Foreign software dominant, take 77% of local market share
Danbatta seeks more indigenous participation in sector’s growth
The preference for foreign products in Nigeria may not wane anytime soon, as 77 per cent of software in use in the country were imported.
This came to the fore during a stakeholders’ meeting in Lagos with the theme: “The National Strategy for Promotion of Indigenous Contents in the Telecoms Sector,” organized by the Nigerian Communications Commission (NCC).
Presenting a paper, Professor of Entrepreneurship and e-Business and the Head of Entrepreneurship and Business Studies, Federal University of Technology, Minna, Niger state, Prof. Olalekan Busra Sakariyau, said the dominance of foreign software, only left 23 per cent market share for the locals.
With respect to hardware being used by companies surveyed, Sakariyau said 86 per cent of them are foreign, while 14 per cent come from local companies.
He said data on Base Transceiver Stations (BTS) also revealed a dominance of foreign products over those produced locally, as 88 per cent are foreign with only 12 per cent being manufactured in Nigeria.
In terms of human capital, Sakariyau said the ratio of Nigerians to foreigners (for Senior, Line, Contract and Outsourced staff) in the industry is high in absolute terms, that is 98 per cent to two per cent).
Making reference to statistics from the Association of Telecommunications Companies of Nigeria (ATCON), Sakariyau noted that the yearly outflow of foreign exchange for the telecoms sector amounted to $2.16 billion, which is broken down into CAPEX programmes, $750 million; Network Software Licensing, $250 million; Management fees, $800 million; Managed Services (Tier 2 and 3 support), $157 million and miscellaneous (International circuits, roaming and terminations reconciliations, among others), $200 million.
While stressing the need for some of these gaps to be reversed, he said indigenous content policy generally means any policy that encourages the development of indigenous skills, technology transfer, use of indigenous manpower and indigenous manufacturing.
According to him, with advancements in technology, administrations have come to recognize the need for their indigenes to participate actively in exploitation and transformation of their resources into goods and services aimed at economic growth.
While noting that local content dimensions include manufacturing, software development, compliance monitoring, licensing, funding, people and research and development for digital innovation and entrepreneurship, he pointed out that with the constitution of the National Office for Developing the Indigenous Telecoms Sector (NODITS), the industry should expect new guidelines and regulations bordering on indigenous content.
MEANWHILE, the Executive Vice Chairman and Chief Executive Officer (EVC/CEO), NCC, Prof. Umar Danbatta, has urged NODITS on the need to ensure effective delivery of its mandates with respect to the promotion of indigenous contents in the nation’s telecoms sector, adding that the office was very critical to effective mainstreaming of local content development in the nation’s burgeoning telecoms sector.
Danbatta said the development of National Policy for the Promotion of Indigenous Content in the Telecommunication Sector (NPPIC), facilitated by the Minister for Communications and Digital Economy, Prof. Isa Ali Pantami, is essentially aimed at driving the desire of the current administration and the NCC to ensure that indigenes become more active participants in Nigeria’s telecoms sector.
The EVC said, as an SPV under the purview of the Commission, NODITS would be expected to get involved in development of new guidelines and regulations bordering on indigenous content, local manufacturing of telecom equipment, outsourcing services, construction and lease of telecoms ducts, succession planning in the telecoms sector, among others.
He also urged the NODITS team to adhere to regulatory and ethical principles held in high esteem by the management of NCC. “The Commission’s commitment to maintaining high standards, ethical conduct, and superior performance is a priority of the management, hence by extension, NODITS should reflect the established values, guiding principles, strategic awareness and the goodwill associated with the NCC,” he said.
Besides, the EVC said NODITS would be involved in working with various stakeholders towards reducing capital flight, as local manufacturers would be encouraged to participate in the design and manufacturing of devices. This vision will also ensure that manpower requirements towards making indigenes active participants in Nigeria’s telecoms development are met.
“In essence, NODITS will be expected to initiate strategic programmes and projects that will stimulate the growth of the telecoms sector through an approach that is visionary, focused, sustainable and based on incentives to indigenous telecom stakeholders”, EVC added.