Marinho: Access to Finance Remains Challenge for Start-ups
Founder and Chief Executive Officer of Fiam Wifi, Mr. Akin Marinho, in this interview, speaks about how majority of Nigerians are penalised for buying data in small bits, and the need to make internet access affordable for rural dwellers. Emma Okonji pres
You recently launched an internet connectivity service in Lagos with plans to offer the service in densely populated communities. Why target rural communities?
I started Fiam WiFi in 2017 after leaving Capcom Telecom as Head of Business Development and Strategy in 2016. There are two co-founders, Robert Jibunoh, a former colleague from my time at FBN Capital, who is our chief financial officer (CFO) and Tola Fadeyibi another former colleague of mine from my days as a lawyer and she is our chief operating officer (COO). We currently have about 80 employees.
Fiam WiFi provides internet connectivity by installing Wifi hotspots to high density lower income communities and rural communities. We were licensed by the NCC in 2018. We commenced full commercial operations this year after spending the last few years perfecting our business offering. We have installed 25 WiFi hotspots in Ajegunle, with plans to install another 150 in Ajegunle before the end of the year.
I have 25 years legal, investment banking, private equity and telecoms experience gained from working in the United Kingdom, the United States and Nigeria. In the United Kingdom, I worked for one of the largest law firms in the world working on mergers and acquisitions and private equity transactions. I also worked at FBN Capital, the investment banking arm of First Bank as General Counsel and Company Secretary for a few years and RMB Nigeria as one of the pioneer staff. I left banking as a deputy general manager. My seven years of work experience motivated me into launching Fiam WiFi.
Why did you decide to go into WiFi hotspot?
The majority of Nigerians access the internet through a smart or feature phone and they typically buy data as and when they need it and usually 1GB at a time. The price for 1GB typically ranges from N300 to N1000 and these plans are usually time sensitive such as daily or weekly validity. People who can afford to pay N10,000 or N20,000 at a go for a monthly plan will pay about N150 per GB depending on which network they are on. In addition, the average Nigerian who earns N30,000 or even N50,000 a month won’t be able to afford a N10,000 unlimited data plan as they have other expenses to take care of. Therefore, the vast majority of Nigerians are penalised for buying data in small bits. This we believe is unfair. Access to high speed internet should be available for all irrespective of ethnicity, class, gender and age. The benefits of high-speed internet are well proven and the World Bank, the United Nations and other organisations such as our partners at the Alliance for Affordable Internet, the United States based non-profit, have studies which show this and that 1GB needs to be priced at below 2 per cent of income. We will be, subject to NCC approval, offering 1GB at less than one per cent of the national minimum wage - N200 for 1 GB of data. Our pricing is clear, simple and transparent and we don’t have time sensitive plans. Our data plans have no expiry or validity period.
How commercially viable is this business especially your areas of coverage?
Our initial target market is Lagos and other high-density cities outside Lagos. Our strategy is to create a community network. Currently, we operate in Ajegunle and 90 per cent of our staff for Ajegunle business FiamWifi AJ City Internet, all live in Ajegunle. This means our customer engagement team, our site and technical maintenance teams are all residents of Ajegunle, so we create additional employment in the communities we serve. This is the model we will roll out across Lagos and beyond.
What makes us unique is our strategy. We drive down the cost of delivering connectivity to communities and ensuring we integrate into the communities we serve.
How will people be able to pay to access your hotspot service?
We have a dedicated team of sales agents on the ground and we have a number of recharge sellers who also sell vouchers for other networks. Customers will also soon be able to buy vouchers online.
What is your rollout plan and roadmap, since you are beginning from Lagos State?
We plan on covering as much of Lagos State as possible over the next 18 months. We will have operations in every local government in Lagos. We get messages everyday from people who have used our service or heard about our service asking us when are we coming to their community. In addition, we are also looking at places outside Lagos.
How much are you investing into your expansion both on the short and medium terms?
To date we have boot-strapped to about $1 million, which has come in mostly from the founders and some friends and family. We are looking to invest about $10 million over the next few years via a mix of debt and equity.
In developed cities across the world, WiFi hotspot is the easiest way of connecting people to the internet. Why is Nigeria lagging behind?
Power is one issue, the issues of limited grid power in Nigeria is a problem for all businesses so we power each of our hotspots using solar, inverters and batteries. Access to affordable smart phones is another factor. Recent studies have shown that in Africa it can take someone 100 days to work to afford a smartphone whereas abroad it is likely to be a few days. Access to finance for companies like ours is another issue. As a former investment banker, I was surprised at the number of times over the last year we have had meetings and discussions with banks and other financial institutions and they all declined to provide capital to our company to scale the business. Even though we had invested $1 million of our own money with a clear business model which was being executed and which was generating revenue. The common feedback was we don’t lend to start ups or your revenues are not significant enough or this or that reason or they ask you to bring collateral. I think this is the challenge many entrepreneurs face trying to start disruptive business in Nigeria. It is much easier also to find angel investors and institutions abroad who are prepared to take a risk on a start up in a capital-intensive business like ours. Rejection made us strive harder and we wouldn’t be where we are today if the road had been easy.
What do you think the government and investors should do to bridge the digital divide in Nigeria?
My view is that government can’t do everything, but it should create an enabling environment for business to operate and thrive. It’s only private finance that can bridge the digital divide. The larger telcos all mention Right of Way as an impediment to bridging this digital divide. Lagos State is at the forefront of this with its Unified Duct Initiative, Ekiti State and some other states have reduced its ROW charges. So, things are moving in the right direction.
The 2020 Edelman Trust Barometer on Nigeria has revealed that, of the four mainstream institutions of government, business, media and non-governmental organisations, government remains the least trusted with Nigerians having no confidence in the ability of current leaders to successfully address the country’s challenges.
Conversely, Nigerians’ trust in Chief Executive Officers of businesses as positive change agents rose while trust in NGOs and the media also increased.
These revelations amongst others were contained in the 20th Edelman Trust Barometer Survey Report themed ‘Competence and Ethics’ unveiled virtually by Edelman and its Exclusive Nigerian Affiliate, Chain Reactions Nigeria, in Lagos recently.
The Edelman Trust Barometer is the annual global trust and credibility survey conducted by Edelman Intelligence, the independent research arm of the Edelman global network testing how well people trust those four critical institutions of the society to do what is right. This year’s survey conducted by Edelman Intelligence between October 19 to November 18, 2019, sampled more than 34,000 respondents across 28 countries.
The presentation done virtually saw the Chief Executive Officer of Edelman Africa, Jordan Rittenberry, present the global 2020 Edelman Trust Barometer and the Impact of COVID-19 on Trust reports. A Consultant at Chain Reactions, Adekunle Dixon Odukoya, presented the supplementary data for Nigeria.
An all-female panel drawn from government, media, business and civil society also discussed the survey report and its implications for Nigeria in line with the theme, “Competence and Ethics.”
They were Special Adviser to President MuhammaduBuhari on Social Protection and former coordinator of the National Social Investment Program (NSIP), Mrs. Maryam Uwais; Director, Public Affairs, Lafarge Africa Plc, Folashade Ambrose-Medebem; Director of News, TVC, Stella Din Jacobs; and the Convener, Enough is Enough, YemiAdamolekun. Erstwhile Assistant Director of Programs at The Federal Radio Corporation of Nigeria, FRCN, Funke Treasure-Durodola moderated the presentation.
The supplementary data for Nigeria showed that while trust across the four mainstream institutions in the country increased compared to 2019, business still led with 91 per cent followed by NGOs with 87 per cent. The media was the third most trusted institution with 84 per cent while government only had 55 per cent.
The 55 per cent level of trust in government in Nigeria is actually better when put into context against the global average with a general level of distrust of government in 17 of 28 markets that recorded 45 per cent and lower. interestingly, South Africans returned a 20 per cent level of Trust in their government.
In a further vote of confidence in private sectors leaders, the survey revealed that 87 per cent of Nigerians trust CEOs to successfully address the country’s challenges while 86 per cent trust journalists. 82 per cent trust religious leaders, 75 per cent believe in capability of scientists while only 51 per cent trust government leaders. Again, the least trusted set of leaders in the society.
90 per cent of the respondents believe that CEOs should take the lead on change rather than wait for government to impose it; while 82 per cent said it is important that their CEOs speak out on critical issues including ethical use of technology, automation’s impact on jobs, training for jobs of the future, diversity, income inequality, climate change and immigration.”
On the future of work and imminent threats to their livelihoods, Nigerians expressed an overwhelming level of worry about losing their jobs because of the looming economic recession and a lack of enough skills or training with 90 per cent, and 91 per cent respectively. Furthermore, 84%, 83 %, and 78% are fearful of the threats posed by cheaper foreign competitors, jobs moving to other countries, and immigrants who work for less respectively.
Concerning trust in media sources, Traditional media at 66% is the least trusted by Nigerians. Privately owned media channels remain the most trusted at 90 per cent, followed by Search engines at 83 per cent, with social media sources coming third with 75 per cent. On the quality of information, 30 per cent believe that the media they use is contaminated with untrustworthy information, while 57 per cent worry about fake news being used as a weapon.
On the interplay between competence and ethics, the theme for this year’s edition, none of the four institutions of society was considered as both competent and ethical by Nigerians. However, the Ethical drivers of Integrity, Dependability and Purpose, together with combined 76 per cent were believed to be three times more important to the earning of people’s trust than mere competence at 24 per cent.
The COVID-19 pandemic, the report further showed, increased trust levels in the four institutions, with government (63%) emerging as the most trusted. Business (62%), NGOs (62) and media (46%) followed in that order.
Rittenberry however noted that the increased levels of trust will revert to the pre-COVID era once the virus is tamed. “In times of crises, when trust increases, it’s a bubble. It falls back to pre-crises levels after,” he said, adding that the pandemic will lead to changes globally.
“As horrible as it is, this pandemic will lead to valuable innovations and changes for the better in how we live, work and treat each other as people. Recovery will not be immediate, but how businesses respond now will have an impact for years to come,” Rittenbery noted.