analysisBy Chima Akwaja
As the year 2012 winds to a close, a cursory look at the Nigerian Information and Communications Technology (ICT) industry shows that it recorded crucial milestones such as surpassing 100 million telephone subscription, increased investments inflows and aggressive infrastructure deployment by phone operators as well as federal government's recognition of the role of software in growing the economy and public-private partnership to provide students with computers in schools.
It is expected that 2012 would surpass the 5.6 per cent contribution to the Gross Domestic product (GDP) the ICT industry contributed in 2011. This industry has before 2012 grown at an average of 30 per cent a year making it one of the fastest growing sectors in the Nigerian economy. Much of this growth was contributed by the telecoms sector.
2012 began with the release by the Ministry of Communications Technology (ComTech Ministry) of the Draft National ICT Policy designed to create a converged regulator for the telecommunications and broadcasting industry, making it easy to release spectrum for broadband revolution and harmonise regulations of the entire industry.
Telecoms sector growing despite challenges
In 2012, Nigeria achieved a milestone in Africa, being the first country to record over 100 million mobile phone subscriptions. The latest figure from the Nigerian Communications Commission (NCC) has it that Nigeria has 107 million mobile lines and it is expected to reach 110 million phone lines by the end of December 2012. In terms of quality of services, subscribers witnessed little improvements on the networks.
This led the regulator in April 2012 to impose various fines totaling N1.8 billion on the Global System for Mobile Communications (GSM) operators namely MTN, Glo, Airtel and Etisalat for the provision of poor services. In addition, telecom services were worsened by terrorist attacks on some facilities of the GSM operators in the North Eastern Nigeria in the third quarter of the year as well as flood disasters emanating from the overflow of River Niger affecting telecom services in 18 states and knocking down about 750 base transceiver stations (BTS).
While these were happening, the NCC banned all promotions and lotteries by mobile operators in order to prevent anti-competitive practices and arrest worsening quality of service on the network. The operators on the other hand, were relentless in improving their services with various investments on their network. Airtel, MTN and Etisalat swopped old BTS and generators for Internet protocol (IP) network and hybrid generators.
MTN invested $.13 billion on its Nigerian network for 2012 achieving 45m subscribers; Aitel raised its Nigerian investment to $700 million attracting 20 million subscribers; Glo reached 22m subscribers while Etisalat continued connecting 14 million subscribers as at October 2012. One of the Code Division Multiple Access (CDMA) mobile operators, ZOOMmobile, shut down amidst a N27 billion debt while Starcomms, MTS and Multi-Links began discussions to merge into Capcom, using their accumulated 20 MHz spectrum to provide Long Term Evolution (LTE) services.
Government increased broadband penetration from six per cent to 20 per cent by 2015 for NCC and the operators
In September, President Goodluck Jonathan inaugurated a Presidential Committee on Broadband to come up with a roadmap for enthronement of a digital economy using broadband infrastructure, content and Nigeria's abundant human capital.
IT gets FG's attention
Currently, over 90 per cent of the software used in Nigeria are imported thereby creating enormous capital flight while Nigeria's inability to effectively explore the software market is due to various challenges ranging from high cost of access to ICT, infrastructure capacity development, legislation lacuna, preference for foreign software over local ones, inadequate human capacity development, inadequate funding of ICT programmes, inadequate awareness on the part of policy makers, among others.
With this background, the federal government came up with a plan to establish a $15 million Software Innovation Fund to fast-track the development of made-in-Nigeria software by the youths. Government will contribute $3m of the seed capital. Mrs. Omobola Johnson, Minister of Communications Technology said it would be public-private partnership aimed at kick starting the creation of software cluster market for Nigeria. Government also in October inaugurated Tinapa Software City in Calabar as part of the project.
Also, the Ministry of Communications Technology started work on a local content policy, guidelines and legislation with implementation date of January 2013 that would see to the local production of subscriber identity module (SIMCard), BTS, debit, credit and other payment cards aimed at growing the economy and reducing foreign dependence. The ministry also signed MoU with the Abuja Technology Village and before the end of 2012; a 250-staff call centre will be set up to foster government-to-citizen (G2C) engagement. Two other pilot centres will be up and running before the end of the year or early 2013.
In the same vein, original equipment manufacturers (OEMs) popularly known as local computer manufacturers by the fourth quarter of 2012 received government attention with government's plans to partner with OEMs to provide affordable PCs to students in universities and secondary schools across the country.
The Central Bank of Nigeria began the implementation of its cashless policy to reduce the level of cash in the economy. Commercial banks rolled out over 100,000 Automated Teller Machines (ATMs) across the country in order to encourage Cash-Lite economy policy of the apex bank. CBN set a target of 375, 000 Point of Sales (PoS) terminals in different parts of the country in the next four years.
However, the system was beset with regulatory and administrative loopholes discovered in the implementation of the policy especially the pilot in Lagos. There is need for more awareness and education on how to perform cashless transactions; overcoming infrastructural challenge to make the facility widely available and reliable; greater security of the platforms; making the benefits clear to merchants and incentivising usage and a legal framework for industry standards and to combat cyber crime.