Is Talk Cheap? Nigerians Spend N447.8bn OnRecharge Cards Monthly’

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A workshop organised by the Nigerian
Communications Commission, NCC, weekend, to
educate Nigerian Legislators on some intricate
parts of telecom business/investments,
incidentally exposed that Nigerians make a
massive monthly investment of over four hundred
billion naira on recharge cards alone.

This whopping sum, may have demystified the age
long cliché that ‘Talk is cheap’. Besides, the
investment on recharge cards, surprisingly
dwarfed the ones made on House Rent, Petrol,
Kerosene and electricity –options, known to have
squeezed the economies of average Nigerians for
several decades.

From the statistics of an ICT expert, Mr. Gbenga
Oyebode of Aluko &Oyebode law firm, Nigerians
spend 149.1bn on House rent, 128bn on Petrol,
144.8bn on Kerosene, and 91.8bn on electricity
monthly.

At the workshop themed: “ICT infrastructure as key
driver for economic development: what role for the
legislature?” Oyebode reeled out these figures to
postulate the impact of ICT infrastructure on
economic development.

However, he noted that “a study by the
Organisation for Economic Co-operation and
Development, OECD, shows that broadband
penetration contributes significantly to economic
growth. But notwithstanding all of the potential of
ICT to GDP, Nigeria still lags behind due to
insufficient development of ICT infrastructure.
Today, broadband penetration is estimated at 6%
in Nigeria.

Another facilitator and Principal Partner, Kayafas
Konsult Ltd, Mr Stephen Bello, also echoed
Oyebode’s view that broadband is at its infancy in
Nigeria with less than about 2% of the population
having access to it.

He however added that the cost is still exorbitant
even for corporate bodies. “We are still far from ITU
targets which recommend that 50% of citizens and
40% of households by 2015 should have access to
broadband.

However, the recent policy framework and
spectrum auction by NCC are designed to boost
broadband availability in Nigeria.”
Meanwhile, the Executive Vice Chairman of the
NCC, Dr. Eugene Juwah while briefing the
legislators at the workshop said that the Nigerian
National Broadband Plan seeks to promote
broadband deployment, increase broadband
adoption and usage, and ensure the availability of
broadband services at affordable prices. Juwah
argued that the effect of this would be an increase
in competition in the industry, a downward impact
on prices, and improved quality of services to
subscribers.”

The workshop also provided operators the
opportunity to give their perspectives on the Open
Access Model of the NCC, meant to deepen
broadband penetration. In a paper
titled:Broadband and Infrastructure development
in Nigeria: Operators’ perspective of the Open
Access Model, Executive Officer, MainOne, Ms.

Funke Opeke, contended that “operators have had
a mixed reaction to the Open Access model. Large,
incumbent operators with most of the existing
infrastructure have not been very enthusiastic
about the plan. Since open access will drive
convergence of infrastructure costs to a common
benchmark, it will become increasingly difficult to
gain benefits from proprietary infrastructure,
higher tariffs, which make it difficult for new
entrants/smaller players to participate in the
telecoms value chain in Nigeria. Currently, the
bigger you are, the more you can maximize value
across the entire value chain, from value added
services like ring tone, content distribution, to
network connectivity services, corporate
connectivity, Internet service.”

She also added that “open access implies barriers
to entry will not be as high and thus new players
could come into the market if they think they can
do better without having to build out and replicate
the infrastructure owned by any of the big boys.

Smaller players are excited at the opportunity –
but daunted by the challenges and need support.
The example of Superflux is a good one. Indigenous
entrepreneurs that are raising money locally will
need support if we do not want to stifle their
growth. This is a proven model in other parts of the
world, so we need government to support them.”

Joseph Tegbe of KPMG, also made a case for the
Open Access Model. Based on the various
challenges in the country and the trend of
deployments in other jurisdictions, he sought to
convince the lawmakers that the Open Access
Broadband Deployment Model is suited for Nigeria
as it wouldthe gaps in broadband deployment,
through the deployment of new fibre and
leveraging existing fibre infrastructure;available
the new network infrastructure and services to all
telecom operators on a fair and non-discriminatory
basis at a regulated price; minimise duplication of
rollout and unnecessary environmental impact;
Help realise the objectives of the National
broadband plan with a minimum broadband speed
of 1.5 Mbps to the general population; Facilitate
faster and wider broadband penetration nationwide
andsharing of infrastructure.

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