Jaco Maritz
Posted on: Sun, 16 Mar 2008
Most Nigerians still only have access to the internet through internet cafes.
In 2000 all segments of Nigeria's telecommunications market were opened to competition. While the mobile telephone industry emerged as the sector's star performer, internet delivery has lagged behind. Internet services in Nigeria, especially broadband, are vastly underdeveloped but the industry is slowly starting to up its game.
"The internet landscape in Nigeria is fast changing," says Kanmi Adegbile, assistant project manager at Skannet. "Ten years ago, we did not have the different types of access to the internet that we have today. A public cyber cafe used to be the only access individuals had to the internet. Now there are internet service providers (ISPs) in various shades and sizes, delivering direct access to individuals and businesses on a variety of platforms. CDMA-based providers are upgrading their networks to the more advanced EVDO technology. GSM operators - who were initially reluctant to tap into this area - are now aggressively marketing internet services as part of their offerings. Internet access is fast becoming a commodity item in Nigeria."
While internet provision in Nigeria has gained significant ground in the past years, the situation is far from satisfactory compared to developed nations. "In the G8 countries, the number of people with access to computers and internet is growing at an exponential rate, in many developing countries, the story is not exactly cheering," Ernest Ndukwe, EVC/CEO of the Nigerian Communications Commission said in a speech last year.
Current situation
Reliable statistics on Nigeria are hard to come by, but according to WorldInternetStats, Nigeria had 8 million internet users in September 2007, a 3 million increase from the previous year. While this is the highest number of users in Africa, with a total population estimated to be around 150 million, it only gives the country an internet penetration of 5.3%. Compared to the United States' internet penetration of 71.4% it is clear that Nigeria has its work cut out to make internet accessible to a larger number of its population.
Nigerians connect to the internet in many ways but 53% of connections are made through Very Small Aperture Terminal (VSAT) links. Wireless microwave links account for 19% of internet access and Digital Subscriber Line (DSL) access are estimated to be only 14%. Many of these sessions are through internet cafes as very few Nigerians have their own personal computers. National Bureau of Statistics figures show that in 2006 less than 10% of internet users had access from the workplace and less than 4% from the home. Only 1.3% of the population own personal computers.
Traditional internet service providers are facing increasing competition from internet services offered by mobile operators. The introduction of 3G services has enabled many Nigerians to access the internet through mobile devices.
"There is widespread availability in urban centres, and fairly good availability in smaller towns," says Yomi Adegboye, principal partner at DomainStandard Networks. "The deployment of VSAT-based systems has made this possible. But more so has packet data on GSM networks. With MTN, Celtel, and GloMobile providing GPRS, EDGE, UMTS and HSDPA all across the nation, it is almost amazing to find internet access in some of the most remote locations in the country."
"Last year, I took a road trip from Lagos to Abuja and back. All through the trip I was online, managing my mails and carrying out other tasks – this is in spite of the fact that my route was far removed from urban centres. Most people are unaware of this level of availability, and I hope that the providers will do much more to inform the public. Only then will people begin to take advantage of the enormous potentials present."
Challenges facing the industry
Internet doesn't come cheap in Nigeria. One of the reasons for this is the costs involved in using satellites due to a lack of cable infrastructure. The existing SAT-3/WASC/SAFE cable that links south and west African countries to Europe and Asia no longer has sufficient capacity. Most Internet traffic in Nigeria therefore needs to be routed by satellite via North America and Europe.
High-speed broadband requires fibre optic cables. The situation should, however, improve as there are a number of projects underway to connect African countries with the rest of the world through undersea cables. The Nepad ICT Broadband Infrastructure network, backed by the African Union, will include an undersea cable and a terrestrial network to service landlocked African countries. The World Bank also wants to establish a Regional Communications Infrastructure Network (RCIP). It is estimated that by bringing in optical fibre cables, the cost of internet in Nigeria can be brought down by two thirds.
"The emergence of fibre optic has proven that internet facilities can be made available at a lower price than satellite, so prices can still be lowered to meet up with the competitive demand, but this is only if there can be enhanced local content to take advantage of the fibre networks within the country," says Adegbile.
The general high cost of doing business in Nigeria can also be blamed for exuberant internet fees. Nigeria has a massive shortage of electricity supply and service providers rely heavily on diesel-powered generators. This adds an extra layer of costs for which consumers have to carry the burden. Despite this Adegboye believes that internet costs can be much lower. "It is my firm conviction that the cost of broadband services can still drop significantly. This feeling is shared by other stakeholders in the sector."
There is an overall dissatisfaction amongst Nigerians with the standard of internet available. One of the major gripes is with the speed of services. "Most internet access here is in the form of dial-up," says Adegboye. "The packaged based services running on CDMA1x, EV-Do or UMTS/HSPA are often classified as broadband, but are far from proper broadband."
The services provided by ISPs are also not up to scratch. According to Adegboye "poor internet service delivery can be attributed to a lack of customer service orientation and training of personnel. Recently a customer care officer from one of the GSM networks insisted that a 3G phone, the SonyEricsson P990i, is not a 3G phone and cannot be used with his network’s 3G service – a few days later I used the phone to access 3G services from the very network."
Looking ahead
The sheer size of Nigeria's population allows for much growth in the sector. Investment opportunities lie in areas such as internet access infrastructure; ICT applications for government and educational institutions; Voice over Internet Protocol (VoIP) services; and developing online payment solutions.
Asked for his view of the future of broadband internet in Nigeria, Adegbile responded that "the main problem with internet access in Nigeria is the high cost of access. If only the stakeholders can ensure the reduction in the cost of bandwidth and if ISPs build on their existing infrastructure, broadband in Nigeria would be at affordable to all and internet access would be much more enhanced. As more operators build infrastructure, local content will become affordable, leading to further reduction in prices. It will happen – it is a matter of time."
Sources:
Presentations
1. Promoting internet-based business in Nigeria
2. An overview of evolution of the telecommunication industry in Nigeria and challenges ahead
Research
3. 2007 Nigeria Telecommunications Sector Performance Review
4. Broadband development in Nigeria
5. The regulation of undersea cables and landing stations
Websites
6. http://www.internetworldstats.com/stats.htm
