Driving broadband inclusion through innovation and competition michael ikpoki, mtn nigeria

Driving Broadband Inclusion through Innovation and Competition

Michael Ikpoki CEO, MTN Nigeria

CTO Forum 2013 Abuja, Nigeria

© 2008 Mobile Telephone Networks. All rights reserved.

Outline

• Our Foundation for Broadband Deployment

• Driving Broadband Inclusion through Constant Innovation and Fair

Competition

• Drivers for Broadband Rollout

• Opportunities for New ICT Products & Services

• Our Common Focus & National Objectives

• Realizing our Objectives

• Drivers for Innovation and Competition

• Closing Thoughts

• Discussions and Feedback


Our Foundation for Broadband Deployment MTN Nigeria

• A commitment to our vision: to deliver a bold, new digital

world to our stakeholders; making our customers’ lives a

whole lot brighter.

• We have built Sub-Saharan Africa’s largest and most

sophisticated Telecoms Network in Nigeria – as the largest

telecoms investor in Nigeria with over N1trillion.

• We are re-engineering our network with conversion to an all IP

network coupled with intensive investment in human capacity for

Broadband rollout and operation

• Our service footprint covers over 766 of Nigeria's 774 LGAs, our

10,000+km fibre-optic & 11,400+km microwave transmission

backbone rank amongst Africa’s most extensive.

• We have led the growth in the voice market since 2001 with over

50 million subscribers

• The primary broadband service dependency today is Spectrum.

Our commitment to Nigeria and its economy is building confidence for investment in our

sector and in Nigeria


Drivers for Broadband Rollout • The World Bank estimates that in developing countries,

a 10% increase in Broadband penetration will result in

economic growth of about 1.38%.

• Nigeria’s Broadband penetration rate is estimated at 10% -

government plans to double this to 20% by 2017.

• International connectivity may be deemed sufficient (with a

total of 12.9 terabits/s of bandwidth capacity at the shores),

but capacity is only about 10% utilised.

• The last mile remains a huge opportunity for development –

the estimated current 30,000km of inter-city fibre is

clearly insufficient. It is estimated that about $2 billion in

funding (private and government provided) will be required

annually over the next five years to bridge the broadband

infrastructure gap - Nigeria’s National Broadband Plan 2013

– 2018.

• As with other developing countries, there is a huge disparity

in penetration at densely populated urban areas versus rural

communities - a wide coverage gap at the last mile both in

urban and rural areas.

Driving Broadband Inclusion

Broadband Penetration – Nigeria vs. BRICS, Source, ITU

Current nascent appetite for Data – NCC (2012-2013)


Drivers for Broadband Rollout

• “We see a latent demand for broadband access and infrastructure to drive broadband inclusion across all strata” - GSMA

• IDC estimates Private sector/SME spend on ‘Other’ data services e.g. current demand for IP VPN & Digital Leased Lines will increase from $219.1 million in 2012 to 235.6 million by 2017

• Connectivity is a key necessity for driving e–Governance, financial inclusion & electronic services in the Financial sector & other key industries

• Drivers for the mass market include affordability of available smart devices, attractive content & mobile broadband coverage

• Machina’s Research The Connected Life paper for the GSMA: - between 2011 and 2020

• the number of connected devices globally will grow from 9 billion to 24

• global machine-to-machine connections will rise from 2 billion to 12 billion

• the global impact of the Connected Life is valued at USD4.5 trillion


There is an urgent need to drive penetration & rollout of Broadband infrastructure eg

fiscal & financial incentives, overlay cables over utility/social infrastructure


Opportunities for New ICT Products & Services

Current Service & Product Offerings

• Cloud & Data Centre Services e.g. Colocation, Data

Hosting, Managed hosting

• Machine-to-Machine Services e.g. Fleet management,

Security & Surveillance solutions

• Mobile Solutions for Corporate & SME markets (one

stop shop ICT solutions)

• Introduction of Managed WAN Service to the Nigerian

ICT market

Future Services

• The Connected Life Top 10 Applications – Machina

Research for the GSMA:

• The Connected Car & Electric Car Charging

• The Clinical Remote Monitoring

• Advanced Security Systems

• Assisted Living for an Aging Population

• Pay as you Drive Car Insurance

• New Business models for Car Usage

• Smart meters – water, electricity & other utilities

• Traffic Management

• Advanced Facility & appliance management


Our Common Focus & National Objectives Driving Broadband Inclusion

Cle

ar O

bje

cti

ves

Target Type Medium Current (2013)

Short term (2015)

Medium Term (2018)

Long Term (2020)

National Availability/ Coverage Wireless 35% 60% 80% 95%

National Penetration Wireless 6% 21% 42% 76%

City Availability/ Coverage Wired 1.5% 10% 16% 25%

City Penetration / Usage Wired 0.5% 3.3% 5.3% 8.3%

Community Public Access Venues

Wired/Wireless Hotspots

15% 25% 62% 100%

• Driving Broadband Inclusion: Nigeria has articulated very clear national broadband

growth objectives and targets; its Broadband Plan is a model which other developing

economies in the Commonwealth can benefit from:

Key F

eatu

res Goal oriented

Roadmap set with timelines and clearly designated responsibilities of identified stakeholders

Solutions based

Current challenges to Broadband rollout identified and solutions proffered: e.g. multiple taxation & regulation, dearth of infrastructure, LTE/4G spectrum

Enabling ecosystem

• Policy & Regulation • Provision and protection of infrastructure • Provision of regulatory resources – Spectrum, Cybersecurity, Local content & skills

development • Demand stimulation • Drive implementation via the Broadband Council: a working group of stakeholders.


Realizing our Objectives


Fair

Competition

“Connecting the 4-plus billion people not yet connected to the Internet will require

creativity, greater investment in wireless networks and innovation in service delivery” –

ITU, State of Broadband Report, 2013.

• Delivery of affordable & accessible

solutions tailored to meet needs of

user demographics.

• Practical solutions to power,

education, health and delivery of

social services.

• Aggressive delivery of local

content development ecosystem

(MTN recently launched an Apps

Development Competition)

• Device partnerships to address

access/affordability gaps.

• Investment in carefully deployed

infrastructure to power broadband

dispersion - the MTN WACs,

Blaze/Yellobahn as cases in point.

• Platform/technology convergence

however requires regulatory

convergence.

• Competition is key driver

of investments: “private &

competitive markets have

successfully accelerated

service delivery to a large

customer base, boosting

market growth, enhancing

innovation, increasing

subscriptions and reducing

prices” (ITU, 2013)

• Growth requires progressive

infrastructure sharing

models & frameworks

based on best practice

principles.

• Universal service

initiatives will complement

competition to drive

broadband dispersal to

underserved areas.

Constant Innovation

Fair

Competition


Role of Digital Participation – Case Study South Africa


Fair

Competition

“It takes at least five years for the average individual’s Internet usage to develop from a physical Internet

connection to online self-actualisation…”– World wide Worx, SA, Digital Participation Report, 2012

South Africa Internet User Base vs. Digital Participation Curve ‘000

Timely investment for Broadband inclusion is critical if proven 5-year internet actualisation needs are to be met


Drivers for Innovation and Fair Competition


Regulatory Certainty/ Stability

Stakeholder Support

Supportive Policy

Outlook

• Definitive Roadmap

SMART Goals &

Objectives

• Innovation requires

consistent & forward

looking policy support.

regulatory

flexibility/dynamism also

critical.

• Private sector-led growth

based on carefully

articulated open-access

principles.

• Technology-neutral and

transparent licensing &

spectrum allocation

(including digital

dividend)

• Clear/efficient LTE

spectrum roadmap.

• Best Practice

Adherence

• Participative Rule-

making

• Universal Access

Infrastructure

financing through

competitively

accessed USFs.

• Govt. patronage of

local solutions on a

priority basis.

• Robust Infrastructure

Protection framework.

• Smart incentives for

rural roll-out

commitments).

• Govt-Operator rollout

partnerships e.g. RoW

trade-offs.

Fair

Competition

Constant Innovation

Fair

Competition

The Hong Kong Example:

29.9% fixed BB & 75%

mobile BB penetration - it

is possible for the market

to drive network roll-out

with minimal government

intervention and subsidy


Closing Thoughts…

• Realizing the Opportunities Broadband presents to Nigeria requires a concerted effort –

facilitation of expedited broadband infrastructure rollout for the last mile, issuance of

requisite spectrum, service innovation and competitive frameworks which are backed by a

supportive policy, regulatory and stakeholder ecosystem offer the best platform for

success.

• Commonwealth government are therefore encouraged to

• Allocate additional spectrum (especially Digital Dividend spectrum) to support broadband

services.

• Free up spectrum bands that are either unused or underutilized (including by public

sector agencies) and re-allocate same to services that could use the spectrum to generate

greater benefits for society.

• Promote flexible use of spectrum, technology neutrality, spectrum trading and other

measures which would facilitate the efficient utilization of scarce spectrum resources to

support deployment at the last mile.

• Provide enablers such as build-out of passive infrastructure e.g. towers and ducts,

allocation of incentives, tax benefits, etc.

• Eliminate (or at least reduce) last mile bottlenecks such as Right of Way challenges,

security and access issues, etc.

• Consider coverage obligations on licensees so as to address identified gaps within the

broadband ecosystem.

• Speed up implementation of good governance and other initiatives for better efficiency and

transparency.

Conclusions


Discussions and Feedback…