Every state capital needs two data centers – MD, Medallion Communications


The Chief Executive Officer, Medallion Communications Limited, Mr. Ikechukwu Nnaman in this interview with Kayode Tokede and Idris Bakare speaks on increased data centers that tend to drive telecommunication quality service to end-users.  He speaks on other Information Communication Technology (ICT)

How has the ICT sector developed in the last 18 years?  

The 18th year in the ICT space has witnessed much improvement and not just in telecommunication but in the totality of the sector when compared to what has happened in the pre-2000 in terms of the subscriber base and people that have access to telecom and ICT services.

Using Nigeria Communications Commission (NCC) as the yardstick, Nigeria’s population stands at over 160 million people that is today on the network and 95 to 99 per cent are on mobile this means telecommunication cuts across all sectors of the population both young and old.

Children now have access to phone given to them by their parents to keep in touch with them. So, you notice that has been one major area which is availability of telecom services to the population.

Before, we were looking at 400 to 500 total subscriber bases but runs over hundreds of millions.

Beyond availability, we look at the services. Nobody will say today that we have not had improvement in all sectors, be it in the financial sector, industry, others.

Everybody is today enjoying better services and thanks to ICT and telecom infrastructure.

The National Bureau of Statistics (NBS) reported that the ICT sector recorded 1.81 per cent, is that contributing enough to the GDP?

One can’t say it is enough because it is still a growing space and economy is still revolving. The figure will keep changing from time to time.

The truth is it will be wrong to start doing quarter by quarter, year by year or sector by sector comparism.

Overtime, what the country is trying to do rightly is to move the economy away from single dependence on Oil & Gas to other sectors. Oil sector has been the major contributor but other sectors need to be developed.

It is not a case of trying to say what telecom has contributed to the GDP, the truth is if you check a lot of other countries that have predominantly focused on oil, they are all shifting away to other service-based industry because as technology evolves and alternative energy resources come into play, then, other sectors need to grow in order to remain relevant in the global scheme of things which our country has no option than to do the same.

So, I would look at it more from the angle of relevance we must be in the next few years.

Has the ICT witnessed FG’s ease of doing business in terms of multiple taxes?

The ease of doing business is still on work in progress. Government has a lot of initiative.

There are plans that have gone toward that but we can’t in all sincerity say that it has become easy. There are still some challenges facing the industry such as issue of right of way, delay in approval of license that has got to do with infrastructure that governments supposed to provide.  All in all, I see the government’s ease of doing business in the ICT sector work in progress.

As a major player in the ICT Industry, if you are to advise the federal government on a particular issue or policy, what is that going to be?

I will ask them to look at ICT as critical development tool, what I mean is that government should look at Technology service providers as partner in progress.

What you need to do with your partner in progress is to make life easy for your partner, because you share a common objective and in this case, we are not seeking that.

Government is looking at technology providers as a revenue source, so they want to maximize the revenue they want to generate from telecom providers.

Federal, state and local governments are always looking at how much levy they can charge those in the ICT sector, massing out our profit. Mind you, they do not providing for the basic necessities that will make that operator generate the revenue you want to make out.

So I would like to encourage the government to change the mindset and look at the development that comes to the citizens.

If you have an efficient ICT infrastructure in the country, there are benefits for everybody but private sector people have decided to keep the investment to generate these benefits. Why not work together to ensure that objective rather than taking a position of overcharging.

Looking at the improvement in the ICT sector, why is it that some companies in Nigeria do not host their data locally?

The reason initially was based on lack of availability of infrastructure, which was the reason we said that has been taken over by companies like Medallion Communication providing world class data center. So, nobody can say there is no facility to host locally. The second reason has been the issue of operating cost.

Our operating cost here is more than what is obtainable outside.  So sometimes you may think is cheaper to host outside than here but that is also changing drastically.

What has been the challenge in accessing foreign exchange?

Over the last one year, there has been stability in the exchange rate. Before then, it was a nightmare because we have various exchange rates.

So, it was very difficult to trade and then you do a transaction when Dollar was N300 within a month, it depreciates to N400. By the time you even try to implement it, the cost has changed from what is originally in your business plan.

Lately, we have seen some element of stability over the last one year, that has made it a lot easier to get things in place.

Foreign exchange is no longer an issue as it was before, even if you decided to go to the parallel market, to seek your exchange rate, the differential is not that much compared to the official rate.

There are many issues in the ICT sector such has Right of Way, Lack of Infrastructure. So let take a look at lack of regulation of OTT service and Money service, what do these challenges mean to Telecom Operators?

Nothing!. The truth of the matter is Over- The-Top services (OTT) is one of the services that drive operators’ revenue in the data sector.

The truth of the matter is that when you ask any operators, their data revenue has increased significantly over the last few years and that has been the help of OTT service.

Let be realistic, OTT service has helped in improving the data revenue in the ICT sector and nothing stops any of the operators from developing their OTT service to their subscribers.

You can’t kill innovation just because you are intellectually lazy, that is the way I look at that.

What has been the challenges the interconnect housing are facing in the industry?

The challenge Interconnect operators have been facing is what we called Nigeria factor. That has got to do with people not ready to allow third party to offer transparent services across board.

The bigger challenge we faced in the past was when the dominant operators feel that the service we offer would make smaller operators give them challenge to do well and they didn’t appreciate the transparency and equilibrium we try to create.

A new player comes in, it will take one year to establish interconnect with other existing operators. They will frustrate new operators; look for reasons not to grant you interconnection. Now we have eliminated that.

We notice that a number of the bigger operators do not like that. They try to put restrictions on some of these issues such as in the area of capacity where you cannot terminate calls as much on their network.

There have been some cases of interconnect debt over the time, what can you say on this?

The reason is that as at today 91 or 95 per cent of the traffic is still exchanged directly among the operators and more than 95per cent of the debt is still among the operators, so it just what it is.

We are pushing that as they push more traffic and create more enabling environment for clearing is as efficient as it ought to be, that will go down, that has not been left.

What we are suffering now and we continue to suffer as a direct result of that. Until that is fixed the industry will stop facing that situation.

How do you plan in fixing that?

It is simple. We have discussed that with the regulator, they simply have to create a policy statement where all traffic is channelled to clearing houses than through the peer-to-peer connection. It’s a simple thing to fix if the regulator wants to do that.

Do you think that delay in payment can undermine quality of network service in the industry?

It does undermine it because what happened most time is that operators, use that as a means to deny access to their network which causes drop in calls and when calls are dropped at the switch, subscribers are the ones suffering because the calls are not terminated and that is what we call poor quality service.

Why it is that customer calls not answered at the receiving end are paid for?

It is totally wrong for telecom operators to charge on calls not answered. Any operator that does that is committing fraud. The policy is that you are supposed not to be charged for calls that were not answered. If it does happened, it is fraud and if the regulator is aware, that operator is expected to be charged.

What is the future of ICT in Nigeria?

The future is very bright. New services are coming up. People are talking about internet where everything is about networking and interfacing digitally. Some of these things, we don’t have control over. We are only trying to adopt global trends.

What is your company planning in the remaining quarter of this year?

We are growing infrastructure. Our data centre is the most collated data facility in the country and sub-region. We have continued to promote local contents, connectivity at all layers.

We are planning to build more data centers across the country which is what we have spent most of our time working on.

Your plans in the next 5-10 years?

Am a believer that every state capital in this country needs to have nothing less than two data centers to get the right quality of services. Nigeria right now has less that 10 data centers and 90 per cent is within Lagos, Port Harcourt and Abuja. The rest of the states in the country have nothing. It boils down to challenges Nigeria is having in terms of quality service. This is infrastructure you need to get the right quality service.

We are working in creating one in each geo-political zone.


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