• Friday, May 24, 2024
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Tijani’s bold moves face old threats

How to know if your startup qualifies for seed funding, tax perks from FG

Bosun Tijani, minister of communications and digital economy, has been vocal about his ambitions for the country’s digital landscape. But whether his key reforms will succeed or not depends on how he addresses the threats he inherited.

One of those critical reforms was disclosed at the just-concluded Africa Internet Governance Forum in Abuja. According to the minister, Nigeria will subscribe to a free and secure internet for Africa, which can bridge the digital divide and create innovative opportunities within the continent.

“The need for our consistent collaboration to develop our economy collectively is preeminent in the agenda of the current administration in Nigeria. It is through this kind of forum that we can bridge the digital divides, enhance cybersecurity, ensure digital rights and foster innovation,” Tijani said. “It is, therefore, our collective duty to ensure that the internet remains open, safe, and beneficial for all.”

Tijani faces old foes

Umar Danbatta, executive vice chairman of the Nigerian Communications Commission (NCC), shed more light on the plan. According to him, a secure internet ecosystem in Nigeria would be achieved through various regulatory initiatives. Efforts to get further clarifications from the minister on the initiatives being expected were not successful.

The country’s telecom industry is struggling. For example, 9Mobile which used to be the fourth-largest operator in the market, may struggle to remain in the market with the rate of decline in the number of subscriptions. The telecommunications company has lost 13.22 million internet subscribers in 8 years, dropping from a peak of 17.19 million subscribers in April 2016 to 3.97 million in July 2023. The company lost 3.1 million subscribers in less than three years, between December 2020 and July 2023. If nothing is done, and the decline continues, 9Mobile may only have three years to lose the last 3 million subscribers on its platform.

MTN, Airtel and Glo, which have seen relative internet subscriber growth in the first seven months, are also grappling with different problems, including low profit, vandalism of infrastructure, inflated cost of operation, and mounting debts, forcing a rethink in investments.

Generally, broadband penetration is dragging as investment in infrastructure slows. Broadband penetration dropped to 47.01 percent in July 2023 from 48.20 percent in January. Broadband subscriptions, which grew to 90,398,960 in December 2022, dropped to 89,730,341 by July 2023.

Read also: Telecom voice subscribers decline by 2.4% in seven months

It is a significant decline for the industry, considering that within the same period last year, broadband penetration had already grown from 41.61 percent in January to 44.49 percent in July, adding about 4 percentage points. Broadband growth rose to 47.36 percent in December. Broadband subscriptions increased from 78,041,883 in December 2021 to 90,398,960 as of December 2022.

Nigeria ranks 88th in the world in Surfshark’s 5th annual Digital Quality of Life Index, dropping by two places from last year. According to the latest report, fixed internet in Nigeria averages 25 Mbps. To put that into perspective, Singapore, which is home to the world’s fastest fixed internet, averages 300 Mbps. Mobile internet in Nigeria averages 47 Mbps, whereas the fastest mobile internet – the UAE’s – is 310 Mbps.

Nigeria’s mobile internet is also 31 percent slower than that of South Africa, while its fixed broadband is 64 percent slower. But the report also acknowledges that Nigeria’s mobile internet speed has improved by 87 percent, while fixed broadband speed has grown by 33 percent. Notwithstanding, the country continues to languish at 104th position in the world for mobile speeds and 143rd for fixed broadband speeds as of August.

The ministry Tijani inherited is bugged down by many challenges left unresolved by previous ministers despite making big promises. There is still no progress in resolving the right-of-way fees that operators face. Anambra State recently announced it would charge zero fees for laying fibre cables by operators in the state. The state however said it is prioritising public institutions within Anambra. Before the Anambra State announcement, only about three states had implemented pledges to reduce right-of-way fees made to the previous minister Ali Isa Pantami. Those implementations have since been put on hold following the change of governments across the states.

Tony Izuagbe, president of the Association of Telecommunications Operators of Nigeria, who described the plan for free internet as a welcome development, said the biggest issue facing the industry today may not necessarily be how to make internet free rather it is access to the internet, which is a function of the availability and resilience of infrastructure.

The amount of investment into the telecoms industry in 2022 declined to $399.9 million, the lowest in recent years, from $753.044 million in 2021. In 2019, capital inflow was at $942.8 million but it declined to $417.6 million in 2020.

The decline in 2022 is particularly significant because it was the same year that the country issued 5G licences to three operators. Two operators, MTN Nigeria and Airtel, have so far launched 5G networks in the market. But from the level of investments made so far for a capital-intensive network, it may not be surprising that 5G penetration is at 0.13 percent as of July 2023.

To address access to the internet in Nigeria, Tijani would need to devise a different approach to getting governors to remove the obstacles to infrastructure investment and deployment. Apart from arbitrary right-of-way charges, there are states that are taking other steps and adding new layers of difficulty to fibre deployment.

Read also: Local content hosting can generate revenue for internet providers – IXPN

For example, Lagos State’s plan for a unified cable duct has yet to go mainstream three years after it was announced, and there is no clarity on how it would work and the cost to operators. The project is projected to gulp over $200 million, a cost that will eventually be transferred to telecom operators before they gain the right of access. In 2022, Adeleke Adewolu, commissioner for stakeholder management at the NCC, said the project would create a monopoly situation, which allows a single player to unilaterally fix prices and set access terms as it deems fit. The uncertainty over when the project will be completed means that operators are unable to deploy new infrastructure across the state for the entire period it would last.

Tijani has started out with lots of activities built around the tech community, including meeting leaders in the ecosystem and taking them along on his international events where they are projected as the future of Nigeria’s fledgling economy. Apart from his previous experience in the tech community, he is probably banking on their support to achieve the ultimate mandate of 1 million digital jobs by 2025. But the tech community needs solid infrastructural support to help the minister, but it is not in their hands to build the infrastructure.

He has met with operators in the telecom industry a few times and probably plans to meet them more in the future. But would he be more resourceful in addressing issues in the industry? That’s the question many operators want answered.

A source close to the minister said Tijani plans to unveil his strategic plan on October 2.