#mp2013 presentation by the minister of communication technology

MID-TERM REVIEW

TUESDAY, JUNE 18, 2013

Ministry of Communication Technology

THE HONOURABLE MINISTER OF COMMUNICATION TECHNOLOGY MRS OMOBOLA JOHNSON

presentation made at the:

MINISTERIAL PLATFORM

by

Outline

• Introduction: the story so far

• Mid-term Review: Ministry Priorities

– Connect Nigeria

– Connect Nigerians

– Innovation, Job Creation and Local Content

– ICT in Government

– Enabling Environment

• Conclusion: the next two years

© 2013. Federal Ministry of Communication Technology

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INTRODUCTION

The story so far

• Ministry created in 2011 out of a recognition of the role of ICT: – economic development wealth and job creation

– social development facilitating expansion of social service delivery across dispersed population

• Concentration of focal ICT agencies under one umbrella – achieving better sectorial performance by reducing duplication

– capitalising on synergies between complementary agencies

– achieving economies of scale and scope to deliver value to the Nigerian economy and society


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MID-TERM REVIEW

Ministry Priorities

To deliver on the promises of the transformation agenda by addressing the challenges in the ICT industry and leveraging the opportunities in ICT for socio-economic development:


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Speed up the building out of communications infrastructure so that all of Nigeria has access to good quality telecom services and high-speed internet

Ensure that Nigerians have affordable and reliable access to devices and have the capacity to use them; so that all Nigerians can share in the benefits of ICTs

CONNECT NIGERIA

© Hamilton Research Ltd., 2013

CONNECT NIGERIANS

Ministry Priorities


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Lower the barriers to entry and increase the participation of Nigerian companies in the ICT sector; and stimulate job creation in the industry

Increase the adoption of ICTs by government to achieve greater transparency, efficiency, and productivity in governance and citizen engagement

Provide a predictable and stable environment that supports the development of the ICT sector

ICT IN GOVERNMENT

LOCAL CONTENT

ENABLING ENVIRONMENT

CONNECT NIGERIA

Connect Nigeria


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Increased Access to ICT Services 2011 2012 2013 2015

% Teledensity • Fixed lines • Mobile subscriptions

0.5% 68.5%

1.5% 71.5%

1.8% 83%

10% 98%

% of Population with Internet access • % Access of rural population

29% 1.5%

34% 1.6%

36% 42%

% Mobile phone coverage of rural areas NA 40% NA 60% 100% by 2017

Cost of Broadband subscription (3Gb package/yr)

N93,000 N72,000 N60,000 N36,000 50% Reduction

Speed of Broadband Access (Mb/sec) 1.0* 1.8* 2.4* 5.0

* Actual speeds are of those available in cities (Lagos, Abuja, Port-Harcourt)

Connect Nigeria

• Context: – Whilst the number of mobile (GSM) subscribers is increasing, fixed

line subscribers has stagnated, and fixed wireless declined – Connectivity is concentrated in urban, commercial areas; approx. 40%

of rural areas has no mobile coverage – Challenges in the operating environment are constituting a limiting

factor on further expansion of telecom networks and quality of service

• What we need to do: – Increase the spread and scope (i.e. types of technologies) of

communications infrastructure across Nigeria – Prioritise roll-out to un-served and under-served areas


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Infrastructure Expansion 2010 versus 2013


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MICROWAVE

TRANSMISSION

# of Base Stations

SATELLITE

# of Satellites

Covering country

FIBRE-OPTIC

TERRESTRIAL

Distance (Km)

FIBRE-OPTIC

UNDERSEA

Capacity (Tb/sec)

SATELLITE

# of Satellites

Covering country

Microwave Transmission


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MICROWAVE

TRANSMISSION

# of Base Stations

btw

4,000 to

5,000

FIBRE-OPTIC

TERRESTRIAL

Distance (Km)

FIBRE-OPTIC

UNDERSEA

Capacity (Tb/sec)

The number of base stations in Nigeria has increased exponentially since the inception of GSM providers. From 116 in 2001 to about 21,000 by 2010

The pace of growth has however slowed even as some existing base stations have been decommissioned as a result of terror attacks, theft and vandalisation

Growth in Base Station Deployment


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Factors impeding/slowing down deployment: 1.Higher set-up and operating costs - due to multiple taxation fees and levies; lack of sustainable power supply; vandalisation and theft of equipment 2.Delays and ‘opportunity costs’ - due to multiple regulation and un-standardised application and approval processes 3.Security challenges - vulnerability of infrastructure and personnel

About 150 Base Stations were lost in 2012 due to bombings and flooding; twice as many dependent Base Stations were also affected

Where We Are Now and Where We Need To Be


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2013 2018

Circa 60,000

27,000 Operators committed to spend at least US$6bn on infrastructure as from 2013

However, investment hampered by: • Increasing incidences

and values of taxes and levies requested by States

• delays in obtaining approval to build Base Stations

Includes US$3bn syndicate loan facility extended to major operator in the market = biggest financial deal in sub-Saharan Africa Communications Sector

Request for N250m Ecology Tax from operators to deploy Base Stations Operators waiting for 6 months for approval to deploy 300 Base Stations

Significantly more base stations need to be deployed across the country to meet national target of a five-fold increase in broadband penetration by 2018

What the Ministry has Done

• Facilitated increased confidence in the Nigerian communications sector leading to willingness to increase investment in infrastructure – Secured commitment of Government at the highest level

• His Excellency, Mr President facilitated merger of three (3) CDMA operators • His Excellency, Mr Vice President led Delegation to ITU Telecom World 2012

• Engaged with industry stakeholders to identify challenges and negotiate solutions – Secured agreement with State Governments via National Economic

Council to eliminate multiple taxation and streamline application and approval processes

– Harmonised regulation of base stations between NCC and NESREA


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• Extending communications infrastructure to un-served and under-served areas – Accelerated Mobile Phone Expansion (AMPE-BTS) programme

is helping to deploy Base Stations in rural areas • Total of 54 Base Stations installed; 28 more planned for 2013

– Rural Broadband Initiative (RUBI) provides wholesale internet bandwidth to ISPs, Cyber cafes, and ICT centres like Community Communication Centres (CCC) in rural communities • Of the 18 pilot sites selected, 12 are 95% complete and transmission

testing is currently on-going in Akure and Osogbo


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Fibre-Optic Networks


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FIBRE-OPTIC

UNDERSEA

Capacity (Tb/sec)

FIBRE-OPTIC

TERRESTRIAL

Distance (Km)

Approx. 30,000km of fibre had been laid as at 2010. Additional 11,000km was laid since then (of which 4,000 over power line) However additional fibre is mainly duplications along a few commercial routes

Since then an additional 5.1 Tb/s of capacity has been added making a total of 10Tb/s This total is expected to increase further to a potential 15Tb/s by the end of the year

Access to a potential 4.76Tb/s of international bandwidth capacity as at time Ministry was created

The roll-out of the terrestrial fibre-optic network is not keeping pace with the increasing international bandwidth landing on Nigeria’s shores

National Backbone Network


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© Hamilton Research Ltd., 2013

Pace of deployment influenced by amount operators have available for actual construction once permits and levies have been paid for

Build Cost – Long Haul (“Inter-State”)


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40% 20% 40%

Right-of-Way Taxes & Levies Civil Works, Fibre & Equipment

5 93%

BEFORE

AFTER

Percentages are indicative**

Worked with the Federal Ministry of Works to review regulations on Federal Right of Way (RoW) Result is that process of applying for RoW has been standardised and applications are processed within 21 days. Furthermore, the price of RoW has been reduced to N145,000 per linear km

Build Cost – Metro (“Intra-City”)


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40% 30% 20%

Right-of-Way Taxes & Levies Civil Works, Fibre

& Equipment

5 10 85%

BEFORE

AGREED

Percentages are indicative**

Procurement of right of way in States ranges between N690,000 to N6.5m per linear km

Includes: Yearly Operating Levy, Ecology Tax, Sanitation Levy, Town Planning Fee etc.


• Worked with Ministry of Works to standardise application process and pricing for right-of-way at Federal level

• Developing of legal instruments to secure ICT infrastructure Nationwide

• Obtained commitment by State Governments (via the National Economic Council) to collaborate on multiple taxes and regulations – Negotiated single tax payment to all State government agencies on

annual basis – Streamlined right-of-way applications to be processed in 30 days

and revising price downwards from as high as N6.5m per linear km to N145,000 per linear km

– Issue Executive Order protecting key infrastructure pending passage of Critical Infrastructure Bill


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• Obtained commitment by Operators to collaborate with State Governments – Operate a “dig-once policy” - make all ducts available on an open

access basis to eliminate multiple deployments and damages to State infrastructure

– Agreement to lay passive fibre to all State Institutions within 1km of operator’s proposed route

– Explore ways to integrate fibre infrastructure in future State-funded projects – e.g. building ducts into new road projects etc.

• Extending communications infrastructure to un-served and under-served areas through Government subsidies – 500km of fibre deployment currently under construction via

Backbone Transmission Project (B Train); 3,000km targeted for deployment in 2013/2014


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Satellite Transmission


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MICROWAVE

TRANSMISSION

# of Base Stations

SATELLITE

# of Satellites

Covering country

FIBRE-OPTIC

TERRESTRIAL

Distance (Km)

FIBRE-OPTIC

UNDERSEA

Capacity (Tb/sec)

11 Satellites currently positioned to provide coverage over Africa Capacity utilised for delivering communications and broadcasting. Represent ‘cheapest’ technology for reaching isolated/rural areas Launched NigComSat-1R satellite in December 2011. Signed MOU with STM Networks Inc. to commercialize all Ka-Band on NigComSat-1R


• Ensured the environment is ‘enabling’ for consumers – Implementation of Mobile Number Portability – Monitoring and/or banning of promotions by operators – Minimising/curbing potential for anti-competitive behaviour

• Assessment and declaration of dominant operator(s) in sub-sectors of the mobile market

• Review of prices operators charge each other for terminating calls on their network (Interconnection)

– Tariff reduction through implementation of price cap for Short Message Service (SMS)


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CONNECT NIGERIANS

Connect Nigerians


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Key Performance Indicators 2011 2012 2013 2015

Device Ownership / Penetration • Personal Computers • Mobile Devices

NA NA

4.5% 60%

7.0% 70%

12% 82%

Emergency Communications Centers (ECC) - - 2 36

# of Public Access Venues 2218 2368 2468 2500

Tertiary Institute Access Project (TIAP) 70 74 - 374

TIAP Ph. II End user devices & electronics - 17 - -

TIAP Universities Inter Campus Connectivity - - 17 -

Nigerian Research & Education Network (NgREN)

- - 27 46

Connect Nigerians • Context:

– The rate of adoption of ICTs by Nigerians is low: • 0.9% of Households owned a PC, and a further 3.6% had access to one [NBS Survey, 2011]

• 0.5% of Households owned the device they use for accessing the Internet, and a further 3.1% accessed the Internet through other means [NBS Survey, 2011]

– Ownership and adoption rates exhibit socio-demographic patterns • Ownership and adoption rates are lower in rural areas than urban and amongst

women then men

– Ownership and use therefore need to be improved overall but more so amongst those with the most to gain from a more inclusive development agenda

• What we need to do: – Make access to infrastructure and devices (PCs and handsets) easier, more

affordable – Increase digital awareness and literacy amongst the population


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Public Access Venues (PAVs)


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Community Communication

Centre

Post Office

Rural ICT Centre

Approx. 2,380 PAVs established, however not evenly distributed across the country. Some in very close proximity to one another

Clinic/Health Centre

School

Library

Community Centre

Post Office

Implementation of guidelines on deployment of PAVs is resulting in better coordination and more efficient and equitable spread of resources

Inclusive Development


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An unacceptably high number of Nigerians are excluded from infrastructures that can meet their basic needs. Increasing the spread of ICTs (mobile phones in particular) can be a means through which this can be corrected.

ICTs contribute to increasing social welfare and security. By being applicable in the delivery of education, health, security and other “basic needs.


• Declared Nigerian students a priority – Collaborated with Ministry of Education, NUC, USPF and Worldbank

(STEP-B) to deploy a fibre-optic Research and Education Network • 27 Federal Universities connected by July 2013 (links currently being

tested) • 12 Medical Colleges, 28 off campus sites and 9 Federal Universities by Sep

2013 • State Universities, Polytechnics, Colleges of Education in 2014/2015

– Tertiary Institutions Access Project (TIAP) provided desktop computers, printers, wireless network facilities etc. to tertiary institutions • Implemented in 204 Institutions from 2010 – 2012; 74 institutions in 2012 • From 2013, TIAP Universities Inter-Campus Connectivity providing fibre

connectivity between 17 Nigerian Universities and their corresponding Medical Colleges/Teaching Hospitals


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• Declared Nigerian students a priority (cont.) – School Access Project (SAP) provided Classmate PCs, with

e-learning content and accessories, solar power solutions, high speed internet connectivity and wireless network deployment to government public schools • Implemented in 605 Schools between 2010 – 2012; additional

218 schools in 2013

– Student Computer Ownership Scheme allows students to purchase laptops via low interest rate loan with monthly repayment plan of between N3,500 and N5,800 • All Federal and State Universities now signed up • 50 Universities active on the portal


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• Contributed to improving security through establishment of Emergency Communications Centres – Two pilot sites operational (Anambra and Niger States)

• Target is to have one emergency response centre in each State • Civil works completed in 25 States; Installation of equipment and

connection to telecom operators completed in 11 States

• Contribute to reducing proportion of adult Nigerians excluded from financial services from 46.3% (2010) to 20% by 2020 through: – Reform of Nigeria Postal Services (NIPOST) – Development of postal outlets to become venues for financial

and economic inclusion


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INNOVATION, JOB CREATION & LOCAL CONTENT

Innovation, Job Creation & Local Content


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# successful software companies launched NA NA NA 25

# innovation hubs set up NA NA 02 04

Venture capital available to ICT - - $15m $50m

% of devices assembled in Nigeria 11% 20% 20% 50%

Types of devices assembled in Nigeria Notebook PCs

Notebook PCs

Notebook PCs Handsets

Notebook PCs Handsets Set-top Box

Average size / turnover of ICT companies N181.8bn N183.7bn N185bn N200bn

# of handset assembly factories in Nigeria - - 02 04

Innovation, Job Creation & Local Content

• Context: – The Nigerian ICT Industry is dominated by international companies – They have:

• 70% of the PC market share • 100% of mobile phone market share • 78% market shares of mobile network operators

– Software imports into Nigeria estimated at about US$1bn annually (NOTAP)

– Participation of local companies further restricted by predominance of unspecialised value chains highly fragmented industry and intense competition in limited, ‘fringe’ sub-sectors

• What we needed to do: – Create enabling environment for innovation; lower market-entry barriers

and increase the participation of Nigerian companies – Stimulate job creation in the industry


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Creating Virtuous Cycles


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Innovation

Local Content

Job Creation

Ministry initiatives like Tech Launch Pad identify the best talent and match them to industry Innovation hubs provide platform for talent to develop their solutions, be mentored and learn business skills VC fund aimed at ICTs look to innovation hubs (as well as larger market) for worthwhile projects

Local handset manufacture will be key market for: locally designed apps, games, film, TV, blogs, news as well as apps created round data sets released under on-going Open Government Project Locally hosted sites and increased peering points will optimize use of available bandwidth

Digitizing government data sets will create immediate opportunity for entry level ICT jobs Locally sited handset factories as well as improved operations at local OEMs will create new job opportunities for ICT market.

Nigeria pavilion at ITU World 2012 in Dubai featured young ICT entrepreneurs

Growing Local Participation in ICT Industry


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Network Service

Providers

Device Sales & Distribution

Device Maintenance & Repairs Call Center

Operations

Research & Development

Infrastructure Services

Support Services

Software Development

Software Distribution & Sales

Access Provision

Value Added

Services

Equipment Assembly

Equipment Sales & Distribution

Equipment Maintenance & Repairs

Device Assembly

Infrastructure Service

Providers

Software Installation & Customization

Software Maintenance & Support

• Oxygen Broadband

Networks

• OTG Playa

• Veda Computers

• Encipher Inye

• Websoft - Vantium

• Co-Creation Hub

• Cinfores

• Varsoft Technologies

• Mobiqube

• Tavia technologies

• Rightclick Nigeria

SLOT

• Computer Village, Ikeja

• Computer Village, Abuja

• Banex Plaza, Abuja

Local representation in the ICT industry is growing with new wave of industry leaders (most below 40 years old and running companies on the average under 5 years).

• MyPaga

• Wakanow

• Dealdey

• Konga.com

• Jobberman

• BudgIT

• Mairuwa

• iWatch

• Pledge 51 (online

constitution)

• Ticketmobile

• Nairalist

• Iroko • uConneckt

• Interra

• Console

• CNSS Ltd • Efiko

• Asa

• Wayopedia



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• Developed and implemented an IT Incubation Programme to catalyse ICT Industry by helping Nigerian ICT entrepreneurs create successful businesses – Public-private partnership establishing Government-

facilitated, private-sector managed Innovation Centres • Lagos Centre launched April 2013; Cross-River (Calabar) to be launched

July 2013

– Established IT Innovation Fund; first venture capital fund solely focused on ICT businesses • Seed fund provided by Government • Private-sector entity Fund Manager recruited in Jan 2013 • ‘First close’ July 2013 at US$15m.

Information Technology Developers Entrepreneurship Accelerator (iDEA)


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iDEA Centre

296 Herbert Macaulay Way, Yaba, Lagos State



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TechLaunchPad applicant A: Cutting edge authentication solution for financial services

TechLaunchPad Applicant B: Data management solution for the Oil and Gas industry

TechLaunchPad Applicant C: Back-office solution for petrol stations



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• Implemented initiatives to build local capacity to engage in ICT sector jobs – Partnering with multi-nationals to increase supply of local

highly skilled talent in a fast growing sector • SAP launching program to train unemployed graduates in business

management and ICT skills • Huawei providing vocational ICT training to 1000 girls • Partnership Agreement with Cisco to build Cisco Academy for highest

certification (CCIE: Cisco Certified Internetworking Expert)

– Increasing awareness of existing/new opportunities of employment and equipping Nigerians to take advantage of them • Launch and expansion of e-Lancing and Micro works project in

partnership with Federal Ministry of Education (STEP B) and State Governments


• Local content guidelines developed with strong stakeholder input

– Stakeholder roundtable conference held in May 2013

• Recommendations to:

– Promote appropriate quality assurance and certification standards among local OEMs, software developers • World Bank funding secured for required training (ISO, CMMI)

• Recapitalization levels for OEMs to improve stability, resources

• Collaboration initiatives to create adequate support structures (communal return / repair and warranty fulfilment centre)

– Guidelines to be issued Q3 2013


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• Strong, on-going collaboration with the Ministry of Industry, Trade & Investment

– Developing national local content agenda

– Early outcomes show good response from investors entering this space • RLG communications setting up$ 20 M handset, PC, tablet factory in

Osun State to commence production in July 2013

• RLG also providing customized ICT training to Osun State youth

• Mi-Fone, active in 14 other African countries, is presently setting up a $30 M handset factory

– Second technical team visit expected July 2013

– Production commencement planned for Q4 2013


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ICT IN GOVERNMENT

ICT in Government


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Number of Government services delivered online

10 30 45 100

Number of MDAs with effective websites 370 420 480 All

ICT in Government

• Context: – Absence of focal point for the adoption of ICTs by Government, and for

governance resulted in: • Inability to capitalise on economies of scale increased IT expenditure on

hardware and services • Lack of coordination and standardisation of technology used by government high

numbers of legacy, proprietary and interoperable systems • Proliferation of non-standardised data sets and duplication of information (often

using different formats) • Dispersed infrastructure vulnerable to security threats

• What we needed to do:

– Achieve a more comprehensive and integrated use of information and communications technology (ICT) in government to provide better response to citizens’ demands, improve service delivery, and make administration more efficient


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Go

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Citiz

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On

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Se

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Deliv

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Ministry has approval of the Federal Executive Council on the following: •Adoption of IT Shared Services •Establishment of Chief Technology Officer cadre in civil service to bring efficiency into annual budget process for MDA’s IT projects •Advisory services on e-Government Projects to all MDAs •Independent programme management on systems integration projects above N100m •Stimulation of local industry through government procurement (hardware, software, services) •Central Repository of all major government ICT projects •Collaborative approach to content development and maintenance

Will lead to delivery of…



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• Connected Government – Implemented e-Government priorities of the National ICT Policy

• Improved coordination within Federal Government through establishment of ICT cadre in civil service.

• Improved coordination extended to States through establishment of National Council of ICT Heads

– Increased capacities of initiatives aimed at connecting MDAs • Over 382 MDAs connected in Abuja and other parts of the country; more than

200 Servers hosted by Galaxy Backbone for more than 94 MDAs • Expanded Government Wide Messaging and Collaboration (GWMC) Technology

Platform – deployed over 86,089 email addresses on .gov.ng domain names to provide additional 70,000 in 2013

**Galaxy Backbone’s 1-GOV.net awarded 2013 United Nations Public Service Award in “Promoting Whole-of-Government Approaches in the Information Age” category



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• Informed Citizenry – Upgrade of Ministry website and development of standard

template; commencement of roll-out across Government – Established 150-seat government contact centre in Abuja

(launch date Q3 2013) • Trained 250 Servicom staff in preparation for new roles • Centre will create 1,250 jobs and contribute towards stimulating Call

Centre outsourcing

• Online services delivery – Launched Government Services Portal

• Selection of services of Ministries of Communication Technology, Education, Health, Agriculture, Trade & Investment now accessible from the portal

• Target of adding 25 - 30 services to the Portal each year (up till 2015)


• Open Data Programme – Aims to increase non-sensitive government datasets online in

accordance with the Freedom of Information Act • Builds on existing initiatives promoting ‘openness’ such as: Nigeria

Extractive Industry Transparency Initiative (NEITI) Act, National Bureau of Statistics Open Data Portal, Bureau for Public Procurement Federal Tenders Portal, release of Federal Government budget online

– Concluded consultancy and workshop phase of programme • Country assessment, multi-stakeholder workshops and Open Data

Stakeholder Forum • Design of Implementation Plan and Technology Roadmap for

implementing Open Government Partnership

– Commenced development of implementation plan for improving Open Data amongst Federal Ministries


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ENABLING ENVIRONMENT

Enabling Environment

• Context: – Separated policies existed for the various sub-sectors of the ICT

industry that were being administered with little to no interaction to each other

– Absence of an overall policy and identifiable goals resulted in duplication and at times conflict in objectives of sectorial policies

• What we needed to do: – Define and implement a framework to spearhead and guide the

development of the Nigerian ICT industry – Align policies and laws to capitalise on opportunities and

developments in technology – Attract investment into the industry (local and foreign) – Provide a predictable and stable environment that supports the

development of the industry


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Commenced implementation of some priorities of the National ICT Policy

Completion of work by Presidential Broadband Committee and presentation of National Broadband Plan

CONCLUSION

Ministry Focus (2013 – 2015)

• Continue to enhance enabling environment to ensure Broadband Strategy and Roadmap is successfully rolled out – Critical platform to ensure our targets are met

• Create enabling environment so that expected infrastructure that will support local Cloud Computing offerings is possible – More local SMEs access to ICT services – Increased local hosting – Increased Internet peering points – More local work opportunities

• Work with training partners to improve locally available training and certification offerings – Cisco, Huawei, IBM, Nokia

• Promote and sustain environment that facilitates emergence of ICT-led ‘frugal’ innovation


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Ministry Focus (2013 – 2015)

• Work with the Ministry of Trade and Investment – Ensure attractive environment for possible investors, industry partners – Actively court investors, industry partners – Target local production of handheld devices, simple network elements,

smart cards, consumables

• Expand Government use of ICTs to increase efficiency and effectiveness of governance – Both internally (within Government) and externally (at interfaces with the

private sector and citizens)

• Work with relevant MDAs to increase adoption of ICTs in attainment of national development goals – Agriculture, Education, Health, Banking

• Improve use of Hybrid Power by network operators – Reduce dependence on diesel generators at BTS, MTS sites – Increase use of solar, wind, innovative alternates


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New Economy

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Better

Governance

MID-TERM REVIEW

TUESDAY, JUNE 18, 2013

Ministry of Communication Technology

THE HONOURABLE MINISTER OF COMMUNICATION TECHNOLOGY MRS OMOBOLA JOHNSON

presentation made at the:

MINISTERIAL PLATFORM

by

#mp2013 presentation by the minister of communication technology

Documents