VDT boss calls for increased funding for ISPs
By Ibiyemi Mathew
The Group managing director of VDT Communications, Mr. Biodun Omoniyi has called for increased funding for Internet Service Providers (ISP) in the country.
In an exclusive chat with Nigerian NewsDirect on the challenges hindering the growth of ISPs in Nigeria, the GMD noted that, “We play more in the ISP market and majority of the players are affected by the operations of the bigger players, the MNOs and also there is no adequate protection from the regulator in trying to protect the smaller players.
“In trying to install infrastructures by themselves with their size they will be faced with challenges. Amongst the ISPs, VDT will be mid-sized because we are not as small as that, we’re going towards the top of ISPs.
“What VDT is doing now is that originally we have built some infrastructures but due to the fact we have to provide services to the masses, we need a lot more base stations and point presence because people are many, the expanse of land where they occupy is much.
“Therefore, we are partnering with collocation companies so that we can share infrastructure with those specialists.
“There are challenges, one of which will be cost, having your asset so that your eventual cost at the end of the day if you are a smaller player can reduce.
“In accounting parlance, you are massing capex and you are dispensing it using opex and as our currency is falling, capex continues to rise in value.
“It makes a lot of sense when you want to build those things by yourself when you are a smaller player but the way things are now and the challenges in the environment gives no one any chance if you really want to reach out to the masses than to go to those collocation companies who actually are specialized in this, who will charge you more.
“This brings another challenge because the price of your service will be more expensive than it would have been.
“That is why you see a lot of ISP companies dying out because they could not build their asset base and whatever is there now is operating expenses.
“They need to actually be shelling out money and they’ve not built customers’ base. Things are therefore more difficult for the smaller players.”
Omoniyi while lauding the efforts of the regulator, the Nigerian Communications Commission (NCC) called for increased attention and funding for the smaller ISPs.
According to him, “It has to be a cautious effort and the NCC is aware that many of the small ISPs are dying out.
“When they take the first license, many of them are not able to renew and those who renew are often unable to pay the AOL. They harbour this data and they see the rate of debt. The fact that we want to keep this group must be conscious. Why would they keep them?
“They do that because other economies do it, these small players are also employers of labour and they participate in labour.
“Even in the US which is the headquarter of capitalism in the world, there are smaller players and they’re protected. The government targets them to give incentives and protects them against the bigger ones.
“The NCC recognizes the existence of these challenges against the smaller players which is why it would take a cautious effort to protect them. If we leave it to the free market, then the little players will never survive and they’ll die at a faster rate than we’ve seen in the past,” he said.
