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…

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

Technology

broadband deployment

broadband inclusiondrivers

broadband access

mobile telephone networks

data services

current demand

ip network

fair competition drivers