Superheating Nigeria’s economy using the fuel of fibre optic broadband
In May 2020, the Nigerian Communications Commission (NCC) revealed that Nigeria now has more than 141 million active Internet lines, up 18 million from 123 million in 2019. On the surface, this is a great achievement and it is certainly significant in a country that as recently as 2009, had only 31,041,429 internet users, making up just 20 percent of Nigeria’s population. While this is transformational performance, there is a new challenge in growing Internet penetration and access to the burgeoning local and international digital economy, and it goes beyond nominally having Internet access.
With an average download speed of 3.34 Mbps, the 2019 Global Broadband Speed Rankings report by UK analytics firm Cable, puts Nigeria at number 183 out of 221 countries measured for average Internet speed. While this might not sound overly impressive, it is important to note that for reference, the UK had an average download speed of 3.8 Mbps in 2010. In other words, without having any of the UK’S vast array of legacy telecom infrastructure to leverage, Nigeria was actually delivering speed rivalling that of what was already a fully developed knowledge economy at the time.
In fact, the main reason that Internet access in Nigeria is not even much faster than present is that it is typically provided by mobile networks offering 2G, 3G and 4G wireless connectivity. No matter how much said networks might insist to the contrary, the fact is that factors like weather, location and movement do in fact cause fluctuations in network speed and latency.
What this inevitably means is that Nigerians using 3.34 Mbps average speeds - comparatively decent that might be - are automatically at a competitive disadvantage compared to say, Austrians with 27.74 Mbps or Emiratis with 28.33 Mbps. At a time when the world is experiencing a 4th industrial revolution led by a rapidly expanding borderless digital economy, the implication of lagging behind this way is not limited to merely waiting a long time to download a 5GB movie, which is the measure Cable’s speed test used in evaluating. Lack of access to superfast Internet speed now has real economic consequences in today’s world.
Internet speed is now an economic issue
According to a 2011 report by Mckinsey, The Internet accounted for 21percent of GDP growth in mature economies between 2006 and 2011. These economies, typically located in Europe, North America and Asia primarily access The Internet through fixed fibre optic broadband connections. Japan for example, has a fixed broadband adoption rate of 31.16 connections per 100 people according to 2018 figures. In the same year, Canada had 38.57 fixed broadband connections per 100 inhabitants.
Nigeria on the other hand, had just over 112,000 fixed broadband connections in 2018, which means that the overwhelming majority of the NCC figures mentioned at the outset are relatively slower and less reliable mobile wireless connections. This has real and measurable implications on
Nigeria’s economic growth and global competitiveness.
A 2016 World Bank report titled ‘Digital Dividends: Exploring the Relationship between Broadband and Economic Growth’ concluded that a 10 percentage point increase in fixed broadband penetration would increase GDP growth by 1.21percent in developed economies and 1.38percent in developing ones. In other words, adding 15,000 fixed broadband lines would add over $6 billion to Nigeria’s $448 billion 2019 GDP.
This is a challenge that no organisation in Nigeria is tackling as directly as ipnx. Founded in 2000 to take on the daunting challenge of Nigeria’s then uncharted broadband market, ipnx has spent more than 7 years quietly building a fibre optic service that provides stellar, high speed connectivity to corporate, SME and residential customers in Lagos, Port Harcourt, Abuja, Ibadan and Kano. The company’s vision is led by Ejovi Aror, its charismatic group managing director, who describes himself as a true believer in the power of broadband to transform Nigeria’s economy.
Aror has the profile to match the talk. Appointed GMD of ipnx since 2002, he has witnessed Nigeria’s telecom sector emerge from being near-comatose to contributing 10.11percent annually to Nigeria’s GDP. In that time, ipnx has evolved in its initiatives to provide widespread broadband access, transitioning from building Nigeria’s first multi-city fixed wireless network to rolling out what can be termed the global gold standard for high speed Internet access; Nigeria’s first true FTTX (i.e fibre to anywhere, whether premises, home, curb or node) fibre optic network.
ipnx Fibre Optic Strategy’s Competitive Edge
The company’s current strategy is as simple as it is elegant - target residences and businesses within the coverage area of existing fibre optic cable infrastructure and provide a highquality last mile cabled service to them. As a result, ipnx has built the
widest FTTX subscriber base across premium residential and business areas in Lagos, with similarly successful deployments in Abuja and Port Harcourt. The central selling point of ipnx is the ipnx Fibre-optic Service (FOS), which delivers Internet and telephone services to users using 100% fibre optic cables end-to-end.
This gives ipnx the crucial advantage of high speed and low network latency, offering its users an unusually fast and high-quality networking experience. Fixed broadband providers in Nigeria often use a mix of fibre optic and wireless infrastructure for transmission and last mile services, but this has the effect of slowing down speeds and increasing latency because wireless signals are fundamentally not the most reliable. ipnx’s end-to-end FOS fibre broadband service offers users a level of speed that more than triples Nigeria’s average speeds, starting from 10 Mbps and going as high as 200 Mbps.
The company also has ambitions of branching out from the higher end of the market to offer services to the mid-level market, to ensure all Nigerians are able to benefit and become more competitive in the digital economy. One of the strong team helping to drive this is the Group Executive Director, Commercials, Bimpe Olaleye. Speaking at the recent signing ceremony of a partnership deal between ipnx and the United States Trade and Development Agency (USTDA) on September 17, 2020, Olaleye said: “ipnx appreciates the trust, confidence and support of the USTDA to facilitate the design for the expansion of our fibre network. This will see us meet our strategic intent of being the bedrock of the Nigerian ICT ecosystem by providing solutions that help mankind thrive.”
The partnership between ipnx and the USTDA includes a grant from the U.S. to support ipnx’s FTTX network infrastructure, which is intended to help the company expand its fibreoptic network to over 200,000 residences across urban Nigeria. Bringing
wider coverage and access to residents and businesses across Nigeria is in line with Nigeria’s National Digital Economy Policy, initiated by the Federal Ministry of Communications and Digital Economy.
This, according to Uche Nnakenyi, Divisional CEO, ipnx Infrastructure Services, will further enhance ipnx commitment to expanding its fibre footprint across Nigeria. Speaking at the signing ceremony, Nnakenyi said: “ipnx is a leading broadband solution provider and a major contributor to the Nigerian digital economy and we are poised to expand that space even more with this partnership with USTDA. Our commitment and dedication to the ideals of delivering the best quality broadband Internet has set us apart as a clear leader in the industry. We are truly setting new standards in the broadband space in Nigeria.”
ipnx’s leadership position in the FTTX space was explicitly mentioned as a motivating factor for being chosen as a partner by the USTDA in line with the U.S. government’s strategic goal of boosting the U.S. – Nigeria bilateral trade relationship via expansion of the digital economy. ipnx has thus gone from a hopeful startup in a completely unknown market to a U.S. government partner.
Going forward, the company has even bigger ambitions.
According to Aror, the emergence of the Covid-19 pandemic provides a bigger use case for fibre-optic broadband Internet access as educational and commercial institutions increasingly opt to go remote. 11 years ago, ipnx was redefining the broadband space by offering 400kbps metered plans to corporate and residential customers.
Now, it has unveiled Nigeria’s first 200 Mbps data service. One thing is clear - you would not bet against it doing more.