‘Nigeria’s telecoms sector needs fresh investments’
Kamar Abass is the Chief Executive Officer, nTel, Nigeria’s 4G/LTE advanced network provider. He holds a Bachelor’s degree in Civil Engineering from the University of Lagos, Nigeria; a Masters in Transportation Planning & Management from the University of Westminster, London, U.K. and an M.B.A. from Cranfield University’s School of Management, Bedfordshire, U.K. He has 24 years’ experience in the global telecommunications industry, and prior to joining nTel, Abass was the Country Manager for Ericsson Nigeria, and a member of Ericsson’s leadership team for sub-Saharan Africa, a role he held between 2012 and 2015. Abass joined Ericsson’s Western European division, in 2008, as Vice President, Marketing & Business Development for one of Ericsson’s largest global customer accounts.
Abass had also held various senior positions in telecommunications and consulting including Vodafone Group Plc., PricewaterhouseCoopers, and British Telecom Plc. In these organisations, he performed roles in sales/business development, commercial management and general management.On April 8, 2016, Abass, launched Nigeria’s first 4G/LTE Advanced network providing superfast internet access that enables voice, data video and TV on demand. The ntel network is built on the 900/1800 Mhz, the best propagation frequencies for the deployment of 4G LTE technology. nTel actually transformed from NITEL after the liquidation process. It is already two years since that acquisition by NATCOM Consortium of NITEL, and one year of nTel’s operations in Nigeria.Abass, in this interview with Business Editor, CLARA NWACHUKWU, and ADEYEMI ADEPETUN, spoke on the transformation the telecommunications firm has brought into the industry in the last one year and the challenges confronting network services in Nigeria.
It’s been two years since you acquired NITEL and Mtel, and one year that you rolled out, have you revolutionlised the sector as promised?
You are actually right. It was the end of May 2015 that we took possession of the assets of NITEL and Mtel. Before that however, it was two years, may be a little longer than that since the discussions with shareholders, who are now the board of directors of Mtel began to investigate and doing research and strategising for the business, which has become the business we are in today. So, even though it looks like two years, in fact, we are in the second part of gestation of this business.
My sense of us transforming the industry is first, in the area of data – how much is being consumed by subscribers. We had a hunch that the amount of data been consumed on 3G networks and even on early 4G networks was constrained. They were constrained largely because of the throughput committed by the way in which the technology was deployed. So, we deliberately set out to build the highest speed network that is possible without spectrum and with technology at its stake. That is why our network is called the 4G LTE Advanced network and the advance is about a couple of technologies that we added on to 4G, which put us on the road to 5G, which give us enormous advantage to make higher level of throughput. Typically, the throughput on our network gives us the 250mbps. Easily, many times what’s possible on 3G and certainly multiple of what is possible on the 4G networks in Nigeria today. Now, that revolution in the amount of throughput comes from the amount of speed that is possible, and of course it comes from the amount of pricing, and we offer unlimited packages that have allowed customers to really stretch their legs in relation to the opportunities for productivity from a mobile service.
Another thing I will mention is that when we launched our business commercially in 2016, we launched into a market at that time that if you ignored our base stations (BTS), they were around 600 to 700 4G Base stations in Nigeria, many 3G and advanced number of 2G. But on 4G, there are fewer than 1000 BTS at that time, but today, just over a year later, there are no fewer than 6000 BTS for 4G. That shows the level of transformation that has been occasioned by one thing only, which was our entry into the market, and the impact we’ve had on consumers awareness of 4G through the experience of the speed and the need for people to protect their own 3G customer bases. Very strongly, we are in the process of creating a fundamental transformation, and it’s only just begun.
IF you have had this much impact in the market, what then is your market share?
I don’t want to talk too much about our own market share because, first, we have shareholders and they should be the first beneficiary of our report on operational and financial. But what I can say to you is that there are today, nine 4G players and certainly all of them play in one or more principally three states. Customers have an enormous choice of where to go. We also see that forecasters are looking at the Nigerian market and they expect broadband as compared to narrowband, which means 3G and 4G compared to 2G, will become the dominant technology for broadband, and for mobile by the end of next year. By 2018, there will be more 3G and 4G customers than 2G. This means that the whole market is transformed and even though there are a large number of players, there would be more than potentially 100 million 3G and 4G customers by the end of 2020. That would be the break point where 3G and 4G exceed 2G and that creates for the nine players, a huge market, and I see each player having over 10 million 4G customers by then.
While Nigeria struggles to meet up with 4G, at the Mobile World Congress in Barcelona recently, the buzz was 5G, and even beyond that. Why do we always play catch-up?
I think we have made enormous stride as a nation with respect to telecommunications. There are a total of more than 150 million mobile subscriptions, making us the seventh largest telecoms market globally. Even on broadband mobile, we have 50 million subscribers on that, and as I said, we have some millions of subscribers on 4G, but that is mostly about handset, and of course what we see then is an opportunity to give more customers 4G services.
There is the need to understand that 4G is what is called LTE, here at nTel, we have something called carrier aggregation and multiple in, multiple out antenna technology; these and many others are evolution that will take us to 5G. My sense is that in Nigeria, within the next 24 months, people will be acquiring capabilities on top of 4G, which will get them to 5G. The nature of 5G is rather difficult in terms of how it is applied; 5G is for a world of high demand in densely packed locations. What that means is that it is not just people who will take 5G connections, it will be connected things such as cars, buildings, facilities and infrastructure among others and that requires a much wider involvement than just us. Of course, the telecom operators will have network to provide the services, but it will now become an ecosystem of players and service providers that will take advantage of a high capacity dense network. The fact is nTel will build the network and work with high ecosystem that really requires 5G. We are already giving the people the best of services, on our network, people can get lost, and there are testimonies everywhere.
How much investment has nTel made in this regard since you came on board?
Let me just say it is significant. Everyone knows how much we had to pay for the asset from NITEL and Mtel. Frankly, that has been only a fraction of how much we have committed into this business. Virtually, all the equipment that we have deployed for 4G are new. Those things we inherited from NITEL were majorly on 2G.
Recently, I was talking to the liquidator and he said: “You have launched 4G service,” and I said, yes. And he said: “But I didn’t sell to you any 4G equipment.” I said, exactly sir, we had to buy the 4G equipment to become more competitive. Yes, we bought licences, spectrum, it is even true that we bought some old exchanges, right of way, and even SAT 3. But we have invested more on them to bring them to par with what is currently obtainable in the globe.
What then did you do with the NITEL infrastructure, the 2G and others? I am asking this because the Land Line is fast going into extinction?
Of course, nothing was on ground when we bought NITEL. The cables have been destroyed, exchanges were not working, the BTS, among others…
But in places like the U.S., the landlines are still working perfectly alongside the mobile, so what happened to ours?
The landlines in Nigeria are not of use. For the 100 years since Alexander Granham Bell invested the telephone, the U.S. has maintained it. Fibre has replaced copper; copper has been enhanced in places to drive digital subscriber line (DSL), and they have invested more in that line. They have kept it going for over 120 years.
When NITEL stopped trading, it had around 400,000 lines, but when MTN came in and over a period of time, about a year, they had over a million customers. So, it would be difficult for its restoration in this part of the world. Indeed, for 4G, there are some things you can do on the wireless, which replaces so many things on the fixed lines. Economically, we had to think very hard about what is the specific use of this in our world. With 4G broadband, it is hard to think of a use case at a lower end of fixed line.
The National Bureu of Statistics recently placed nTel above others in VoIP, what is responsible for this?
I don’t know much about what our competitors are doing; I would rather not comment on them. But what we have done at nTel is that we have delivered a high quality service. We have focused on wide coverage, which are Lagos, Abuja, and Rivers, even in the hinterland of these cities. We have equally deployed a high level of technology on voice and data, which continues. We try as much as possible to ensure that our customers get the best value for their money.We deliberately manage our network to ensure that we can support some very key use cases. These include good access to the web and reliable voice services.
But, why did nTel restrict its services to Lagos, Abuja and Rivers states?
We are not restricting our services to those areas, they are our starting point. This is to ensure that we can measure investment very well, work to get maximum returns and plough back and spread to others cities.
So, how soon do you plan to spread to other cities?
As soon as Q4 this year, we are already in another level of funding. We are working very hard to ensure that by Q4, we spread to other cities in the country.
Recently, nTel and some others met with the Nigerian Communications Commission (NCC) to complain about high operational expenditure and liquidity in the market, what is actually the situation of things?
The discussion with the NCC was about the price range for data services. The Price Floor was posted by the NCC last year, but it was later withdrawn. We believe that it was mistake to have withdrawn it because having no price floor has led to a situation prices have become far lower than we would have liked them to be. And frankly, that may be dangerous for the sector. Indeed, we were part of the group that started that discussion and met with NCC. The reality is that the market is a very competitive one, and the customers are getting big value, so the structure needs to be balanced, so that we don’t create a situation where there won’t be more investments for the sector.
Will it be right to say the removal of the Price Floor is responsible for the “sabotage” among operators in terms of connectivity?
The fact remains that we are interconnected; I don’t recognise any sabotage or acrimony among operators, because we are all competing together, so it is left for the customers to choose what they want. We are interconnected to all the operators. Sometimes, there could be technical issues because networks are rarely stable on their own accord. I don’t see any acrimony. But the issue is the level at which prices have descended and the views held by some operators that those prices are too low in relation to what is required to earn a return. Our customers use a far greater volume of data than other operators, probably because ours is faster and more reliable than competition.