- Says VAS operators crave policy change to ease pains
WALE OWOEYE is managing director/CEO, Cedarview Communications Limited, a fast growing ICT firm based in Lagos State, Nigeria, but with presence in Port Harcourt and Abuja. The company also maintains strategic alliances in Asia, Europe and the US. In this interview with business a.m.’s OMOBAYO AZEEZ, he spoke about his concerns over specific plights of VAS operators in the telecoms industry, as well as the general telecoms space in the country. He, however, offers some ray of hope of a better future anchored on tech innovations, just as Cedarview has been deploying to weather the storms in the country’s harsh operating environment. EXCERPTS:
Cedarview belongs to the category of Value Added Service (VAS) operators, what is the current position of the VAS segment in the Nigerian telecoms market?
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Well, I must say this is a very good question because I also double as the VAS coordinator for the Association of Telecommunications Companies of Nigeria (ATCON). VAS, at the moment, is at one of its lowest points, primarily because of a policy that came out of certain understandings and the policy around Do Not Disturb, which has allowed the sector to be
negatively impacted. But for Cedarview as a VAS operator, we have tried to redefine ourselves. Cedarview came from the background of a system aggregator, and gradually went into forward integration as well as offering VAS to the Nigerian market and the global space as a whole. So, our category is around special numbering services. As we came into the market, we started doing this with a very innovative product around video and audio conferencing. We also came in with world number dial, meaning that people are able to reach their loved ones, business partners conveniently over a reliable voice service which is one of the offerings we are bringing to the market as well. Beyond that, we also offer toll vanity number service in which you get a number that can be easily remembered and that can be attractive to your customers. Those are the services that we offer. We are quite dynamic in our understanding and approach to the market and we believe the offerings are spot-on. Enterprise customers that have taken it are delighted about it because it is built on robust technologies; it is built on IP technology which is the future.
You just briefly mentioned challenges facing the VAS market, what is the current situation of the market, particularly regarding the DND initiative introduced by the regulator, the Nigerian Communications Commission, NCC?
We have had series of meetings and we must give it to the regulator. In all fairness, the NCC has been a listening one. Time and time again, they have organised forums, whereby VAS operators would come and share their pains, their concerns and also say what we think is needed for our growth. So, the regulator has been listening to it and even at the moment, sometimes next week [this week], there is supposed to be another meeting, an intergroup working meeting whereby these issues are going to be fully looked into again, and certain propositions are going to be evaluated. But we want to see the full outcome. We want to say that “let’s do this quickly and faster.” The VAS sector contributes about 15 per cent of the total revenue of the telephony sector and this runs into billions of naira in a year but that has declined significantly. Our members lose an average of revenue of N100 million per day. A lot of our members are hurting. It is pretty much difficult for us to fulfil our basic obligations of business let alone expansion. It is an area that we need to work out, and we must do this side by side with the government.
The level of QoS in the Nigerian telecoms sector seem unsatisfactory based on certain KPIs, what is the way forward to have it better and what policy do you think will be necessary to achieve this?
Quality of service largely depends on a number of elements and these elements are not wholly within the control of the operators. We all know in Nigeria that we have infrastructural gap and deficit in the country and this can pretty much limit us to get from where we are to where we want to be. Currently, the country sets a target to attain 70 per cent broadband penetration in the next five years. We achieved the initial 30 per cent penetration target under the leadership of the current executive vice chairman of the Nigerian Communications Commission, Professor Umaru Danbatta. Despite this, we have a lot of other issues that must be addressed to improve quality of service in the sector. Critical National Infrastructure for the telecoms industry is still there. Telecoms infrastructure in the country has to be protected. Time and time again, fibre optic cable that is deployed by operators to improve connectivity is cut in the process of constructing roads, right of ways is not easily gotten, and in the midst of all these, applications are becoming more and more data hungry and there is a requirement for bandwidth. Many of the networks run a 100GB IP RAM, and because we want to do 4G, we want to stream, we want to do services online, when all these cannot be put on microwave, so we need the fibre. And if anytime we do the fibre, it is cut or destroyed time and time again, and you have to fix and start to think about multiple redundancies here and there, all these affect the amount of money that is available for expansion and scaling up of the quality of service. Again, you go to base station sites and realize that there are a lot of thefts there – diesel theft, battery theft, and so on – those things have to be paid for again. Operators will have to raise fund to replace all these stolen items again. When we keep battling with same things, yet there is a lot more to be done, the QoS will be affected. So, the governments, at various levels should come in to do the needful in these areas.
What roles do operators need to play in achieving this?
On our part as operators, we need to be more forward-looking and bet on the future of our economy. Nigeria is the largest economy in Africa. Now, the implementation of African Continental Free Trade Area (AfCTA) agreement is coming and it is going to be one very big African telecoms market and we want to also invest some more in this space and be able to raise fund and put it back here. Telecom has been able to raise over $500 billion into this country over a span of about 20 years. We need more of that to be able to get to where we want from where we are. But now people are shifting focus; they are looking for quick wins. But for telecoms and for players, we need not look for quick gains; we have to be longer in the battle and when we wait some more on this market, I believe so strongly that the return would pay off. So, we should not draw back based on certain limiting factors now, but continue to improve the capacity of our networks and the quality of service. I mean, improve the bandwidth and we will be able to deliver more to the market. So, I believe it is on both sides of the regulator and the operators that certain efforts have to be made.
What is your assessment of the Nigerian operating environment for operators such as Cedarview?
Truth be told, the Nigerian environment is what it is. Every market has its own peculiarities. To borrow money in Nigeria, you are looking at about 30 per cent interest rate. At the moment, telecoms companies cannot access foreign exchange. At the moment, you have multiple taxations with different agencies and more taxes are coming. And again, we say to ourselves that we need to also invest and also grow the telecoms space. These, with the reality on ground, look counter-intuitive. Things are not in alignment. However, we also understand that the Nigerian market is dynamic. Nigerian market rewards diligent. Nigerian market rewards innovation. The Nigerian market rewards players that are consistence. And yes! The Nigerian market is huge – the largest population in Africa. Coupled with all of that, the operating environment is harsh. But all the same, I think the rewards are also encouraging for those that are ready to walk the talk. This is not something that is instantaneous because it takes some while for the market to trust you, but once they do, you can always bank on that loyalty for years to come.
In the midst of all these, what has the journey been like for Cedarview Communications?
Cedarview has been everything – ups and downs; downs and ups. When we started about 10 years ago, it came on the back of the fact that I have always been an engineer. What I mean by this is that I read electrical electronic engineering at Obafemi Awolowo University. I worked as a telecoms engineer right from 1999 and I used to work with the network operators at some points. I used to work with V-Mobile in those days, MTN, Ericson and Huawei. In fact, I was one of first 10 engineers employed by Huawei in Nigeria. So, when we started Cedarview, we came in to the market as a system integrator. We worked a lot behind the scene and we worked a lot for the operators: MainOne, Globacom, Airtel and others. Now, Cedarview still does that but as we do that, we are also offering services to the enterprises and because we are able to bring in more forward-looking applications and solutions into the present, that is why we are able to do video and audio conferencing on demand. And one of the ways we have gone about it is that we are able to deliver fantastic solutions at “ridiculous prices” because of the setups. We are lean and efficient and that is why the networks have always enjoyed our services. There are certain things out there in the market that are been driven by us. There was a particular time when certain network equipment had to be ordered from Europe and we got some partners from Asia to do it for a fraction of the price. There was a time we introduced cheaper radios into the market and with this, some operators were able to compete with the bigger players. So, we drive a lot of innovations, we drive a lot of R&Ds, and we drive a lot of strategic alliances. As we speak, we have partners in Europe, Asia and even in the US; and we are able to take technologies that are not readily available here in the market and bring them home for the benefit of enterprise.
Recently, there have been discussions around e-government in Nigeria. How do the operators perceive this and what parties do you think the government should work with if this must be achieved?
I believe the dream of e-government in Nigeria is achievable and it is in fact something we need. Yes, we now have a new minister, Dr. Ali Isa Pantami. We had a meeting with him about two week ago, and one of the things I had in mind to ask at the meeting which he actually addressed even without asking was why we are adding digital economy to the Ministry of Communications. And we are so sure about the minister’s intention to signal to the government and to the population that we have to go smart. There is going to be a national strategy on digitalization which is going to be championed by the ministry of communications and digital economy. That for us shows that from a top level, the government understands that the world has changed and technology is an enabler. It will enable health services. It will enable agriculture. It will enable social services and will enable a lot of other things. And once there is a direction from above to see that digital economy is the focus of the government, in no time, people are going to start to tow the line. Many states do not have digital strategy. Many states do not even have functional websites. Where do we start from? We have to start from where it starts and it starts from the top. Once the federal minister has been able to signal that that is the way to go, it behooves on us players and other officials to know that once the direction has been set, it is just for us to fall in line. So, it is just the beginning that shows that we understand what the future should be and we have to make serious effort to achieve that.
In addition, beyond the name of the ministry that has changed, we also want to see the strategy and to see it broken down into things that are tangible, things that are measurable, things that are delivered upon and things that trickle down all the arms of the government. Today, a lot of corruption and a lot of inefficiencies thrive on the way we work manually…manual file movement. Look at the achievement that has been recorded so far with Treasury Single Account (TSA). The TSA is just a tip of the iceberg as far as e-government and e-governance are concerned, but it is an eye opener. When the TSA came, the government saw the amount of funds that it had realize just by one singular action enabled by technology. How many other TSAs can we do at the local government or at the state levels? Those are the things that technology would bring onboard. Today we could do e-medicine and there are rural people that need access to health services. Yet, it might not be easy to get a doctor there but usually, you will have a nurse that can be guided. You can have smaller doctor there and all he will need to do is simple consultations and those are the things that are possible with e-government. The government has tried but we still need a lot more than bite; we need to be able to see this in the ways that are tangible. And for me, I would want to see that Dr. Pantami, at the end of four years, is able to bring these to bear. I was in Kenya about three years ago and pretty much all government services were done online and Nigeria is the giant of Africa.
With the dynamic nature of the industry in which you play, where do you intend to take Cedarview?
At Cedarview, we have ambition to be among the top five leading technology houses in Africa that people would be turning to. And the AfCFTA is just a boost for us in that direction. At the moment, we are building a platform that is Africa-centric. The audio conferencing platform is non-rivalled, especially within Africa. So we have people coming on the App with local numbers in Nigeria, via local numbers in Benin Republic, via local numbers in Kenya, Zimbabwe, and other countries. We are collaborating with operators to deliver the best experience because business must go on and people must communicate. We are building a platform for that to happen. Beyond that as well, we are also going to make sure that we deliver to people what we believe to be technology experience and performance for price. Gone are the days when you would have to pay an arm and a leg for something that is far cheaper than that. So, for us, the experience would be that we are going to touch every household with certain forms of technology that would enable them to have better lives and that is our vision. In 2026, we would have gotten there; and even before that, you would have started to see Cedarview from next year in a new light. We are going to be more frontal, more open, and more accessible because we use to work from the background, but now, we are coming forward to show forth what we can do as an enabler.
I believe all these will be of benefit to the youths. I am saying this with certain sense of modesty. Cedarview has been able to lift some youths. For example, four engineers that worked for us now work in Germany. This is because we were able to see talent and nurtured them. For me, that is the greatest joy and gratification I could ever get – to see that Nigerian youths are able to play anywhere and at any level. Cedarview is going to make sure that happens continuously.
Specifically, I want to lend my voice to youth development. Our greatest joy will be to see people empowered and see them rise to their fullest potentials. It, however, saddens to find out that people that could be something end up not getting there. One of the gentlemen that worked with us said his father gave him a laptop in part one and that literarily changed his life because with that laptop, he got himself into coding. He threw himself at it. This was someone that struggled to get into university. He tried UTME about five times. So, he was about four or five years older than his regular mates. But with that laptop, he is in Germany today. Before Germany, he had worked with Konga. So, I believe there are a lot of other people like that. It then behoves on our government to enable that. That little child hawking on the road, there is an enzyme in him. Meanwhile, it is not just the government that has this role to play; people should rise up to help. That little help could change the whole life. I think we should start to define our successes that way. Our successes would not be in all that we build, but in the lives that we impact.