2.3GHz Spectrum: Why we are yet to roll out, by Omoniyi

Biodun Omoniyi is the Managing Director and Chief Executive Officer, VDT Communications, and also a lead Director in Bitflux Communications, a consortium that beats Globacom to the 2.3GHz spectrum in February 2014 after offering $23.25 million. But after about 22 months of winning the license, the firm is yet to take-off. Omoniyi, in this interview with journalists, including ADEYEMI ADEPETUN, spoke on the challenges limiting Bitflux commercial service roll out, MTN’s $3.4 billion fine and other germane industry issues.

HOW has the abysmally low broadband penetration in the country affected your business?

What the low penetration level means to me is that we have opportunity to serve and connect more people, since a lot of people are yet to be connected, based on the low level penetration of broadband across the country. It also means Nigeria needs more investments and attract more investors to the country’s telecommunications sector to scale up penetration.
15 years of doing business in an economy like Nigeria, how will you describe the experience so far?
For me, the greatest challenge has been my greatest opportunity because I see challenges as opportunities for business deveopment. Once I overcome a particular challenge, I feel happy to move on in business, and that has helped me in sustaining the business in the past 15 years. In terms of achievement, I will say that my greatest achievement is about the 2.3GHz spectrum licence, which Bitflux won in February 19, 2014, that was keenly contested. Bitflux is a consortium comprising VDT Communications Ltd, Bitcom Systems Ltd and Superflux International Ltd.

When that opportunity came, we never thought we would win the bid because it was also contested by big operators in the industry, but we were surprised when we were announced the winner, and for me, that is by greatest achievement, because the spectrum will give us huge opportunity to offer better, the kind of broadband services that we offer to customers and to even do more.

22 months after beating Globacom to the 2.3 GHz spectrum license, nothing seems to have emanated from Bitflux to show the firm’s seriousness about the business. What is the challenge?

Lot of things are going on for the commercial rollout plan of the 2.3GHz spectrum that we won in February last year. Yes we have won the spectrum, but we need to raise enough capital for the commercial rollout. It is one thing to win the spectrum and another thing to have an enabling environment in terms of the economy, business climate and government support. We have several plans but we are faced with some challenges of raising the actual investment capital for commercial rollout. However, we are working at the background to ensure that we begin to provide services, using the 2.3GHz spectrum, and we have activated some of our locations where our retail services are currently being offered. We just completed the pilot rollout and we will soon go commercial for the retail services.

Bitflux is a wholesale company that builds infrastructure around the 2.3GHz spectrum frequency. VDT, being a retailer, goes out to sell the services to end-users. Apart from VDT, other small retail companies are also selling the service to end-users.

So when is the commercial rollout plan of the 2.3GHz spectrum?

The full commercial rollout plan will come, but not in the immediate. What we are doing now is the rollout of our retail services, using the 2.3GHz spectrum band. We have started with our retail service on the 2.3 GHz and we have completed the pilot rollout on that, using VDT Communications. We will be doing just that gradually, until we cover substantive part of Lagos and other states, before we will announce the full commercial rollout plan.
As a member of the recently coordinated Telecoms Advisory Council, the highest body for telecommunications activities in the country. How does the committee intends to use the platform to better the lots of Nigerians?

The appointment and inauguration of people into the Telecoms Advisory Council, is a welcome development, because it will help in driving development in the country. It will also help to address the challenges in the industry, and ensure good service quality delivery on the part of the operators. I feel highly elated to be appointed into the council.

One of the roles of the Telecoms Advisory Council is to address issues in the telecoms sector. What is the position of the council concerning the N1.04 trillion fine imposed on MTN by the telecoms regulator that was later reduced by 25 per cent to N780 billion?

The issue of the fine, which I gathered, was a result of the inability of MTN to deactivate as much as 5.2 million unregistered and improperly registered SIM cards on its network, despite repeated warning from the regulator, but the council has not met to discuss this issue. However, in my own opinion, I think it is rather unfortunate that MTN could keep as much as 5.2 million defective SIM cards on its network, when the company knew that each defaulting SIM card attracts as much as N200,000. As unfortunate as the issue is, I am aware that the situation surrounding the fine is about breaching an existing rule, but the regulator must ensure that the operators operate in a better business environment that will help them adhere to existing rules. The regulator should be able to consult with the operators from time to time, so that there would be a common understanding between the regulator and the telecoms operators. The truth is that the regulator has not been doing what it is supposed to be doing, to make the industry a better place for both the operators and the subscribers.

VDT has been providing Information Technology (IT) services for some time now. What are these services and how has the company been able to manage them?

VDT has been in existence for about 15 years, providing broadband services to enterprises, across 36 states of the federation and we have offices in 28 state capitals in Nigeria, and we were able to achieve these in standardised ways.

Our services include connectivity to organisations that have more than one branch office and we are able to connect the branches to a central location. Banks for example, have various branches and they need to be connected for easy customer service delivery and we provide the connectivity. We do that, not only for banks, but also for organisations across other sectors, as well as logistics companies. Tracking of parcels within the system of a logistics company like the courier company, is made possible by the connectivity services we provide for them. With the advent of internet, people use it for research and social networking and for online transactions, and we provide the broadband services that sustain online activities and the lifestyles of people. This compelled us into providing retail services to our customers, which we recently started. I think the retail service will make us more proactive and popular than we were before. The retail services are currently being offered on the Lagos Island, with plans to extend to other parts of Lagos by early next year, and by the end of the first quarter of 2016, we will be able to cover the entire Lagos, and spread to other states of the country.