Quality of service in the telecom sector has been a hot button issue since 2001. Why is the problem so intractable
I think the issues around quality of service border around two things: one, there isn’t enough capacity; and secondly the availability of that capacity. So two things, capacity and continued availability of that capacity. The issue of capacity essentially lies in the hands of the operators. It is for us as operators to get a good understanding of the demand and put in the capacity to meet that demand. The good news is that operators have the resources to install the required capacity but the reality is that it is extremely difficult to put infrastructure in the ground in our environment.
The same sort of infrastruture challenges that have bedevilled the power industry also affect the telecomunications industry.
Telecoms infrastructure cannot exist in vacumm and there has to be parallel growth in other sectors for the full realisation of the benefit of increased rollout. Beyond that, when we are even able to put the infrastructure in the ground, the challenge then becomes making it available to carry traffic. The litmus test is then to ask if that additional capacity is available to relieve the congestion in the network.
We are finding ourselves in a situation where operators are building base stations, integrating them into our networks, but because of circumstances beyond our control, that infrastructure is not carrying traffic. And if that infrastructure is not carrying traffic, it is not relieving congestion. Then we begin to see the challenges in terms of quality of service. Definitely, customers’ experience will be very sub-optimal.
When you say they are not carrying traffic, what exactly do you mean?
When you are building a network, you need to make that network available to carry traffic. It needs to be integrated; it needs to be carrying traffic, and subsequently relieving congestion. We find ourselves in a situation where, because of a lot of extraneous circumstances, a lot of infrastructure are not carrying traffic for no fault of the operators’. If you look at the North-East, we have about 200 base stations that are not available to carry traffic today because of the problem of insurgency, and the attacks on our base stations.
We also have a lot of base stations that are sealed up by different agencies of government. Again, this is contributing to lack of capacity. Then, you have the day-to-day problems like community lock outs, area boys’ agitations, etc. All those things are also negatively impacting networks. I would say in a nutshell, those are the two major factors impacting quality of service, and we need all stakeholders to resolve those issues.
Let’s go back to the issue of non-availability of infrastructure. Can we put a figure to the facilities not currently engaged in the MTN network
The effect of the attacks we suffered in the North is two-fold. One, there were sites that were directly attacked and destroyed. And then, some of those sites have dependent sites. So if it is a hub site that has gone down for instance, it means that all the other sites relying on that for their microwave transmission will also go down. They will be blind to the network. They will be unavailable to carry traffic. You will not be able to terminate traffic into the communities they serve. Off the top of my head, I can tell you that at the peak of the insurgency attacks, we probably had up to 450 or 500 base stations that were thrown out of the network. Now, this has a major impact on the quality of service. And also, because people are investing resources and those resources are not generating any revenue, it puts your business model in jeopardy. It also means that, one; people are cut off from the network. And then there are people who are also trying to reach them, who keep trying and then contribute to further congestion. So it’s a double blow.
Let’s look at the network modernisation project that MTN is implementing. How is it going
I’d say it’s going quite well. Of course like any other major project, it has run into a few hitches here and there. We set out to do about 5,500 base stations. I would say that today, we have close to 4,700 that have been modernised and upgraded. We are in the last quarter of the project now. We envisage that we will be done in a couple of months, barring any unforeseen circumstances.
What specific challenges are you currently facing in the course of implementing the project
Because it’s an extensive modernisation, comprising upgrade and swap-out of existing network elements, there are bound to be issues. We are prepped to deal with the issues that a prudent manager can envisage. The ones that we do not have everything at our disposal to fix are the environmental issues. We saw flooding in the course of 2012, which in some areas, stopped the work completely. We also found that in some areas where we have completed a swap-out, as a result of complete erosion of our fibre system, we have not been able to get the benefit of the sites that we have put up. There have also been community issues, in certain parts of the country. In the South-South, and in the East, there has been the growing incidence of kidnapping and exposure of our employees. We have actually suffered fatalities in the course of the swap-out and modernisation. What we have had to do is to change the work hours. Initially the plan was to work overnight in a lot of places, but the security situation does not allow that.
MTN announced that about $1.3 billion would be spent on its network last year. How much of this has been spent
I am happy to report that we were able to capitalise that entire budget. It was unprecedented in the history of telecommunications in Nigeria for anybody to take that amount of investment and put it in the ground. You are seeing it in the ground in terms of new base stations, in fibre roll-out and a lot of other things. In addition to our budget in 2012, we also had a carryover from 2011, which was about 300,000,000 USD. We were also able to capitalise that. So, looking at 2012, I can say that our capitalisation was close to about $1.65 billion.
What is MTN looking at spending this year
We will be spending $1.583 billion in 2013. We are going to be building a lot more base stations than we have ever done in the history of this organisation.
The numbers are verifiable. We are keeping our regulator updated. We are sharing information as soon as the sites are up with the regulator. We are not a company that counts sites that are in build. We count sites that have been integrated and are carrying traffic. So, it’s fact and figures.
What is the status of WACS now
WACS is live and carrying traffic for MTN and a lot of other operators. A lot of people have both live and redundant capacity on WACS. WACS has delivered on expectations. The bandwidth pipe coming into Nigeria has increased.
Why has there not been any dramatic difference in Internet experience
Your bottleneck is not at the WACS end. Your bottleneck is between where WACS terminates on the beach and where you are using Internet service. If we had a situation where all my backhaul was done by fibre and all the base stations were connected by fibre, and then connected to the base station controllers (BSC) by fibre and then to the switch by fibre, the speed would be awesome. Although we are able to land the speed at the beach, to distribute it inland as effectively as we would like remains a challenge.
Given this situation, what would you be saying to the NCC and other stakeholders.
For us to achieve what we are all trying to in the area of broadband, we need a lot of fibre in the ground. We need a concerted effort; NCC to support the operator, to support the private sector to roll out this fibre. We need the involvement of the state and local government. We need to take away the hand-cuffs and chains impeding roll out of fibre, such as prohibitive right-of-way costs, etc. We need the cost for right-of-way in Lagos or in Kano or any other city in Nigeria not to be more expensive than the cost for the right of way in New York. We need to have affordable fibre in the ground. That will translate to affordable bandwidth and a much better experience.
What is MTN doing about local content
The reality is that nobody can operate in an environment without using local resources. For us as a business, we have also gone beyond patronising people just for the sake of patronising them. We believe that there is significant value-add by using local contractors. They are very competent and able Nigerians. We have worked with a few partners, and as our business has grown, their own businesses have grown tremendously.
We see them in different areas of our business- in the areas of network build, information systems, marketing, sales and distribution. We are working with Nigerian partners. Recently, there has been a lot of clamour for more Nigerian participation and local content.
I can share with you that while a lot of our competitors have handed over their entire network build to foreign OEMs, (we have also handed over a considerable part to the OEMs, which in this market are typically the Ericssons, Huaweis and ZTE).
But what we’ve also done is that a significant amount of the build for 2013 will be done by local contractors, by companies beneficially owned by Nigerians. So there is a lot of value-add in that space. And if you look at a lot of our partners, in the IS space for instance, Computer Warehouse Limited is a company that has grown its business, and I dare say with every sense of responsibility, because of its relationship with MTN Nigeria. Computer Warehouse is now recognised as an African powerhouse in the IS space.
These are the sort of things that give us a lot of pleasure.
interview with BEN UZOR JR,