Anudu: Internet is Not a Luxury, But Growth Enabler

Managing Director/CEO of Swift Networks, Mr. Charles Anudu, spoke with journalists on the introduction of Red Cheetah, which allows consumers’ access to free Wi-Fi at designated hotspots in Lagos. Jonathan Eze presents the excerpts:

Can you tell us more about the Red Cheetah service and how it works?

Red Cheetah is arguably the most ambitious free Wi-Fi service to ever emerge out of the shores of Nigeria. That is because Red Cheetah offers so much more than what the existing, regular free Wi-Fi service providers’ offer, especially in terms of capacity, speed and user experience.

Our objective is to make fast, reliable and secure broadband access available to Nigerians at no cost while creating measurable value for brands that support the platform. For us, this service not only complements the revolutionary democratisation of information in our fastpaced, digital economy, it also empowers individuals to connect, explore the world and play participatory roles in global democracies and economies.

We understand that internet access is no longer the exclusive preserve of the rich. Even the United Nations now sees denial of access to the internet as a breach of human rights. We are confident that it is only when a society is thoroughly empowered with access to the right information and opportunities that true economic development and social inclusion can happen. We want to drive that revolution by putting our customers first.

Users are required to download the Red Cheetah app on Google Play Store and go through a one-time registration process to enjoy this free access in our hotspot channel locations across Lagos. The app version gives superior customer experience.

How will this initiative help to achieve the 30% broadband penetration ambition of the federal government under the National Broadband Plan?

Red Cheetah is a timely intervention in a country where broadband penetration still hovers at around 21%. We felt we needed to turn up the dial since Nigeria’s transition to a knowledge-based economy rests firmly on the quality of broadband access available to the citizens. We have been able to evolve a technology and business model that helps drive internet penetration to the various segments of the Nigerian society.

We started from Lagos. So far, our hotspot locations are expanding by the day and we encourage more businesses to take advantage of this offering to delight their customers with free broadband Wi-Fi. We believe that by the time we reach our 10,000 locations target, we would have succeeded in plugging in a substantial percentage of Lagosians to the Red Cheetah service. That is massive vision in terms of user base.

We also have aggressive plans to extend the offering to other major cities in the country and boost the democratisation of information and opportunities to Nigerians. We are confident that by offering free Wi-Fi service to Nigerians, we would have succeeded in helping to scale up Nigeria’s broadband growth as encapsulated in Nigeria’s 5-year broadband plan.

What is the prospect of this initiative, vis-a-vis the poor infrastructure level of the country?

The problem of poor infrastructure in Nigeria is not peculiar to the technology industry alone, it is a common fly that perches on almost every Nigerian sector - from manufacturing to aviation, tourism, etc. But it must be noted that the slow pace we have witnessed in the licensing of infrastructure companies to build fibre infrastructure has derailed progress envisioned by those who drafted the Nigerian broadband plan.

Despite these challenges, we see the immense opportunities offered by the platform. Recall that the strategic thrust of the Red Cheetah service revolves around its free model which in turn translates to value for the users and of course, the brands that support the service through advertising revenue. So, we believe the initiative is very sustainable considering that the future of revenue generation for start-ups hinges on the “freemium” economy model - the same model used by the likes of Facebook, Google, YouTube, etc. You get someone else to pay for someone’s usage of a critical service.

What motivated your company to introduce this product?

Our purpose as a company is to connect Nigerians to the digital society and economy and to ensure that nobody is left behind because those excluded will suffer severe disadvantages. So it is part of our social responsibility to ensure that as many people as possible are availed of the benefits of the fourth industrial revolution.

The instinct of most people nowadays is to look for a free wifi service once they get into any public or enclosed space. This is true for those who can and those who cannot pay, from our studies. Red Cheetah exists to meet this need.

As a free Internet platform, consumers will likely be skeptical about its security, how is the security and speed guaranteed?

We have addressed from the outset any possible skepticism, especially as regards users’ privacy and security while using the service. That is why Red Cheetah was painstakingly developed in such a way that the app establishes a unique and secure Virtual Private Network (VPN) connection to the internet for each distinct device on the platform. We value the security of our users and that is one of the reasons why we spent over two years building and fine-tuning what we believe will be most effective and secure internet service for Nigerians.

For speed, Red Cheetah is powered by one of Nigeria’s leading broadband service providers that have differentiated itself on speed, SWIFT Networks. So, we are going to replicate the same speed for which SWIFT has been known over the years. Millenials, who form the chunk of our target users, are particular not only about the quality of service delivery; they are also interested in the speed and overall experience. Consequently, we have tailored the service in such a way that it offers a remarkable experience every time. We have a robust customer services unit to ensure fast and timely resolution of any issue the users might encounter in the course of using the service.

How do you think this product will deepen internet usage which will lead to more economic activities and contribute to economic growth?

Even though internet users rose marginally to 98.3million in December 2017, the bulk of what these Nigerians have is access to narrowband internet that limits the digital experience. Where broadband exists, it is unaffordable. We want to change that narrative for good. So, Red Cheetah is a strategic intervention to shore up the numbers, empower about many more Nigerians with access to opportunities and contribute to the nation’s economic growth.

Remember that every time a developing nation achieves a 10% rise in broadband penetration, it triggers a corresponding 1.3% increase in the nation’s GDP. We recognise that Internet access is the heart and soul of the fourth industrial revolution and to play effectively in that revolution, we must begin to see internet no longer as a luxury, but a Growth Enabler that should be available to every citizen.

What could be responsible for high cost of internet service in Nigeria and what kind of government policies are expected to change the situation?

Contrarily, the cost of internet service in Nigeria is one of the lowest anywhere in the world, notwithstanding the cost structure here. In fact, a lot of the prices in the market are below the cost of providing them. For the native broadband service providers like SWIFT, the cost of generating 1 Gigabyte of data is about N650 but our selling price is far below this. The same is true for the other service providers.

There are many reasons for the high cost of providing internet service in Nigeria among which are shortage of electric power, security, exchange and interest rate costs.

Power is a major cost driver for the operators because the entire telecom industry virtually runs on diesel generators. Accordingly, with any devaluation, the price of diesel jumps higher and the operators take the hit since their revenue is in Naira. Recall that a significant quantity of the diesel at the base stations is stolen. Not counting the cost of maintaining and replacing these many generators that keep the networks running.

Secondly, since the equipment is not made in Nigeria, they are imported at unfavorable exchange rates. So each time there is devaluation, the operators also take a major hit.

Additionally, the operators borrow funds to build and run their networks at unimaginable interest rates. There is no way you can run such a capital intensive business at the current interest rates that challenge most of the operators’ balance sheets.

Then the problem of vandalism is there to contend with. Every fibre you lay is likely to be cut by contractors undertaking public works or malicious and mischievous people who wantonly steal or destroy telecoms infrastructure.

The problem of multiple taxes is also a nightmare that most operators live with. I cannot tell you today that I know fully all the taxes that our industry is subject to and varies from place to place. Up till now, a matter as simple as the right-of-way to lay fibre and other critical infrastructure to drive up authentic broadband services is not harmonised. Each state has its own rate and operators are constantly being harassed by all manners of revenue agents that invent all sorts of levies in the name of internally generated revenue. Some states like Lagos and Kaduna have however been good exceptions.

To lower internet cost for Nigerians, we need good synergy between the government and the private sector to build and protect the critical infrastructure required for telecoms services. We need telecoms infrastructure to be declared a critical national infrastructure that should enjoy government protection like petroleum pipelines and electricity power lines.

We also need an intervention fund at a single digit interest rate to enable operators refinance their high cost short term debts to accelerate network expansion.

The right-of-way harmonisation is an issue that is long overdue and the state governors need to attend to it urgently because the availability of broadband is bound to bring more economic and social development to their states. It could also be a key decision driver for some investors and can stimulate entirely new services and industries in some unlikely places to create jobs and integrate the state to the emerging digital world.