The MD/CEO of Nigeria Communication Satellite Company [NIGCOMSAT], Abimbola Alale clarified misconception between the company and Internet Service Providers [ISPs]. Excerpt.
What is the present position of NIGCOMSAT?
We’ve been able to grow the company to be commercially ready because it’s not easy coming from a full dependent company to standing on your own. In the past four years, that’s what we’ve been dealing with. We have been trying to change our orientation, preparing ourselves for competition because the satellite industry is a very tough business, though rewarding. Because you have a lot of competing technologies that are doing almost the same thing that we do. For instance, you have the wimax, GSM, fibre technology, cable and wireless. You have different technologies that are competing and trying to do the same thing.
So what is your strategy?
We’re trying to fit ourselves into the convergence because what we are selling now is converged service. Almost all the technologies can do everything. What we’re doing is converge. We bring everything even though our core is satellite. We use satellite to deliver solutions because we must use satellite especially in a country like Nigeria and Africa where we have most resident lives in remote areas less than 35% of the people reside in the urban areas, over 65% reside in the rural areas. We can’t exclude them from financial and digital plan.
The world is moving very fast. The fastest way you can integrate people from the rural areas is to use the satellite and so the company has been very busy pursuing the national broadband plan of the ministry because the Ministry of Communications and other ministries have national broadband plan. So we are looking at the dark areas where the fibres can’t reach because every technology has its own challenges. Where the fibre can’t reach, we have to use satellite.
We complement each other in order to make government function well and for government to be seen as performing its duties to the people. We try to do all those things, and we work with the private sector, the ISPs to take those services to areas where we can’t go because we are the offspring. The ISPs are the ones in the downstream marketing and let me correct the illusion that NIGCOMSAT competes with the ISPs. We do not compete with our ISPs. What we do is to market them.
How do you market the ISPs?
We do a lot of marketing for them because we have the knowledge and access to some of the CEOs. We know some of their intervention programmes so that is what we do. We advocate for the ISPs. We don’t provide those services. It is the ISPs that provide the services. But what we’ve been able to do is those people who are working with us are able to catch up on that so we market.
The government has not use satellite. We can’t ignore it. We can’t keep on wasting our money and send money to foreign operators. I’ll give you an example. The Indians and Chinese that signed agreement for backup, they had everything the government compelled. Every operator and everybody who is going to use bandwidth take from the national satellite. I mean most of them now they’re on their second and third satellite now because government took very good steps to say look you must utilize this national infrastructure we’ve provided because satellite is a very critical ICT problem.
So we don’t compete with our customers. We only help them to market and you can see a lot of ISPs. If they’re very fair to us they’ll say they got more contracts in the last three years because we advocated for the use of NIGCOMSAT and local players. Many ISPs now get some of the jobs and every day we receive applications from interested ISPs that want to join our market channel partners. On a daily basis, we get such request. If we’re competing with them I don’t think they’ll come to us.
How do you manage the trust issue?
Initially they had that situation because of trust issue, but we’re trying to overcome that. Last year we gave awards to some of our best performing ISPs. We appreciated them. We want to know their challenges so that we can correct them. It’s part of the meeting we had with them to say that they had problems. People actually recognize that the ISPs are using local service that’s why we had to be marketing not that we’re competing with them. We don’t compete with our ISP’s.
We also realize that you’re into e-government
E-government is broad. E-government means that government has gone electronically. You can’t say we’re into e-government. E-government services are carried out by Galaxy Backbone. We provide Galaxy Backbone with satellite broadband, satellite bandwidth. Even though Galaxy Backbone does both fibre and satellite but Galaxy takes its satellite bandwidth from us. We support e-government services not that we are the ones offering it. So e-government is an application that satellites can do. We’re the offspring. It’s more or less like conveying you. It is like a vehicle that conveys whatever you want us to deliver. We deliver it to where you want us to deliver it. That’s the way we are. We are just a vehicle. It is fixed.
The satellite is a vent pipe. You feed us your information and you say, look, I want Botswana and we deliver for you in Botswana. The application and services belongs to you. We have only helped you to deliver it. I am sure it is very clear now. So anybody that is offering any kind of application that satellite can support, if they come to us, we deliver. We’re like carriers. That doesn’t mean it’s our service. We’re only working for you or working with you to get it delivered.
Could we really say that satellite is indeed a profitable venture?
Technology is moving very fast. I have said it. Convergence is all. I will tell you that there are two ways to look at this for like a country like Nigeria, African nation, a developing nation there are two distant ways that I’ll want to look at profitability, profitability in terms of human capacity developments and then our standing in comity of nations versus the commercial value that you’re talking about. The commercial value is putting it in naira and kobo. It is there but it will be classified as a long term yielding business.
It’s not one of those businesses that you start today and in three years’ time it’s breakthrough. Nobody, not even the internet, not those who operate with 10 satellites can break even in three years. Providing services to different rural areas, is it worth just shunning this people versus I want to make profit alone as a government? It is the responsibility of the government whether you make profit or not to provide your people with service. You must deliver service. So a lot of time when they say we have invested xx amount, you are not reaping this thing a lot of services we’re providing for the government is taken as social. It is a social service because the schools, university that comes to us, some of the ISPs deliver services to the universities, universities will tell them, look we don’t have much money, but we need this internet. Should we ignore them?
So we go to the barest minimum, most of the time we offer such services at just the cost price, but at least they can say government has provided them with an infrastructure that is enabling them to access the internet. Universities in the rural areas that are using the services, some of the Tetfund contractors, they approach us to provide services because Tetfund too also have some initiatives, to provide internet services to some of the institutions that they provide funds to some of their contractors. So we can’t bill them the way we’re going to bill the commercial service.
We know that Tetfund is a grant. When we talk about profitability, no, you have to look at the services you are rendering to the people versus the commercials. In some countries, government just decides, and says, look, I want to provide this as a service. They don’t even ask you. Now, because of the advancement of different application, it’s actually the applications that make the service profitable and then using the new technologies which allows you to do a lot of frequent reviews, and those are the things that bring them profit.