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September 2015

 

Broadband: Next moves on heroic broadband dare?

Funke Opeke, in her 50s, a telecoms engineer with 26 years experience, returned to the country from Verizon Communications in New York at the instance of MTN Nigeria to be its pioneer chief technical officer, a position she held for five months before leaving to be chief operations officer of the moribund NITEL.

Today, she is on her ultimate entrepreneurial savvy test to create value for her baby, MainOne’s 90 per cent idle submarine broadband fibre cable worth more than N47billion, a technology with a projected life span of 25 years, five of which has been spent. Despite this challenge, she is in a further bid to invest another $500million, N98billion, on additional techno infrastructure before 2020, in a field she has about 12.75 per cent of the total national broadband capacity with MainOne’s 7,000km cable and where her company, West Africa’s first privately owned wholesale broadband services provider, is competing with four giant multinationals that have sunk a total of $3billion, N590billion, by August 2015 exchange rate, into more than 90 per cent idle capacities for internet connectivity.

South Atlantic 3 broadband investment valued at $600million, N118billion Glo 1 at $800million, N157billion. West African Cable System costs $650million, N128billion, and African Coast to Europe, $700million, N138billion, on the technology driving new frontiers of business in the emerging global economy.


Idle asset

These companies, like MainOne, must drive last mile connectivity across Nigeria to provide internet services to the people wherever they are to use their more than 90 per cent idle capacities and make money, but they lack the outreach infrastructure. As Opeke puts it, “We need to find commercially viable frameworks that allow the investor to generate a reasonable return to make it viable, and that is not happening yet.”  This is because players have to buy the infrastructure from people who own it for their own proprietary use. “It is a cartel-like situation,” she laments.

The techno supermart

Opeke’s MainOne Cable and mother outfit, Main Street Technologies, have evolved into a techno supermart, from submarine cable operator into a full-service business-to-business communications services provider with Tier III Data Center, MDX-I, in Lagos, the first of its kind in West Africa. MainOne services seven West Africa countries, including Ghana, Ivory Coast and Cameroon, where it has improved internet access with its services by lowering wholesale prices. It has an impressive customer list of more than 500 major telecom operators and internet service providers, including SWIFT Technologies, government agencies, large enterprises and educational institutions.

The company has the region’s highest lit capacity on its submarine cable as the number one internet transit provider in West Africa, interconnected with the London Internet Exchange, Amsterdam Internet Exchange, Nigeria Internet Exchange, the Ghana Internet Exchange and lately Cameroon Internet Exchange. MainOne also has a strategic partnership agreement with Indian TATA Communications to extend its Video Connect Network into Nigeria
MainOne’s catchment market, according to its license is Lagos, covering 12 per cent of the population and some 60 per cent value of corporate Nigeria, with a population of about 17 million people.



 


funke opeke
Aside from the link up infrastructure challenge, MainOne must surmount the problems of vandalism to telecoms equipment, multiple taxation, inordinate Right of Way charges and the high cost of doing business to make good returns on its investments.

e-decisions

While watchers of the techno industry are intrigued to see how Opeke, known for her rare determination to surmount obstacles and focus on her goals, will tackle the challenge in the course of 2015, declared by the Federal Government as the year of broadband, when the National Broadband Plan of 30 per cent broadband penetration in 2018, a fivefold leap, is expected to be sealed for e-Governance; e-Health; e-Banking; e-Education; telemedicine e-Security, etc., by moving many business online to give Nigeria’s Gross Domestic Product, total value of goods and services produced, a major leap, techno experts are divided  on the best approach Opeke could use.

Chief Executive Officer of WaveTek, Ken Spann suggests national adoption of microwave radio, a wireless technology, as the cost effective and faster means to move idle capacities to areas of need because laying fibre cable is expensive and face environmental challenges. Amanwa Chukwuma, Deputy General Manager, ATB Technosoft Solutions, agrees with him, but Professor Ike Mowete, a telecoms engineer and Director, Centre for Information Technology and Systems at the University of Lagos and subscriber to MainOne services says fibre network is the ultimate backup infrastructure for broadband connectivity because microwave radio is inadequate and unreliable. 

However, Akinlabi A. Akinbo, chief executive officer of AAA Infotek wants the Nigerian Communications Commission to change its policy on the backbone infrastructure from Active Service to Active Sharing of facilities to enable faster pace of linking businesses in Nigeria to the field.

Options, no options

How Opeke who completed the MainOne Cable project in time and on budget, meeting African Development Banks stressful 340 conditions imposed on her to get $120million, N23.58billion, credit line for the venture after raising an initial equity of $120million, N23.58billion from Nigerians prevails on the requisite internet broadband infrastructure encounter for which Nigeria, according to Joseph Tegbe, partner, management consulting at KPMG needs $10 billion for the networks on an open-access, price regulated and non-discriminatory basis to meet the broadband targets of  the National Broadband Policy will determine whether or not she moves to the next phase of her ambition.

Would Opeke forge more strategic partnerships, move into the retail end of the business, spearhead a private sector infrastructure company or embark on a number or none of these game plans touted by experts to recoup her large scale investments?

The result on this will determine how she fares in her ultimate dream: “I want to get MainOne to a successful point and then retire in the Bahamas.”







 

 

       
       
       
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