Providing Seamless Connectivity in E-commerce

Prof. Umar Garba DambattaExecutive Vice Chairman, Nigerian Communications Commission

Content•Context

▫ The Nigerian Telecommunications Industry▫ Connectivity Statistics

•Broadband/ Data Services▫ What is Broadband▫ Current status▫ Challenges of Broadband Development in

Nigeria▫ Broadband and Frequency Spectrum▫ National Broadband Infrastructure Initiatives

•Conclusion

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Context

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The Nigerian Telecommunications Industry• Increasing use of data enabled devices (Smartphones, dongles,

MiFis etc)• Voice service dominates the industry (Dominated by the 4 GSM

providers)• Internet and VAS usage increasing• E-commerce entities increasing• Increasing confidence of transacting online by the populace• Online transaction security becoming critical• Increasing network coverage for 3G and 4G data services• Increased Colocation of services• Reducing Average Revenues per User• Increasing competition among players• Rather limited competition to GSM providers in the mobile

broadband segment• Continued strong growth from the mobile sector threatens fixed-

line growth with mobile substitution• The insurgency in the north threatens the operations and

network expansion plans of service providers

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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 422480.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

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80.00

100.00

120.00Active Voice Subscribers and Teledensity - December 2002 to

Sept 2015

Subscribers (Millions) Teledensity (%)

Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Sep-15Subscribers (Millions)

2.27 4.02 10.20 19.52 33.86 41.98 64.30 74.52 88.35 95.89 113.20 127.61 139.14 150.70Teledensity (%)

1.80 3.19 8.10 15.49 24.18 29.98 45.93 53.23 63.11 68.49 80.85 91.15 99.39 107.61

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2012 2013 2014 422480.00

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40.00

60.00

80.00

100.00

120.00

0.00

10.00

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80.00Internet Subscribers and Penetration Dec 2012 to Sept 2015

Internet Subscribers (Millions) Internet Penetration (%)

2012 2013 2014 Sep-15Internet Subscribers (Millions) 30.94 64.23 76.32 95.40Internet Penetration (%) 22.10 45.88 54.52 68.14

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Broadband / Data Services

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What is Broadband?

Broadband within the Nigerian context is defined as an internet experience where the user can access the most demanding content in real time at a minimum speed of 1.5 Mbit/s.

Source: Nigerian National Broadband Plan

Traditionally, the term broadband referred to high-speed communications networks that connected end-users at a data transfer speed greater than 256 Kbit/s.

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Current Status

- International Submarine Cable landings at our shores

- Inadequate metro fiber infrastructure in several cities

- Distribution and last mile challenge

- Over 30,000 km inter -City Fiber laid already

- Unutilized Capacity Due to Duplications in some inter-city fibre routes

- Internet access mainly through wireless means

- Relatively limited locally relevant content

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Challenges of the ICT industry in Nigeria

• The challenges of the ICT industry in Nigeria have also been identified as the absence of a robust national backbone infrastructure, high cost of access to devices, threat of power supply, right of way issues, damage/vandalization of fibre infrastructure, multiple regulations and taxation, discriminatory special high taxes and security of telecommunications infrastructure, spectrum availability -underutilization and non-utilisation of spectrum.

• Investment and funding have also contributed to the rate of deployment of needed infrastructure for the telecoms industry. Telecoms infrastructure is capital intensive and while it is also true even at the level of investment so far, more would have been achieved if the operators had shared infrastructure at various levels.

Challenges of Broadband Development in Nigeria

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Supply Side Demand Side

• Cost of terminal devices• Availability of applicable

content• Cost of broadband access• Relatively low level of

digital literacy• Unsatisfactory

“broadband” speeds• Scale of fake or sub-

standard devices• Poor perception of

broadband value• Government policy• Electrical power supply

• Relatively limited Infrastructure sharing

• Power supply issues• High Right of Way charges and

multiple taxes and levies• Duplication of backhaul

intercity fibre• Lack of metropolitan fibre

infrastructure• Multiple Taxation and

regulation• Limited spectrum bandwidth• Discriminatory pricing by

existing infrastructure owners• Security and Community issues• Government policy• Availability of skilled manpower• Clear regulatory frameworks• Profitable data business model

Broadband and Frequency Spectrum • Broadband is the centrepiece of the digital age

• National Backbone Broadband Networks in conjunction with latest generation mobile telecommunications will drive the digital economy

• Aim to deliver - Productivity - Connectivity – Mobility•Vast majority of Nigerians carry out online

transactions via mobile devices making frequency spectrum critical

•Spectrum is critical mobile infrastructure•The trend world wide is transactions and other

interactions between business entities and consumers and potential consumers are going online and mobile

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National Broadband Infrastructure Initiatives

• Accelerated rollout of Metropolitan Area Fibre Infrastructures across the country• To address last mile challenges to businesses,

homes, telecommunications sites etc• Instituting price caps and price floors for

wholesale broadband capacity• Instituting an open access framework for access to

broadband infrastructure• Licensing several Retail Service Providers to

encourage innovation, choice and improved service delivery

• Licensing additional spectrum for wireless broadband

• Effective compliance monitoring and enforcement frameworks

• Clear regulatory frameworks to encourage investment and effective industry operation

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Conclusion

Conclusion• Effective E-commerce ecosystem requires pervasive

telecommunications and broadband infrastructure deployment• Mobile broadband demand growth strong and prices falling• Mobile economic contribution – direct and indirect – Access• Mobile Broadband – productivity enabling technology• Global and local demand for mobile broadband on the rise• Technology pathway – speed and capacity evolution • New spectrum allocations – critical future infrastructure• With further technological advancements and international

standardization, average terminal device price will keep falling

• Content is crucial is driving broadband adoption• Optimal deployment of broadband infrastructures in the face

of falling ARPU’s critical to driving broadband availability and affordability as well as effective support for the E-commerce ecosystem

Thank YouDr. Eugene JuwahNigerian Communications Commission