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Nigeria: Ihs Seeks Review of Telecoms Business Models
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This Day (Lagos)
7 May 2008
Posted to the web 8 May 2008
Efem Nkanga
Lagos
Alhaji Bashir el-Rufai, Chairman of IHS, telecoms infrastructure providers has called for a review of business models in the nation's telecoms sector.
El Rufai who made this call at a press conference in Lagos reiterated that telecommunications operators in the country needed to adopt collocation as the best option for quicker network rollout, reducing both operating and capital costs.
The recent issues of poor quality service in the nation's telecoms sector has led to calls for collocation and infrastructure sharing in the industry as a way of cutting cost. El Rufai, who lamented that there were enough challenges in the market for both the operators and associated companies like IHS, said the issue of co-location is a big issue bearing unnecessary cost and needs to give way.
He said telecom operators needed to review their business strategies if they must improve Quality of service and regain dipping revenue.
The IHS chairman who stated that the prices of support infrastructure characterized by Land acquisition, importation, intervention, time, custom duties, diesel, security, tower challenges etc is very high emphasized that 60 percent of the cost incurred by operators goes to providing support infrastructure.
Decrying these models as unattractive ways of doing business, el Rufai stressed that they cause margins to go down and co-locating is the way to reduce cost. He emphasised that telecommunications operators must change their business models if they must focus on their core business, reduce network launch time, acquisition complications and comply better with the Nigerian Communications Commission NCC.
According to him, anti-competitive practices and lack of trust are the major cause of unnecessary cost and poor quality of service the country is experiencing.
In his view the operators should maximally concentrate in providing top of the rank quality of service than be bogged by the provision of telecom infrastructure-a task not only outside their areas of core competence, but making them a jack of all trade.
According to him, IHS is able to help them reduce these margins by taking off them all the hurdles they have to cross to provide that infrastructure.
"If they give over such services to IHS, el-Rufai said the quality of service they provide would be greatly improved while at the same time they would have succeeded in reducing their OPEX and CAPEX considerably.
The company which has seven board members and a consortium of banks to its side, said it has set out to building more than 1000 towers for co-location across the country to invariably take away about $5000 monthly maintenance cost per tower from the operating companies.
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IHS, which began business with annual turnover of N300 million in 2001, has pushed its growth level to about N7.5 billion in 2007.
The company, which is involved in infrastructure building, management and lease currently provides services for MTN, Motorola, Celtel, MTEL, NITEL, Intercellular, Nokia Siemens Alcatel, and Huawei. It is currently involved in the network rollout efforts of Etisalat, the fifth GSM operator.
The company, which began operation with staff strength of 30 in 2001, has increased its staff strength to over 250 with over 150 subcontractors. Licensed by the NCC with and ISO 9001 2000 certified, HIS has offices and operations across the geopolitical zones of the country.
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