broadband nigeria: the journey ahead

BROADBAND NIGERIA:THE JOURNEY AHEAD

Austin OkereC.E.O. COMPUTER WAREHOUSE GROUP

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A cry for help

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broadband statistics SPEEDS (mbps)

Ghana - 10.1South Africa - 2.95Nigeria - 1.38Global average- 8.48

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Broadband in Ghana

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Broadband in SA

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Broadband in Nigeria

Network service providers entrepreneurs in in the value chain More providers means

More infrastructure to increase accessMore competition to decrease prices

Possible interventionFacilitate market entrySupport sustainable existence of all

playersSegmentation for fair competition 8

Ample capacity at shore International access is good Very good submarine and satellite

capacity One operator has 1.92 TB A second consortium is adding 5.0TB an operator spent $250m on undersea

cable Prices have gone from $1300 to

$350/mbps Yet only 2% of capacity inshore Price target of $86/mbps based on supply Prices may reach $25/mbps with right

volume

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capacity limitations Inland

Some problems along the way… NLDO is challenged There is core network fibre to 27 states Operate as islands Cost is high (4 times international trunk) Access is discriminatoryPossible intervention

Open Access National BackboneInterconnectivityEstablishment of price framework

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More bottlenecks on the way RLDO is seriously challenged Some states not linked to the National

backbone Many key cities yet to be linked Right of way hindrance & cost Lack of national interconnectionPossible intervention

Fiscal incentive (long term loans, USPF)Right of way support/incentive 1

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Metro Distribution is worse hit… Less than 6% penetration Interconnection issues Right of way and barriers to deployment Multiple and illegal taxation Multiple regulation e.g. Masts & Base

stationsPossible intervention

Fiscal incentive supportSimplification of licensing processSolving right of way and taxation

issues

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Metro Ring Provider

Race to the Bottom Major concerns

Majority of service providers have become moribund substantially lessening competition Almost all medium sized operators (mostly Nigerian start

ups) are failing This group is critical to vibrant competition and prevention

of oligopoly in the market Possible intervention

Closer regulation of anti-competitive practices Fiscal incentives through special purpose funds e.g. USPF Dealing with transmission market incongruences in prices

and access Digital Access Broadcasting policy and regulatory

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The Rat Race…

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Thinking outside the box

Crux issues role of Government Role od service providers Requirements of service providers to

Roll out to rural areasUnderserved areas

Possible quick wins Establish true cost of right of way (1 km of

Fibre) How to optimize frequency segment 1

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