In a keynote presentation at the Internet Governance Forum of TECHNOLOGY TIMES Outlook 2010 Summit held February 23-25, 2010 in Lagos, Executive Director, Mobility/New Ventures, Linkserve, Alan Tapfumaneyi share his perspectives on topical Internet market issues at the ICT Roadmap event. Excerpts:

Executive Director, Mobility/New Ventures, Linkserve, Alan Tapfumaneyi at TECHNOLOGY TIMES Outlook 2010 Summit

The Internet has come a long way from the time of the research driven, text based ARPANET and the first commercial usage of Internet using X.25, to the current multi-media Web that we are using today.  Following commercialization and introduction of privately run Internet service providers in the 1980s, and the Internet’s expansion for popular use in the 1990s, the Internet has had a drastic impact on culture and commerce. This includes the rise of near instant communication by electronic mail (e-mail), text based discussion forums, and the World Wide Web. Investor speculation in new markets provided by these innovations would also lead to the inflation and subsequent collapse of the Dot-com bubble. But despite this, the Internet continues to grow, driven by commerce, greater amounts of online information and knowledge and social networking known as Web 2.0.

In the developed countries today, data and multimedia services are the fastest growing areas in the telecommunication sector. Companies are shifting their focus from voice telephony and casting huge investments into the data connectivity. This has been accelerated by the ever increasing demand for more bandwidth and faster access speeds as e-commerce out paces high street income for the first time this last holiday season. Gaming stations platforms, home entertainment are fast becoming the headline earners in the ICT economy with more and more businesses going online. The whole printing and publishing industry is set for a total revolution since the invention of the Gutenberg printing press as major news papers have announced a total phasing out of paper based publications. The Internet has truly changed the way we live, learn and do business propelling the development of the human race far beyond what we though possible.

Since the Internet market was opened to competition a few years back, the Nigeria Communications Commission (NCC) has licensed hundreds of ISPs although not all are operational. Despite this, the bulk of the population of approximately 150 million is still underserved with only eleven million Internet users in Nigeria representing a penetration rate of about 7.4% (ITU) with most users living in the large commercial centers (UNCTAD, 2005). The country’s Internet market remains hugely under-served with  approximately 70% of the Internet subscriber base reported by the local ISPs to account for corporate subscribers while the rest are home, small office and internet café users. Nigeria’s Internet sector has been hindered by the country’s underdeveloped and unreliable fixed-line infrastructure, but this is changing as competition intensifies and new technologies are able to deliver wireless broadband access. More than 400 ISPs have been licensed as well as a number of data carriers, Internet exchange and gateway operators.

The silver lining in these statistics is a staggering 5400% increase in internet users in Nigeria from 2000 to 2009 indicating triple digit annual growth rates. These figures indicate enormous potential in the growth of the Nigerian internet market representing huge business opportunities which is only possible if the necessary push, encouragement and firm implementation of internet-based initiative is available from the necessary regulators, government and industry players most represented here in this forum.

The transformation of Nigeria’s telecommunications landscape since the licensing of three GSM networks in 2001 and a fourth one in 2002 has been nothing short of astounding. The country continues to be one of the fastest growing markets in Africa with triple-digit growth rates almost every single year since 2001. It passed Egypt and Morocco in 2004 to become the continent’s second largest mobile market after South Africa. And yet it has only reached about one quarter of its estimated ultimate market potential and as Internet, data and multimedia based technologies roll out, this prospective can only be better. However the necessary work has to be done in directing the disperse efforts to bring the next wave in telecommunication revolution to fruition.

In the immediate horizon, the deployment of the country’s first Next Generation Networks (NGN) will drive further convergence of voice, data and video/TV, enabling the provision of triple-play services that will ultimately also involve the country’s already competitive broadcasting sector. MainOne, Glo and other consortiums have started laying the foundation for this new generation for services. The stranglehold Nigeria has experienced in Internet bandwidth is soon to be over; it will usher in the necessary price correction in bandwidth cost and increase the reliability with the obvious redundancy. There are also several satellites launching in the the next 18 months which have strong regional foot print and advanced service offering able to absorb the increasing traffic demand.

The onset of the latest wireless technologies into this market is exciting as the promise of effective broadband draws near. We have seen various flavours of WiMAX , EDVO and HSPA entering the market but none of these technologies has truly delivered the services on which businesses can build a trading platform. The absence of a market leader in this space has meant no clear direction has been set to date. However this situation is not likely to continue as the next wave of service providers are poised to unleash the Next Generation wireless networks in to the market. It is with great anticipation and excitement that we must all enter this decade.

The emergent of Nigeria as a progressive and dominant economic force in the West Africa region could not have happened without the rapid development of telecommunication services such as we have seen in the past few years. As we are entering this new decade, the fundamentals of world economic dynamics are rapidly changing as income streams, business models and revenue flow becoming totally ICT dependent.

If our Nigeria is to continue to compete, progress and remain a relevant player on the world economic stage, bold and decisive steps are needed by ‘we the people’ to ensure that the foundation and platforms to participate at the highest level are in place.  ‘We the people’ not only includes the ICT players present in the conference but also supporting and dependent industry such as power, regulators, government and institutions.

This timely forum we are all participating in is the first step in identifying these challenges, stumbling blocks and barriers that hinder our concerted efforts to attain and establishing the same levels of successes in ICT that we have experienced in voice telephony. We are the ones to draw the roadmap for the development of Nigeria beyond 2010 and spearhead the next economic surge on the crest. As we strive to get our data and Internet platforms to world class, it is important that we should learn from the key ingredients that made the voice telephony a success story and explore how best we can  exploit these same factors to propel forward.

Most communication experts will agree that the 3 key factors which the GSM and CDM companies had coming into the market were one; a leverage on the appropriate wireless technology, two; access to finance and three; a conducive regulatory environment. Other factors including the power solutions and local content (local voice calls) also helped to propel this market to dizzy heights.

Wireless technologies are developing very quickly in the data arena with more and more bits of information being accommodated per hertz or unit of bandwidth. Base station capacity and end user equipment is also evolving as evidenced by some of early versions of EVDO and HSPA.  As yet, these current technologies have not adequately catered to the increasing bandwidth the average user is demanding. In the last ITU summit, the industry heralded the latest HP-SDMA systems and LTE variants as the panacea for high capacity wireless data networks. A number of such systems have been launched in parts of the world and this latest wave of 4G technologies is already in Nigeria and we at Linkserve are proud to be launching a MBWA iBurst network in the country.

As more service providers and network operators begin to leverage on the newer and appropriate wireless technologies, the regulator has to proactively avail appropriate frequency to enable this. The international regulatory environment is currently going through a number of restructuring of the spectrum usage and designation with more frequency bands being re-harvested for digital data services. We anticipate that the NCC will accelerate the adoption of these new frequency maps and allocate the re-harvested frequency for immediate licensing.

NCC, being the custodian of the USPF, needs to redefine the policies governing the access to this dormant pool of funds. Allowing technopreneurs access to funding to be able to deploy the new and upcoming technologies is the third and most crucial ingredient to catalyze the deployment of next generation networks.

The myth that the limitation of the growth of data services network is the unavailability of or high cost of user devices is soon disappearing as the cost of laptops and computers is now around $200. This is especially so with the latest wave of netbooks, notepads and fusions between mobile phone and mobile computer. In addition, mobile phones are now coming with multiple network type access GSM/WiFi/CDMA thereby allowing users connectivity on an assortment of devices.

Once again we see Linkserve taking the lead in this market as we take on the challenge of market leadership in the wireless broadband space.

Thank you.