaine its brand visibility in the face of COVID-19?

With people confined to their homes most of the time, there has been a distinct shift in the media consumption habits within the athome entertainment segment. In order for the Brand to stay visible and relevant to the target audience, firstly Spectranet, and I’m sure most other brands, diverted significant Ad spends to online media. Secondly, it was important to recognize that media consumption habits have changed and varied across generations, for example, Millennials (2437 years) are more into watching on-line videos while Gen X (38-56 years) got hooked onto broadcast TV most of the time. Customizing the brand messaging and media vehicles, therefore, was critical for effective communication.

Most internet service providers went under during the first wave of COVID-19. DO you foresee more of them going down in this second wave of COVID 19, and what is the way out?

If that’s what your research says, I’m not surprised a bit. Smaller Internet Service Providers (ISPS) play a critical role in addressing under-serviced markets as they are better positioned by virtue of having superior understanding of the micro-markets and customers.

The smaller ISPS, though are vulnerable and need an enabling policy environment to grow. Let me explain this further. Post launch of 4G LTE, the lager MNOS with superior pricing power and the eagerness to quickly gain market share, have unleashed a data price war to the detriment of the industry as a whole. While MNOS voice- based revenue is protected via a Floor Price below which they can’t sell, the same is not true for Data pricing. In the absence of a floor price for Data, MNOS resort to predatory pricing forcing smaller ISPS to copy and sell below cost. Without the safety net of voice revenues to fund the below cost selling of per GB data, the smaller ISPS go down.

This anomaly in the policy framework needs to be addressed for the nurturing of a healthy ecosystem ensuring a level playing ground for smaller ISPS.

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Consumers have been clamoring for speed of internet connectivity. How has Spectranet been able to manage speed in its internet service delivery?

Being a pioneer in bringing 4G LTE technology to Nigeria way back in 2013, Spectranet is known for providing high speed internet connectivity at affordable prices and excellent customer service. We have been witnessing a steady increase in the requirement for higher data volumes and higher speeds over the years. At Spectranet we follow a time- tested mantra of staying aware about changing consumer trends and investing ahead of the curve. This has helped us in delivering consistent customer experience even during the COVID-19 onset.

As internet service provider, what is your view about the general belief that Nigeria has the highest rate in the cost of internet service delivery worldwide?

If I recall correctly this belief was created about two years ago by citing an outdated report from a UK based website. The report was dated. With the average price per GB, as per NCC’S November 2020 report, at N 487.18 , Nigeria is doing quite well in Data pricing. Also, if you refer the latest report dated 27th April 2020 by the same site, Nigeria is placed at 58th position with average price per GB at USD 1.39 (same as in UK) out of 228 countries listed in the report. That’s a good progress!

It’s evident that data is not at all overly priced in Nigeria in spite of extremely high input costs like price of National bandwidth. Just to give you an example, the cost of carrying the same volume of data traffic from Abuja to Lagos is almost 3-6 times of the cost for carrying it from Lagos to London.

It’s also pertinent to add that cheap is not necessarily the best when it comes to Data. ISPS like Spectranet committed to providing 24×7 data connectivity with consistent quality parameters and excellent customer service, need to spend significantly higher to deliver 1 GB of data. So, a balance needs to be arrived at between the cost, price and the desired quality of service.

In the latest report released be GSMA, it advised African governments to make cost of spectrum licenses more affordable as a first step towards maximizing the benefits from broadband connectivity. What is your take on this?

Availability of affordable Spectrum, inter alia, is a key driver for the rapid growth of broadband connectivity. It’s like basic raw material for conventional industries and therefore better and cheaper availability of spectrum will help operators provide quality services at extremely affordable prices. It’s also important to add that it’s not only the higher prices of the spectrum which impact the end-user pricing but also the cost of lease line, deployed for back haul, plays a major role. The cost of in-land lease lines, as cited earlier, to carry data traffic remains extremely high in Nigeria. Similarly, the cost of infrastructure like towers is a critical determinant. It’s important to take a comprehensive view on the complete cost structure rather than just addressing one part of the cost chain.

There have been reports on the rise of cyber-attacks on organizations and individuals who operate in the cyberspace. How secured are the internet solutions that you offer to customers?

With more and more digitalization happening, the vulnerability to cyber attacks has increased for sure. Cyber Security threats caused by DDOS, Malware, Emotet etc. are quite common these days. As an operator we take cyber security very seriously and have deployed sophisticated equipment to thwart and neutralize these threats. There are multiple layers of cyber security comprising latest generation of Firewalls and Intrusion Prevention systems which effectively neutralize such threats.

Spectranet has been in Nigeria for some years winning awards as one of the best service providers, what makes Spectranet so unique in providing better customer service ?

At Spectranet, we constantly remind ourselves that Customer dissatisfaction is just one bad experience away. We call these bad experiences “customer pain points” and assiduously work on getting down to the causative factors and addressing these. Proactive customer service ( anticipating customers’ needs and pain points) is like a religion at Spectranet. The focus always is on eliminating these pain points or bad experiences by staying ahead of the causative factors.

A critical factor which drives proactivity is the design of Customer Service Delivery (CSD) organization and the hierarchical distance from the front-end Customer Service Executive to the CEO. At Spectranet we have managed to keep just two layers between CSE and CEO and that helps significantly in staying tuned to customers’ requirements.

The federal government is projecting 70% broadband penetration across the country by 2025. If achieved, how will it impact internet services delivery in Nigeria?

With sustained efforts being put in by Honourable Minister of Communication and Digital Economy and the regulator NCC through a facilitating policy framework, this target of 70% broadband penetration would certainly be achieved. The achievement of this milestone will drive up internet usage and data volume significantly. Internet Service providers need to continuously invest in the capacity to ensure service delivery is not compromised.