How new sea cables are changing Nigeria’s bandwidth market
By SEGUN ORUAME
It is over a year since two undersea cables landed in Lagos,
arguably, West Africa’s commercial capital and one of the major
business hubs in Africa. The first to land, Main One Cable is
promoted by a number of Nigerian investors with diverse
entrepreneurial background s ranging from the financial to the
technology sector. The CEO of Main One Cable, Ms. Funke Opeke, was
before her new portfolio, the chief technical officer of MTN
Nigeria, the country’s biggest mobile network of over 40 million
subscribers.
Built with over $240 million, ‘the 7000 kilometres fiber optic Main
One Cable runs from Portugal to Nigeria and Ghana, and also branches
out to Morocco, the Canary Islands, Senegal and Ivory Coast.’
Quoting Reuters: “the Main One Cable Company says it delivers more
than ten times the broadband capacity of the South Atlantic Terminal
(SAT-3), Nigeria’s sole existing undersea cable, and 20 times the
entire satellite capacity of sub-Saharan Africa.”
Globacom’s international submarine cable, Glo 1landed at about the
same time as the Main One Cable in what has helped to drive
competition and sweeten broadband access in a market where
connectivity has been largely depended on very costly satellite
infrastructures and the erratic WASC/SAT-3 cable owned by moribund
state owned telco, NITEL Plc.
The 10,000 kilometres Glo-1 undersea cable worth some $800 million
is promoted by Mike Adenuga’s owned Globacom Limited with several
landings in coastal cities across West Africa. Globacom is Nigeria’s
second biggest mobile network with over 30 million subscribers. Its
landing in Lagos in 2010, joined the Main One Cable to expand the
prospects for increased and cheaper bandwidth connectivity access -
the major snag in the take off of several Internet driven services
whether in the health, education and financial sector among several
others.
Crashing cost of access
Since the commercial launch of these two cables, prices of
connectivity have crashed greatly and there is a more robust
delivery of bandwidth like never before helping to drive new level
of services that were once non-existence.
Take the increasingly popular BlackBerry (BB) services offered by
all the four GSM networks. There has been about 45% cut in Internet
cost through the BB window. These also apply to other forms of
Internet access. In the last 10 months, BB tariff has crashed
considerably from about $35 per month to about $20 per month whether
on MTN, Globacom, Airtel or Etisalat network. This has helped to
drive up the popularity of mobile Internet on all smartphones
generally and BB services specifically.
Also, in the last 10 months, as recent research has shown, Nigeria
is the largest market for smartphones and account for over 50% of
all smartphones sales on the continent in the last two quarters.
This, no doubt, is as a result of the crash in Internet tariff.
The existing submarine cables in Nigeria carry an installed capacity
of over 19.2 terabytes and over 340 gigabyte combined, a major
increase in the size of the pipe available to drive bandwidth
depended services. Already, the lower Internet tariff is being felt
in the hinterlands as terrestrial infrastructure companies take
advantage of the increased available bandwidth to install
connectivity pipes and open up once un-served remote locations in
several of Nigeria’s state capitals including Abuja, the country’s
political capital.
BCN Limited, Phase One Limited and Layer 3 Limited – three backbone
connectivity companies with heavy presence in Abuja are already
leveraging on these new opportunities to take connectivity to towns
and cities in northern parts of Nigeria’s vast over 927, 000 square
kilometer landmass. The immediate casualty of this development is
satellite infrastructure providers all of which are foreign based.
Both Glo-1 and Main One Cable are firming up their presence in
Nigeria’s booming Oil & Gas sector, Globacom is using its submarine
cable to serve major oil companies and helping them to lower the
cost of connectivity like never before. “Glo 1 has signed on a
number of major oil companies in the past few months, signaling
increasing preference for the cable as bandwidth provider of choice,
according to a local news publication, the Nigerian Pilot. The list
of customers includes: Shell Petroleum Development Company (SPDC),
Total ELf, Chevron, Agip, Nigeria Liquefied Natural Gas (NLNG),
Exxon Mobil and TransOcean. Hitherto, the major oil companies had to
depend on satellite connectivity for major high-speed international
bandwidth link that connects all their operation centres including
remote locations in the Niger Delta creeks and corporate offices in
Lagos and the United Kingdom.
The soul of connectivity is undersea cables
“New analysis from Frost & Sullivan ‘West African Broadband Market
Tracker’, covering Nigeria, Cameroun and Cote d’Ivoire, finds that
the market earned revenues of $929.9 million in 2009 and estimated
this to reach $1.932 billion in 2016.
“The research stated that Internet Service Providers (ISPs) still
remain the dominant players in the region, except for Nigeria where
mobile broadband connections have outpaced fixed broadband
connections. “In comparison to other countries, high investments are
made in infrastructure development and broadband services present
the highest areas for growth opportunities due to the decline in
voice revenues,” the report said.
“The analysts said these investments [in undersea cables] would
unlock the constraints in the West African telecommunications market
and catalyse the economic potential of the region. They stressed
that a compelling opportunity exists to lower the restrictive cost
of international telecommunications and significantly expand
Internet access via submarine cable, which will lead to greater
efficiency and more competitive business.”
“We see new and expansive growth prospects for ISPs who have to
remodel their business offerings to reflect the new opportunities
and trends,” said Gboyega Ojuri, CEO of Lagos based ISP Junisat.
General Manager of DDC Networks of Computer Warehouse Group, Mr.
Oladipo Raji, says Nigeria needs to step up on capacity utilisation
of the cables. While there are have an exciting uptake of the
privately-owned cable facilities, he sees explosive growth in months
ahead through an expanding window for e-commerce, e-payment;
e-learning, ehealth, e-government and the likes.
Sierra Leone and the coming of fibre sea optic cables
What do all these hold for other West Africa countries? A bounty of
change! Africa is set to experience its own bandwidth glut from
years of bandwidth famine. That is why the expected landing of fibre
optic sea cable in a country like Sierra Leone is bound to change
for good the way business are done. Cost of access will crash and
connectivity will become more readily available. It then means
people who were once unconnected to the global knowledge space will
now be able expeience the unique leapfrogging that only ICT can
bring.
The internet will readily become avaibale in the pocket. Many people
on the streets of Freetown need only have a smartphone to access the
Internet at an affordable rate and experience the transforming power
of ICT in the workplaces, homes, hospital, banks, schools, farmlands
and mining sites. Change is already in the offing for Sierra Leone.
They only need to see what the coming of undersea fibre optic cable
has done to Nigeria in only 12 months to have a taste of what is
about to happen in the land of the Lion Mountains.
