Nigeria’s Fastest Growing Telecommunications Company
Two decades ago, Nigeria, Africa’s largest economy, had fewer than 300,000 telephone lines. With Nigeria’s return to democracy in 1999, a full liberalization of the telecommunications industry was implemented. And, with its subsequent deregulation in 2001, the telecommunications industry flourished and now tracks as one of the fastest growing sectors in Sub Saharan Africa. Nigeria’s 155 million active subscribers surpass South Africa’s as the continent’s largest mobile Telecoms market. “Nigeria is the 8th biggest mobile market globally, representing a significant market in global terms,” states Kamar Abass, CEO of ntel. “The fastest growing global markets average a 9% compounded annual growth rate. Nigeria averages 6 to 7% compounded annual growth, so we are positioned amongst the fastest in the world. However, with only a third of Nigeria’s Internet users on broadband connections, the major opportunity in Nigeria is in the development, growth and support of broadband Internet Access to the burgeoning mobile market. We have 100 million Internet Active mobile customers in Nigeria: Fully two-thirds use narrow band technology and want to move to faster connections.” Abass, who has more than 25 years in the telecoms business, has held senior roles in major global operators, including British Telecom, Vodafone, Ericsson and PricewaterhouseCoopers. This background has given him an excellent commercial, operational and technical grounding in telecoms, as well as an excellent base of skills from which to draw in shaping and driving ntel forward. NatCom Development & Investment Ltd (NatCom) the consortium group headed by Dr. Olatunde Ayeni, Vice Chair of ntel, (CON, FIOD, DSC (HC) LLMP), was the successful bidder in the guided liquidation of the telecom assets of Nigerian Telecommunications Plc (NiTel) and Nigerian Mobile Telecommunications Limited (MTel), a process overseen by the Bureau of Public Enterprises (BPE) and the National Council on Privatisation (NCP) NiTel/MTel went out of business in 2008, when its considerable debt burden proved unsustainable. In May 2015, ntel took possession of NiTel/MTel’s assets and proceeded to build a wholly new mobile broadband operator, acquiring new technology infrastructure and repurposing various assets, particularly intellectual property assets such as spectrum and licences. The newly formed company’s mission is to provide superior mobile data services at an affordable price, to all Nigerians, as a pure-play mobile broadband operator using the most advanced form of 4G technology, known as 4G LTE-Advanced. Abass states that there are two premier economic advantages that distinguish ntel from other Nigerian providers. “The first advantage that ntel has is that we are unique in having access to premier 4G/LTE spectrum, which means we can build networks with somewhere between a third and a quarter of the cost of competitors,” Abass says. “The second is, we are pure-play. We have no 2G or 3G networks to worry about, unlike the competition, who worry about cannibalizing their 2G and 3G customer bases. We offer unlimited data packages, which are virtually unheard of in our industry. We are also launching an ntel TV product, which will give customers access to live television over a mobile interface viewable on their smart phones. These are developments that are transformative for consumers and have hitherto been unavailable in Nigeria. According to Ookla, the company that makes Speedtest, The Global Leader in Internet Performance Testing, ntel is reported to be the fastest internet service in Nigeria, a reputation and mission that we are working very hard to maintain.” ntel also owns a share of SAT-3/WASC/ SAFE or South Atlantic 3/West Africa Submarine Cable system technology, an international submarine cable which runs from Lagos, heads south and east along the coast of South West Africa, into South Africa, up through the Indian Ocean to Malaysia, and into India as well. Going West, it is the longest cable system in Africa, running along the West African coast to the North Atlantic and over to Sesimbra in Portugal. Access to SAT-3 system transmission capacity allows ntel to access internet points in Western Europe, such as London, (where ntel gets their IP injection) and Frankfurt. Currently, ntel has a 30 Gigabit per second capacity connection. Over time, SAT-3 will be able to deliver as many as 60, 70, 80 Gigabits per second to meet ntel’s customer needs. The fact that ntel is both a mobile broadband player, as well as a broadband operator is important, Abass says. “For consumers, access to internet at high speed is imperative. The demand is for high-definition voice and traditional messaging. We have a wide scope of new products that are coming to market, including subscription video on demand, gaming products, which allow consumers to play games locally and globally, music prod- ucts where people can buy access to music over the web, as well as providing access to consumers to post and track their complete history on- line through Cloud services. Our ongoing strategic goal is to create, nurture and grow loyalty with and to our customers by expediting new products and competencies first, doing things better, and more completely and efficiently than anyone else. Our mission statement is to position ntel as the Number One Go-To operator for broadband communications in Nigeria.” By 2020, the current 155 million active mobile subscriber base is forecast to soar to 220 million, a massive 42% growth factor in four years. Two noteworthy influences account for this growth: namely, the way in which age groups within Nigeria’s population are developing, and the rising affluence reflected within the growing middle class. “The middle class is growing in Nigeria and the cost of smart phones, the essential mobile tool, is becoming more affordable,” says Abass. “Between 2015 and 2020, there will be an additional 15 million economically active Nigerians in the workforce. These 15 million additional consumers will be technologically savvy from the beginning of their economic activity, and they will all be advancing the demand for mobile broadband services. Also, there is not much in the way of fixed service available in Nigeria, with only an approximate 200,000 fixed telephone lines. As such, everyone who wants communications wants mobile, and everyone who wants mobile needs to have broadband access to the internet.” Another factor that is set to reap far-reaching benefits for Nigeria relative to the growth of the telecom industry is the decreasing reliance on the country’s oil industry, which has been the country’s mainstay for decades. “Currently, telecoms are estimated to contribute about 10 percent of Gross Domestic Product (GDP), but if the telecoms businesses were to shut down, the loss would be much greater because people would have to communicate in less efficient ways,” Abass states. “As such, the impact on the economy is probably closer to 30 percent in terms of the way the industry drives productivity and efficiency. And with 4G/LTE, the very pinnacle of productivity and efficiency is realized from ntel connectivity.” To expedite economic growth for small and large businesses ntel offers mobile broad band, a productivity tool which allows customers to facilitate and execute transactions in an advantageous and affordable manner. “We believe that close to half of our customer base is small and medium enterprises,” Abass says. “In addition to mobile services to consumers, we also sell both fixed and mobile services to our relatively large base of small businesses: many of ntel’s business customers previously had expensive, low-bandwidth fibre connections (sub 20Mbps) that we have replaced with 4G/LTE mobile connections at a fraction of the cost. Our customers are very happy with the cost-efficiency of our mobile services.” The impact of Foreign Direct Investment (FDI) to Nigeria’s telecom sector is enormous, and is, in fact, essential to the industry’s evolution. When assessing technological investment opportunities in Nigeria, it is important for investors to look at a company’s mission, vision and long-term sustainability. ntel’s spectrum advantage, its early lead in 4G/ LTE technology and the shift of consumers towards broadband are key competencies that have increased ntel’s profile and sustainability in the telecom sector. For Abass, ntel’s vision to be the best broadband operator in Nigeria, with a clear mission to give customers excellent service and connectivity, while at the same time delivering strong financial results to shareholders, exemplifies the company’s drive and resolution to continue to be Nigeria’s most successful telecommunications company on the information highway. “It is really important that we are sustainable, both in terms of what we provide to our customers, as well as the loyalty we create. Our mission is three-fold: to provide the most complete and extensive coverage for our customers, using the best and most advanced broadband technology in Nigeria, which ultimately delivers the best customer experience,” Abass says.