Concentrating 99% of fibre infrastructure investment in urban centres, a business decision – Opeke
This year marks ten years since MainOne was founded in Lagos, Nigeria. The company’s milestones include being the first telecommunications company in the West African region to deploy a subsea cable into service on the West Coast.
Funke Opeke, CEO of MainOne, spoke to BusinessDay’s Frank Eleanya on the lessons, milestones and hurdles it has faced doing business in Nigeria and Africa in the past ten years.
Ten years ago you came into the scene when Nigeria had less than 6% broadband penetration and the regulatory environment wasn’t as great as it is now. What was your dream and why did you think it was possible in this environment?
When MainOne started, the vision was to bridge the digital divide and make Internet services more widely available across West Africa and promote adoption toaccelerate the quality of life and pace of development in the region. I thought it was possible because of my professional experience in the United States where I had witnessed the tremendous growth and indeed explosion of the Internet over twenty years. I saw no reason why we could not achieve the same here in Africa and viewed it as a necessity for Africans not to be left behind to gain access to technologies that were revolutionizing other parts of the world.
Looking back now, would you have changed anything about MainOne?
I would not have changed anything. We are not where we want to be yet, but we are happy about the impact we have had on Internet penetration in the region and while we are still working for our investment to pay off, we have built a business that has diversified its portfolio of services and geographies and remains well-positioned to continue to add value going forward.
At the time of setting up MainOne, what was more important? Addressing the gross infrastructure deficits or running a successful business in a very challenging environment?
I think addressing the infrastructure deficits in the region was most critical, but we did not think that was antithetical to running a successful business. I had limited business experience in the region, so I underestimated the challenges of our business environment and that the environment is such that innovation and value creation did not necessarily translate into successful business. Perhaps managing in this challenging business environment is one of the key lessons that I have learnt from this journey. We have had to work very hard to make our business successful despite the fact that we deployed infrastructure that results in positive socio-economic outcomes because there are so many barriers to progress in our environment.
MainOne is today one of the 6 operators of subsea cables in West Africa. How did you pull off that achievement, plus the financing?
We deployed the first private subsea cable into service on the West Coast and we pulled it off with a strong vision, superior governance and leadership, and relentless execution. There is a strong national business case for investments that close the infrastructure deficit in Africa. The challenge is that the environment makes it difficult for investments to succeed.
What, in your view, has been the factor holding Nigeria and West Africa back from deploying pervasive broadband infrastructure despite all the investments made?
Major improvements have been made in the region especially in the last couple of years. However there are still some lingering issues such as the lack of viable economic structures for the deployment of robust national and local access infrastructure which manifests in the absence of shared infrastructure, exorbitant costs to deploy services, multiple taxes, among others. As soon as we tackle these issues effectively, we will be able to realize our vision to diversify from oil and create a digital economy
Nearly 99 percent of fibre deployment has been to urban centres like Lagos and Abuja. Is this a business decision or policy-driven decision?
This is a business decision. Businesses invest where they expect to make the most return. It is the role of government to implement policies that drive development and provide incentives to ensure development is even across the country and extends to rural areas. For us at MainOne, in addition to deploying fiber in Lagos, we have also built terrestrial fibre infrastructure in Edo and Ogun States. We have initiated a project with Cameroun to extend our submarine cable to the Niger Delta more than five years ago, but we have not been able to justify taking on more crippling bank loans to complete the project.
It has taken Nigerian states 7 years to finally come around to the idea of harmonising Right of Way. Do you think we took too long considering where our peers in Africa are on fibre deployment?
We would like to commend the State Governors for reducing the RoW charges for laying telecommunications infrastructure. We believe this move is a step in the right direction and will enable the deployment of fast and efficient infrastructure in the respective states which will ultimately improve broadband penetration, strengthen the technology ecosystem and drive innovation of these states.
Are there states that have stood out for you in this new drive for last mile broadband deployment?
The Chair of the National Governor’s Forum and the Governor of Ekiti State took some bold steps early and that is to be commended. All of the Governors have done well and the Governor of Kaduna State took a leadership position in waiving those fees completely quite early. MainOne was also able to build in Ogun and Edo States because of the cooperation we received from Governors in those states.
What would you say is the biggest achievement of MainOne in the last ten year?
We have had several achievements over the last ten years. Our biggest achievement to date remains building the pioneering international backbone that reduced the cost of connecting our region to the Internet by orders of magnitude thus enabling access for our citizens. We have provided wholesale Internet services to over 10 West African countries and Internet penetration in our region has grown from less than 10% to approximately 40% today. Today, we have 6 cables landing in Nigeria and the country is ranked 7th globally in terms of Internet population. In addition, we have played a major role in enabling the start-up ecosystem which has relied on these critical technologies to deploy their business models.
Tell us about your project with Edo State government and what other states can emulate from?
Edo state identified ICT and in particular Internet Access as critical for creating jobs and growing the digital economy of Edo State. As a result, we partnered to deploy terrestrial fiber to connect points of interest across Benin City, while deploying infrastructure to connect our customers and grow our business. We believe that this partnership has been beneficial in improving the quality of internet access and accelerating digital transformation in Edo State. As the world continues to deal with the new realities (social distancing) caused by COVID-19, governments having access to this kind of broadband infrastructure has become even more crucial to enable online education, work from home, deliver government services andengage our communities We would like to encourage other states to follow the steps of Edo State to avoid getting left behind and ensuring that their citizens have improved access to a world of opportunities online.
What is your plan for the next decade?
We anticipate that the next ten years will be marked by opportunities for growth and market expansion as we continue to provide excellent services to our clients across the region and enable businesses to become even more efficient. As more of our businesses and citizens migrate online, we are expanding our footprint across West Africa, with additional data center investments with expansion of our MDXi facility in Lekki, Lagos, Nigeria and development of a Tier III data center in Sagamu, Ogun State, Nigeria. In addition to this, we are currently building a new data center facility in Appolonia City, Accra Ghana which will be ready for service in the first half of 2021. Finally, we continue to deepen our penetration into the Francophone region with our entry to Senegal and Cote D’Ivoire last year and extension to Burkina Faso earlier this year.
How can we ensure 100% implementation of the new National Broadband Plan?
In order to achieve the targets set in the National Broadband plan, we need private sector companies to increase investment in country and ensure the investments are deployed in areas where they achieve the plan objectives. This will require a greater degree of collaboration between the public and private sector and alignment between business and national developmental objectives.