“Yes, we can revive Nigeria’s NITEL” – Dominics Akaahan, German Telecom

minics Akahan , German Telecom

Dominics Akahan is an expert in telecommunications and member of the European Society of Cable and Telecom Engineers. In his 15 years of working at the top management level in the telecom sector, he has applied his skills, and experience to building complex telecom platforms and developing GTM strategies for high-end vendors. As a member of Deutsche Telekom M & A Group, his team “Bid Management” closed approximately 50 merger and acquisition deals in 2001. The Groups’ returns on investment also increased by 42% and 2.8% in 2003, thus, ending the company’s market slump and its emergence as a global player in the telecom market. As the current Director of Operations with German Telekom (T-Systems International), Akaahan is leading a group of Vibrant Telecom Engineers who are currently designing and delivering NGN platform-enabled business solutions to the 100 Top DT Customers. The project focuses on providing end-to-end business solutions that leverage company’s technology and applicable platform infrastructure. He disclosed to Kulturelle Kontakte Magazine, in a recent chat in Germany, the extent to which the telecom industry has gone in terms of innovations and new technologies and how could deploy his wealth of experience to further enhance the fortune of the Nigerian telecom sector. Excerpts:

What are the core responsibilities of German Telekom?

Telecommunications is the pivot on which the scope of our business rotates. German Telekom is literarily one of the pioneers of ICT (information and communication technologies) and a global player in the competitive telecom market. German Telekom has touched, deployed and operated various technologies across its entire Service Creation Platforms, ranging from ATM, Frame-Relay, MPLS, and NGN, embracing WAN, LAN, Voice and Security Solutions. Our business today is focused on the following key areas: integrated networks for the Gigabit Society; more innovation through cooperation; Secure cloud solutions; and delighting customers. These are the current pillars on which Deutsche Telekom business strategy rotates.

We do not relax in transforming our company and simplifying our operational processes to remain a global player in the competitive market. We continue to innovate from within, so as to remain faster and more inventive in order to take existing growth opportunities in the entire ICT sector.

The technologies deployed in telecom industry have witnessed new dimensions over the years. Could you mention some of these and how they have impacted the industry?

Yes. Telecommunications has improved impressively over the years, from the first world installation in 1879 to fibre optic connection which now provides state-of- the-art service throughout the world. As you can see, advances in technology have led to the birth of many new methods of electronic communication, such as social networking websites and videoconferences. The increase of electronic communication has also helped to eliminate time and distance as obstacles to communication. This positive dimension is quite beneficial to the society, including business, education, and medical services.

How about the latest developments in telecommunications?

The situation today is the issue of “digital divide”, i.e., the gap between the technology haves and have-nots. The past few decades have seen a steady increase in individuals’ reliance on and use of computers in communities around the world. However, these technologies are not equally or universally available to all individuals and communities in some parts of the developing countries, as you can see. Disparities exist in ICT access. It is sad to point out that despite this high take up of ICT and the Internet, a digital divide exists between rural and metropolitan areas. Furthermore, many problems face the African continent in the area of ICT development. The costs of computers and information services are very high. Much of this is caused by the lack of infrastructure in place to manufacture advanced technologies and the limited development of ICT networks.

With respect to your explanation, what is the situation in Africa, especially Nigeria as of now?

Mobile phone networks dominate Africa’s telecommunications markets, providing around 90% of all subscriber connections. The subscriber base is still growing at around 5% per year across the continent, which is a slow growth ratio. Nigeria on the other hand, embraced Digital Technology in the 1980s with the introduction of Digital Switches and Transmission Systems (Radio and Optic fibre) into the network. In the beginning of the ’90s, Mobile Telephone Services (Cellular), Paging and Electronic Mail were part of the services offered by NITEL/MTEL (Nigerian Telecommunications Plc) with its X.25 and X.40 switching Technology as the Backbone Infrastructure. Nigerian Telecom sector ventured into harnessing the total values of ICT during the new millennium; hence the GSM revolution which began in August 2001. Mobile telephony has rapidly become the most popular method of voice communication in Nigeria. Growth has been so rapid in the country to the extent that experts envisage the GSM market as “one of the fastest growing GSM markets in the world. Indeed, these developments have been truly explosive. Today, Nigeria has well over 30 million mobile subscribers and over 5 million fixed lines.

Could you shed more light on the role of data communication in stabilising telecoms in Nigeria?

As a matter of fact, besides the terrestrial infrastructure and boadband access, there are many data communication technologies that use low power radio waves to transmit data, which could balance the other part in order to stabilise telecommunications in the country. Take for instance, CDMA (which today is widely used in most cell phones transmissions in Nigeria); FM (used in Radio Service walkie talkie); Frequency-hopping spread spectrum (FHSS) (used in Bluetooth); and Direct-sequence spread spectrum (DSSS), used in IEEE 802.15.4 Access for data transmission is not just compelling issue; cost affects usage. High cost is still a barrier. While OPEX (Operational Expenditure) has improved tremendously, the cost of access is still too high to have a transformative impact. There are price competition battles always going on between the PTOs and GSM providers, which are steps in this direction. The provision of the Internet by PTOs is also helping. But more needs to be done with regard to bringing down call tariffs and rates not just the deployment cost. The objective should be low-cost Internet and phone services.

In your opinion, what are the issues with NITEL, Nigeria’s First National Operator (FNO)?

It takes an expert with strong technical experience to analyse the issue with NITEL (Nigerian Telecommunications Limited) properly. Let’s start from the top. Deregulation of the Nigerian telecoms sector began in 1992 with the establishment of the Nigerian Communications Commission (NCC) by Decree 75. The exercise did attract new operators (service providers) from within and outside the country. Between 2001 and mid-2002, NCC had licensed four digital mobile operators, namely, MTN, Econet, NITEL and Globacom. The issues with NITEL today, began in 1992. The FNO was not well-positioned before the deregulation exercise. Before the emergence of these service providers in Nigeria, please note that NITEL was a functioning company, and owned the entire telecom infrastructure in the country. All the service providers who acquired Operational Licenses between 2000 and 2002 rode on the back of NITEL to victory.

But why is the entity not functioning today?

The reasons why NITEL is not functioning today are quite numerous. Let’s start by focusing on the core issues, i.e., poor management and wrong positioning; poor management in the sense that, in the mid-1990s, NITEL was a functioning entity because it held a monopoly over basic telecom services. Possibly spurred by the imminent licensing of a second carrier, in 1994, NITEL announced plans to invest N40billion Forty billion Naira) over a five-year period. The money was to come from both internal and external (unilateral lending institutions and the private sector) sources. That arrangement was made without the required strategic plans to capture the competitive market, the product portfolio and the service offering elements were quite minimal, making it hard for the company to compete with the hawks. Furthermore, wrong positioning because, both NCC and NITEL are Nigerian Federal Government institutions. One of the objectives of a local regulatory body is to protect the FNO from being swallowed by incoming service providers. At some point, NITEL was not well-positioned to control the evolving market; hence it became susceptible to wrath of the ICT market.

What solutions would you proffer to revive the fortune of the company?

In order to save an ailing telecom carrier, you have to review its current mode operations (CMO), and then you have to set up a Future Mode of Operation (FMO) along the planned business objectives. I am talking about Transition and Transformation.  With regard to the right technical partners, we do not need an out-of-the-box solution to rescue NITEL. Telecommunications is what I do best, and I have managed even more complex networks and telecommunications platforms in Europe, Middle East and the Americas to success. I am willing to bring my rescue package home (Nigeria) anytime if called upon to save the situation. Now that we have the right technical partners who are willing to bring the knowledge back home, we have to move swiftly to embrace this opportunity, and give us the chance to implement the change. All the brouhaha about selling off part of NITEL shares to the right technical partner is not taking us anywhere. We have to first of all clean up the mess in the house before putting it in the market. That is the only way we can attract prospective investors. As a matter of fact, I have much respect for Nigeria’s President, Dr. Goodluck Ebele Jonathan and his administration’s policies. But there are some silent beneficiaries from the non-performance of NITEL going about freely in Nigeria. These beneficiaries are now ganging up with some operators to acquire NITEL for peanuts; they are not telling Mr. President the truth about NITEL. They take every opportunity to portray the entity as an unprofitable venture. They even claim that NITEL cannot generate any returns on investment. However, all this analysis is totally wrong. The business of technology deployment is no child’s play. Stakeholders have to invest extensively in the platform in order to benefit from the returns on investment.   For God’s sake, Nigeria cannot sell the First National Operator (FNO). My advice to President Jonathan is to upgrade the production platform in order to deploy a state-of-the-art technology. Furthermore, NITEL in its current state as it is today, is very manageable.  Most of the accumulated debts have been paid off, but the backbone is filled with outdated devices which cannot run the features of today’s cutting edge solutions.

What about outsourcing NITEL?

In order not to hit some unforeseen obstacle along the production line, an operator has to have a total control of the following cost scenarios, i.e. Capex (Capital expenditure); Opex (Operational Expenditure) and the EBITDA. With all these in place, one will have a complete overview of the due diligence and cost-effective factors. That way, it is easier to outsource some of the platform environment to competent technical partners. Although we did see some project rollout with Pentascope and British Telecom in the past, all their efforts went down the drain, because they did not study and understand the geographical terrain, have no clue of Nigerian market forces, and could not say a word about the economic situation and political dispensation. That is why they failed, because they went to work with one of their hands tied to their backs. There are areas we can touch and the Federal Government does not need to invest some of the monies these vendors are asking for. At this stage, it is wiser to use what we have to get what we want.

Are you saying that the Federal Government does not know about these solutions or that the government is just not ready to bulge?

No, don’t get me wrong. The Federal government of Nigeria is doing a great job, and the deregulation policy is a move in the right direction. We have seen various ICT enablers unfolding due to the deregulation procedure. In order to bring the technology back home, we have seen various efforts by the Federal Government of Nigeria to have manufacturers set up plants in Nigeria, as a result of rationalisation and the selection of a number of technologies for adoption in the country. A quick overview of Nigeria’s international traffic flow indicated that the country generates as much as 790 erlags of such traffic but that about 45 % of this is directed toward continents other than Africa. 40 % of this large traffic volume terminates in the United Kingdom, which has had a long-standing historical and economic bond with Nigeria. About 30 % of the traffic from Nigeria is now directed toward North America, a reflection of the growing trade relations between the two. There are very few direct circuits to other African countries. These are issues why the Federal Government cannot regulate such a scenario. They are the sole responsibility and of the operators themselves.  Technology and power supply goes hand in hand; loss of power can be very disastrous to a running device. I also commend Jonathan in his efforts at improving the nation’s power supply.

Your piece of advice for President Jonathan of Nigeria.

With regard to NITEL, there is nothing like late starters. As a matter of fact, late-comers are often very careful not to imbibe hook, line and sinker the evolved policies of those early entrants. They apply wisdom in not repeating the mistakes of early entrants into any technological market; we should brace up efforts to revive NITEL. As a matter of fact, the Federal Government is losing huge returns everyday because NITEL is incapacitated. We can proceed with skeletal operations and move into full swing within a short time. Furthermore, telecom cost to the consumer will be prohibitive when compared with other countries if our national electrical power infrastructure remains poor and our electric supply is erratic. In conclusion, I want to say that the broader world of information and communications technologies (ICTs), They have exciting prospects in the Nigerian market, and will attain greater heights even quicker if all technological i’s and t’s are properly dotted and crossed respectively.

How successful is German Telekom?

Very successful!

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