Lagos — The importance of Nigeria to the major IT players came to the fore recently when Intel Chairman, Mr. Craig Barrett visited the country. With earnings of over $35bn, Intel a global semi conductor leader is digging into the Nigerian market by way of being a major beneficiary when the IT market explodes.

And that is already happening, according to Barrett. He spared some time to speak to Vanguard's Asst Editor, Communications, Okoh Aihe. The stuff will make a fascinating read.

Monday, Bruce spoke to us with quite some excitement and he left most of the major news for you to break. I like to find out from you, what is the major excitement about Nigeria and Africa at this particular point in time?

Well there is excitement about the emerging economies within the entire IT sector. I just came from the Connect Africa Summit in Rwanda. They were planning on having about 500 people attend that conference, over a thousand people showed up.

I think the importance is that there are over a billion people on the internet Tuesday, the industry is looking at where the next billion will come from. It is pretty clear that they will come not from the US or Western Europe, they will come from the emerging market. Nigeria, the largest country in Africa is very important part of that next wave of internet usage.

If you look at the internet and PC penetration, it's very low. All this is going to go up. If you have been watching the cell phone penetration in the last few years, it has been growing exponentially. I suspect the internet usage will grow that way.

I look at your schedule it is quite tight. What are some of the major news you are going to be breaking to us?

We are celebrating the Proof of Concept of the Telemedicine demonstration, some of the things we have done in other countries but basically taking the capability and expertise of the Abuja Hospital, transferring that to the rural setting for remote type access.

We are visiting the school, looking at the enlargement of some of our one on one computing operations, to train 150, 000 more teachers here in Nigeria, donating several thousand Classmate PCs, to enlarge the health programme; the result has been so positive.

We think it's really worth paying substantial attention. What kind of interest do you have in Nigeria, commercial or humanitarian?

It's a combination of interest. I mean if you watch the health programme that we have which is to demonstrate the usage of ICT for education, healthcare, economic development and transparency in governance.

It's essentially a CSR - Corporate Social Responsibility issue but with the social aspect being resolved business grows. It is not a totally social or commercial interest; it is always a combination of issues. The biggest CSR focus we have is to the education sector where we have nearly five million teachers trained around the world and a commitment to train another nine million over the next seven years.

We have shareholders and our shareholders don't like us to go and spend the corporation's money just on philanthropic activities if there is essentially no tie back to the basic business. So the initiative is to create a very good balance between the two, the balance between doing good and being successful. We try to always hit those two together.

A few weeks ago here there was quite some suspicion that Intel was coming into Nigeria to take the market from the channel partners with this kind of project you are launching in Abuja. I don't know how you feel about that?

Yeah, the channel partners we have around the world and here in Nigeria constitute roughly about a third of our total business. And there is absolutely no better case to ask to take business away from our channel partners that constitute part of our proven business model. Nigeria is little bit unique in the sense that our channel partners here constitute a certain lower percentage of our total business than they do in most emerging market.

Usually it's about 60-70 per cent channel, 30 per cent multinational. In Nigeria, it's a little bit the other way. But the channel partner is very strategic to our business here. Take them all together, they are the biggest market share of any supplier, it doesn't behoove us to take business away from them.

Now let me fill you into the picture. There are some local PC manufacturers who feel that you didn't take them into consideration in doing this kind of business.

The fact is that around the world we have somewhere like 180, 000 channel partners. It is such an integral part of our business model. If we were to sideline them in any way it will be foolish on our part.

They constitute over 30 per cent of our total business. It's important to us that we don't do anything to hurt them but that doesn't mean that if some individuals have any problem they try to blame that problem on anybody, the government, Intel, whoever, the bank. Out of all, our channel partners are so important to us we try to make them successful. They are our representatives at the local level.

I can see you focus a lot on education, connectivity and you are even doing local content. I see some Nigerian content on the Classmate PC but I wouldn't know the amount of cooperation you enjoyed with the Nigerian people in doing that?

There are four basic inputs into the system. To get the design up, you have to have the access to inexpensive hardware; you have to have connectivity, you have to have content, you have to have education. We are actually involved in all four areas because we have the passion. We work with local OEMs to provide this affordably with the lowest entry level of PC like the Classmate PC which we are putting in schools at a cost of $200 for students

We are very good supporters of connectivity and connectivity in all of Africa is very expensive. Connectivity cost in Africa typically makes the cost of the hardware almost a second or third key issue. I think the World Bank's last report on broadband connectivity 256kb in Africa is about $250 a month which is about the cost of a PC now.

The spread of WiMAX will help in this respect. We are customizing content for local use as the Nigerian test case can demonstrate. In education, we are training teachers. So, we are active in all four areas not just here in Nigeria but around Africa - Egypt, Morocco, South Africa, Nigeria.

You are just getting to do business in Nigeria. With a population of about 140mmillion people it is quite heavy. What would you say is your impact on the country in the next few years in terms of benefit to the people and business growth on your side?

If you look at the internet usage here it is quite low, but you go step by step. In India, China, South East Asia, Eastern Europe, there was telephone explosion. You are experiencing that in Nigeria today which is the next strength of growth in telephone usage and ownership. That is why we are agreed on the internet penetration.

You can be sure that coming shortly behind the mobile telephone penetration will be information or internet expansion. This is what happened in these other places. We anticipate the present level of internet penetration which is about two per cent to grow dramatically.

If that goes up dramatically, two things happen: the whole IP business, the level goes up, we should benefit from that; but in time I would presume that would drive education, economic development, healthcare, all these good things, so the country benefits. So it is a win-win deal for the IT sector, not just Intel, but Microsoft, Dell, Hewlett Packard and Cisco.

When all these people participate the country is much the better by having that infrastructure which makes the country more competitive. Where we will be in five years I don't know but we should be doing a lot more business in Nigeria in five years than we are doing today. The IP sector will grow.

The amount of growth I can't tell you exactly. But the pattern of growth is much the same in all parts of the world. The telephone penetration grows dramatically and the internet follows. But you have to be on ground first.

I was in with CISCO early in the year and the CISCO boss was quite enthusiastic about the emerging markets. And you are doing the same. How can you be so hopeful about an environment that is known in the main for instability?

If you are talking about John Chambers, I will tell you that John and I are equally optimistic because what we do is that we never look at tomorrow or just at one country but we look at the totality of the emerging market.

When you subtract Western Europe, U.S., Japan, you still have over 5billion people in the emerging market. On an average those emerging markets will prosecute most of the growth for our companies over the next ten years. So we have to be optimistic because that is where the customers are going to come from. And it's not as if we have no experience.

We have watched what is happening in India, we have watched what is happening in China, Eastern Europe, Russia, Brazil, and we know that Nigeria, Egypt are not far behind. The telephone growth in these markets has gone bananas.

For instance in China, there are about 5 billion cell phones, the biggest cell penetration in the world in terms of absolute numbers. Africa as a whole has 28 per cent penetration. You know that pretty well. Yeah, we are very optimistic because we have watched what happened in the past ten years and we can pretty much know what is going to happen in the next ten years.