We address the summit with this connectivity objective in mind based on our experience having raised and invested $240m in the Main One Submarine Cable system to facilitate this same objective.
Having had one year of successful operation behind us, we have proven our ability to deliver what we promise and during this first year, we have connected the majority of the large telecom operators and internet service providers in Nigeria and Ghana to the Main One network. But this is not enough!
We are not pleased with the progress we have made in bringing
broadband services to the overall population in Nigeria because we
hear feedback from consumers daily that they are not feeling the
impact of our network. Nigerian consumers tell us in very clear
terms that they want faster speeds, lower prices and improved
quality from their retail Internet service providers. Recently, a
senior official of a National institution described how he
experienced faster access to the institutions’ web page from
outside Nigeria, than from within Nigeria and how disappointed he
was that critical web sites of National significance are currently
hosted offshore. This is the opportunity that we are here to
address today. Main One as a pioneer in this area has removed the
bottleneck of limited international bandwidth, high cost, and
unreliable connectivity, and Nigerians and the Nigerian economy
need to feel more impact from what we have done.
Why is it important for Nigerians to feel the impact? Drawing on
the example in the United States, which is the most
technologically advanced nation in terms of ICT, the country in
2010 published a National broadband policy because “broadband is
becoming what electricity was to the industry and for economic
development to take place, and to ensure that the United States
remains competitive, we must have easy and affordable broadband
access for all citizens”.
Likewise, the International Telecommunications Union (ITU) has
called for a multifaceted national broadband policy in Nigeria
because they see that it as critical to development. As
stakeholders in the broadband economy of Nigeria, we could not
agree more that there are critical policy imperatives to
increasing broadband penetration in Nigeria which if not addressed
will have an adverse impact on the nation’s development
So, what are the development objectives for broadband and how
exactly do we define broadband?
We choose to adopt a World Bank definition which describes
broadband as an interconnected, multilayered ecosystem of
high-capacity communications networks, services, applications.
These elements create an ecosystem because:
– Investments in high-speed networks improve the quality
of service and promote the creation of even more complex or
– Applications attract more users by increasing the value
of broadband and supports wider investments in networks and
quality of services.
– Wide spread access to services allows users to create
their own content, again driving the demand for high quality
services that can do more than simply download’ content, but also
allow sharing among users. The World Bank has found that in low- and middle-income countries every 10 percentage point increase in broadband penetration accelerates economic growth by 1.38 percentage points-more than in high-income countries and more than for other telecommunications
Developing other elements of the broadband ecosystem also provides economic benefits. For example, the growth of Internet-related
services and applications has created jobs and led to the creation
of new businesses. For example, in November 2009 Google had a
market capitalization of $168 billion ($199 billion July 2011) and
employed 19,000 people in 20 countries. China’s leading Internet
search engine, Baidu.com, has a market capitalization of more than
$14 billion and over 6,000 employees, and in 2008 had revenues of
Annual sales of applications for Apple’s iPhone exceed $2.4
billion, as well as stimulating additional hardware sales.
Needless to say, broadband creates significant economic
opportunities for users, service providers, application
developers, and network operators alike. McKinsey estimates that
?bringing broadband penetration levels in emerging markets to
today’s Western European levels could potentially add US$300-420
billion in GDP and generate 10-14 million jobs.
But perhaps we have heard these statistics before, so let us take a look at some country examples:
Starting close to home in Kenya:
The Kenyan Government recognized the role of ICTs in the social and economic development of the nation and promulgated a national
ICT Policy based on the Economic Recovery Strategy for Wealth and
Employment Creation from 2003. The policy is based on four guiding
principles: infrastructure development, human resource
development, stakeholder participation and appropriate policy and
The policy set goals to create a comprehensive policy, legal and
regulatory framework to:
– Support ICT development, investment and application;
– Promote competition in the industry where appropriate;
– Ensure affordability and access to ICT nationally;
Examples of policy objectives include:
– Providing all primary schools with affordable internet
access by the year 2015; and all secondary schools and tertiary
institutions to have affordable internet access by the year 2010;
– Encouraging Kenyans to participate in the sector
through equity ownership. Consequently, any firm licensed to
provide telecommunication services is required to have at least 30
percent Kenyan equity ownership.
– Facilitate shared infrastructure, right of ways etc.
Needless to say, Kenya is already reaping benefits as a
destination for new ICT investments in Africa today and is being
billed as Africa’s Silicon Savana. For example, within 3 days of
Seacom launching in 2009, Kenya reported an increase in Internet
speeds, Safaricom reported a 200% increase in data traffic and
international bandwidth supply increased by 700%. When Google was
seeking to open a head office for sub-Saharan Africa, it chose
Nairobi with one of the few reasons cited being that the
Government has adopted the Internet as few African nations have.
Same for head office of Airtel Africa and the story goes on.
– Korea is another classic example of a country that pulled itself
up from poverty in the mid-1950s to a booming economy based on
heavy industry and manufacturing in the 1970s and 1980s, then a
pioneer of the information society in the 1990s and 2000s and has
moved from being a middle- to high-income country. The exceptional
success in developing broadband, and ICT generally there is also
based on a mix of highly competitive private-led markets and
government leadership, use, support, and regulation.
The country has seen a transformation from less than 1 Internet
user per 100 inhabitants in 1995 to one of the world’s most highly
penetrated broadband markets. By June 2009 fixed broadband
penetration was 32 percent, and market penetration of 3G services
was 77 subscribers per 100 inhabitants and the highest broadband
penetration in the world.
The rapid growth of demand, driven both by the market and
government use, played a key role in accelerating broadband
development in the early stages of its market development. The key
services that drove the take-up of broadband in Korea were online
trading of shares, Internet-based school education, and online
interactive games. E-government, e-commerce, and e-learning
applications were also important drivers of the high broadband
adoption pursued by the Korean government. For example, all
procurement producers are handled online through the Korea Online
E-procurement System (KONEPS), introduced by the central
procurement agency for access by all public organizations,
including the central and local governments and public
organizations. Since its introduction in 2001, KONEPS has become
one of the world’s largest e-commerce markets, with total
transactions of $34 billion in 2007, when 92 percent of all
bidding was done electronically. ICT also plays a significant role
in education: EDUNET, introduced in 1996, had 5.8 million members
by September 2008.
Another mechanism for government intervention was the
Informatization Promotion Fund, which was introduced in 1993. This
is a Government fund set aside to finance projects fostering
information use. The primary objective of the fund is to ensure
that profits from the ICT industry remain in the ICT industry.
Money from the fund is used to support ICT-related R&D, to develop
and diffuse standardization in ICT industry, to train ICT human
resources, to promote broadband network rollout and to promote
e-Government. The Informatization Promotion Fund includes
contributions from both the Government and the private sector,
through spectrum licensing fees, revenue-based contributions from
operators and earnings from the operation of the fund, including
Finally, these actions were supported by a dynamic regulatory
policy that mirrored the evolution of the broadband market
-By initially providing light regulation to promote competition in
the early, growth, and market maturity stages of broadband,
-This was followed by a period of increased regulation from
2005-07, in response to the growing dominance of KT and operators’
-Finally, the market saw a return to lighter regulation in some
areas as the market matured in 2007.
Finally, we focus on Singapore where the Infocomm Development
Authority is guiding the implementation of a National Broadband
policy that includes the implementation of a new national backbone
network that will reach every household and business in Singapore
with fiber with a 1 Gbps connection by 2013. The project is
partially funded by the Singapore government and on top of the
pyramid sits a service company to provide wholesale and backbone
services on an open access basis and level playing field to all
comers at the retail level. The service company is a private
consortium with government funding.
Needless to say, there are numerous models with further examples
of broadband strategies from countries including France, Japan, UK
and neighboring Ghana.
So, where does that leave us in Nigeria?
Given our broadband penetration rates of less than 3% or no
significant measure, we believe there is an urgent need to develop
and implement a National Broadband policy under the auspices of
the new ICT ministry.
The policy needs to:
a.. Create demand and drive promotion strategies by allowing
government intervene in market creation and facilitation, by
promoting broadband adoption and use; make broadband access and
services more attractive and accessible to potential subscribers
and users by helping to lower prices, putting public services
online, and encouraging the diffusion of access devices such as
b.. Establish an enabling environment for competition and
investment by removing market entry barriers with supply-side
policies that enable the development of access to
broadband-enabling network operators and service providers to
enter the market easily, operate on a level playing field, and,
where necessary, provide financial support to reach high-cost
areas. We believe the situation where calls from Lagos to London
cost less than calls within this room in Lagos must stop. Bulk
capacity has no valid economic reason to cost more from Lagos to
Abuja than Lagos to London. Based on global best practices,
policies that facilitate competition are the most typical and
important and have been implemented consistently and
compellingly from the initial to maturity stages of market
development to drive growth. Such Government policy support
allows new market entrants to compete effectively with dominant
incumbents such that economies of scale and network
externalities do not play significant roles in determining the
success of communications providers.
This is the broadband policy imperative for Nigeria.
First, for visionary leadership to set ambitious goals for
broadband penetration and devise and actively implement strategies
to achieve e.g. 40 % penetration nationwide, Access to all
geo-political zones and indeed all local government areas and
interconnection of educational institutions, especially from
secondary to university level.
Next, is for competition policies to promote market growth by
facilitating shared access and fair pricing of terrestrial
backbone networks which dominant operators leverage to block new
competitors. Indeed, the collapse of Multilinks shows that
building a national backbone is no assurance of commercial
success, though lack of access proves a high barrier presented by
existing facilities based operators to block out new players.
Recall the battle between GSM companies at inception and NITEL
over interconnect; and
Finally, for the government to facilitate demand through the
funding of initiatives in ICT adoption, e government and e
commerce in order to create local content and jobs.
We hope that in 2020 when ten years of Main One cable’s operations will be celebrated, the implementation of these policy initiatives
will have reshaped the history of broadband in Nigeria.