Spectranet committed to deepening Nigeria’s broadband penetration, but highlights obstacles

Management of Spectranet, major internet high speed service provider in Nigeria has re-stated its resolve to assist the country increase its broadband penetration from the present 21 % to over 30 % in line with Nigerian Communication Commission, NCC plan.

As part of  the 8-point agenda conceptualised for comprehensive national economic growth, Nigerian Communication Commission had targeted 30 % broad band penetration in 2018 to boost the economic growth through online shopping, online banking, e-health and e-education.

Spectranet, licensed in 2009 but started operation in 2011 to provide internet service to Nigerians for productivity and economic improvement said it is committed to the NCC goal. It however highlighted challenges on the way to the course.

Recognising that retailers are fuelling growth in various countries with China and India recording over $752 billion and $20billion  value of online trade respectively, and significant growth in other sectors through internet service, the CEO of Spectranet Nigeria, Ajay Awasthi said these milestones could explode in Nigeria if the bottlenecks to increasing broadband penetration are addressed.

Awasthi told BusinessDay recently in Lagos that the remaining ISP providers in Nigeria are at the centre of ensuring increase in broadband penetration in Nigeria like other countries for economic gains but regretted that the sector is burdened by heavy cost of operation.

While price is dipping, cost of operation is growing and this is lopsided situation in any business.  For instance, the CEO said that over 30 % of Spectranet operational cost is on account of tariffs alone and those costs are not coming down. “This is a situation that is not sustainable in business”.

Explaining further, he said “25-30 % of our costs are on tower business alone, another 20% of our costs are on connectivity charges on international and metro lease lines and there is license fee. All put together, almost 2/3 of our costs are beyond our control. All these costs are increasing, leading to a situation which is quite stressful and challenging for ISPs in Nigeria. It is about 30 % of the costs that we can control which are employment and others.”

Further assessing the weighty cost of operation, Awasthi said Spectranet and other ISPs operators are just able to keep their heads above the stormy waters. He said if the Spectranet is able to earn a reasonable profit, then it would expand towards achieving the goal of 30 % broadband penetration.

“Internet is about delivering service in terms of health and education. If internet is disrupted by any challenge then there is a big challenge.

“If you look at the number of licenses, there are probably over 100 but those ones that  survived are few. What is happening is while the prices of data are coming down, the cost structure of the industry which is primarily driven by tower companies is increasing. This is putting great pressures on the ISPs. The cost structure is averse to conducive business environment today. The water level is at the throat of ISPs and we receive no relief today”.

He said decision on the industry needs to be taken fast to achieve such NCC goals.

Awasthi who was speaking with BusinessDay in a chat about the industry also promised that Spectranet would continue to provide high speed broadband service.

“These online shopping consumers need high speed internet connectivity. This he said would guarantee the success of online shopping. “This is where we come in. Once you have high speed broadband, it also gives you flexibility to work from home and avoid the mind boggling traffic. High speed internet, also enhances easy access to education where learning is through online. There are courses now online. This is important because more skill people you have the better for the economy”.

Another areas of focus for Spectranet, he said is bridging the digital divide.  It is said that in Nigeria there are about 94 million customers using internet. There are quite a number of people who are not connected. Once these people get connected to the mainstream economy through the broadband, it will start changing the economy, he said.

Awasthi who said that Spectranet would attempt to double its subscriber base from present 200,000  also assured that his company would also continue  its investment towards providing reliable, affordable and secured network for its consumers as he maintained that customers are the centre of its service.

Daniel Obi