The Group Managing Director, VDT Communications, Biodun Omoniyi speaks with NIGERIAN NEWSDIRECT amid the company’s celebration of 20th anniversary celebration. He speaks on VDT’S foray into retail services and Nigeria’s capacity to achieve the broadband target by 2025.
Since the vision of VDT was birthed 20 years ago, what makes VDT unique to the public?
There are so many things to share with everyone. We are closer to our vision than we were when we started. It is by the grace of God. God has been quiet faithful to us. He has been the one that guides and orders our steps till this day. The unique thing is the joy of being to delight our customers.
At what point in your life did you decide to delve into the business of providing communication services and what has been your driving force?
I will say since I was in the University and that was more than 36 years ago. I studied Engineering and I was the best in my class at the prestigious University of Ilorin.
We were the third set in the Engineering department. In those days, we did not have electrical engineering. What we had was electrical, mechanical and civil or chemical engineering. When you have electrical what comes to mind is power. But the communication people too are mostly electrical engineers. There was the option then.
My own option was communications and computer. It dated back to that time. I did not go for power and electronics. Could this have been the time I decided? Possibly, I underwent my Internship Training with the then NET but when I finished, it was also about the time that electronic computers were coming up.
So my love was to work as a computer engineer. I had a deep understanding and passion for communication. I started as a system integrator. Then, I saw opportunities when computer are being linked up. I naturally gravitated towards that area. When computer stated communicating with themselves, it became a natural source for me. While doing that, I saw that I could build the network itself. I was building network for customers about 4 years before VDT. My communication was not for voice and data.
It was more about making sure that computers talk to each other. That is what we are doing now even with WhatsApp because these phones are more powerful than the computers of those days. I have been living where I started. I made this choice about 36 years ago out of sheer love. So I am doing what I love doing. I saw the opportunities. I had the knowledge, love and then an opportunity presented itself due to the deregulation of the industry. There is nothing new as I just followed the natural progression.
The Federal Government has recently pegged the broadband penetration target at 90% by 2025. What will be the contribution of VDT towards achieving this?
I like the Minister for making that bold statement. If the minister had that commitment, there is going to be a lot of encouragement and investment to get to 90 per cent.
I am imagining, 90 per cent will mean we will all be swimming in broadband. Our plan like I said in the next five years is to further deepen our retail strategy and offering to customers.
This will be done by increasing and expanding the infrastructure that will make it to be available. One of the plans that VDT has now is to let the retail broadband infrastructures follow the enterprise presence.
The enterprise presence like I mentioned is in every state capital of the federation. So in the next five years, we want to make sure that the retail infrastructures follow that as well by making that expansion.
We are going to touch more people, homes and give the service in a qualitative manner. VDT provides services such as enterprise connectivity and corporate internet to all parts of Nigeria via national carrier backbone.
Retail Service; 4G LTE Broadband internet service; SME and APN Services among others. Enterprise is in such a way that you may have one customer but you may have an average of 10 branches for the customer.
Of course I used an average because sometimes you may have a customer who has 200 links with us, then, we have some that have just 2.
Yet they are enterprise. But individuals will actually have a lot more than that and we can cover a lot of people and homes.
This will be part of the 90 per cent that we are talking about. When the minister was talking about 90 per cent, he was not talking about spaces. He was talking about the number of people that are covered and people covered are truly using it.
There is no point saying; we are covered. It needs to be affordable, it needs to be usable and reliable. The services have not been that smooth, voice or data services in the last few years.
We still have issues of drop calls and buffering when you are surfing the internet and some other things. VDT Communications successfully scaled her service infrastructure to 99.9 per cent uptime since 2015.
We now generally guarantee 99.999 per cent service availability through the use of multiple carrier trunks while maintaining low latency that will help Nigeria achieve its broadband penetration target.
Does VDT plan to partner with the Lagos state government broadband wise?
I seem to have a little issue with this because we have seen from our history that government are bad management. If Lagos is laying fibres with a view to commercialise it, it is going to be at an exorbitant price. I know every person will acknowledge that government are bad managers. They have never done anything successfully. They should have remained as co-regulators, making policies to develop the industry. When they want to do project, they would have overbought and then they will be overselling and underdelivering. They have not marketed it to us. I do not know anyone using that service today.
What has been the impact of insecurity and forex on call and data?
Service quality is provided by a lot of things. It is not just about investment. When you invested, was it well implemented? And if it is well implemented, is it constantly on? When you talk about retail service, this means that there is going to be many points where access is given to services. We are not going to be talking about 143 that I mentioned. We are going to be talking about 20000 BTSs that are far from at every corners of the country. Every BTS must have its own infrastructures complete-power, security guards- all those kind of things also affect quality of service. Just a few days ago, one of the major providers said there was going to be a serious effect on their service quality due to insecurity. If you take out one site, there are maybe seven others connected to it. The nature of the GSM service or retail service is such that when the nearest station we are connected to drops in terms of invasion or the generator was stolen or someone bombed the tower itself, what happened is that it tries to go to the next one.
If it doesn’t see the next one, it tries another one. But the farther it goes, the lower the quality of service. If there are gaps, the sales are planned with certain distances in mind. If they are planned in such a way that within 500 meters, you should get service. Now it’s becoming 1 kilometer. So you can’t expect the same kind service quality. When there is a cut to fibres, no protection for critical Infrastructures. If all these things are not protected, they will get down and be damaged. And when this happens, the end effect will be quality being experienced by the end users.
Voice data, nobody talks much about this because when you have data you can as well make voice call. It is the same Infrastructures we are using but some people find a lot more qualitative to use the online voce call.
This tells you that when you have data, you can do voice. The future in this industry is data. This is because with data, you can make calls, you can share data, do your transactions and others, you may not necessarily need to do voice and pay for it. Data itself in terms of growth is accelerating a lot faster than the voice product even for major carriers. We need to have a protected infrastructure to be able to guarantee a high quality service.
When you talk about communication, I hope you know that there are equipments involved. The question now is that how many of these equipments do they manufacture in Nigeria? Zero. We buy all of these equipments in foreign countries.
And when you buy from other countries, you need forex including phones. You cannot expand your network. When company talks about Network expansion, it means they are going to buy more equipment. Meanwhile, they provide service in Naira here. If Naira has been falling, cost to buy those expenses shoot up. Dollar used to be N350, 360 et cetra about one year ago. The Dollar you gather now which you felt will be able to buy three equipments, can only buy you two. The telcoms companies are import dependent. It is affecting the industry badly. The company needs to intentionally promote indigenous manufacturing. Authorities are not having easy access to forex. I do not think anyone has easy access to forex in Nigeria. There is no access anywhere. When you cannot access the forex where do they expect us to get it.?
What about the USPF? Don’t ISPs have access to it?
USPF is more like equalisation fund that we see in petroleum Industry. It is called Universal Service Provision Fund (USPF).
The operators will generally gravitate towards market that has the most profit. Like I said, when you go into the rural areas, there won’t be much profit there. The fund is to make sure that the operators expand into unprofitable market which happens to be those rural areas. They used part of the AON that are paid to build the fund.
There is a particular percentage that goes into the fund from the AON to expand service so that nobody will be left behind. The fund is to push to the rural areas and not to densify service in the metropolis.
There was a cyber cafe program they promoted which we were part of because we were interested in some of those services to the rural areas.
It is not that those things are profitable but because of our commitments to be part of that program. You will see not many bigger operators would want to go in there. If you’re doing your business and you’re successful and profitable, why would you want to take government fund? This is because there is a lot of scrutiny in it. I think it’s a choice and an open field.
How do you intend to compete with the presence of MNOs?
We have been in data all our lives. So if we are doing anything at all, all these qualities that we are talking about should actually do us a lot of good even now that the market is now expanding.
It means that market for data, more people are using data and so the market is expanding. But the problem is that we have been playing more in the enterprise and most enterprises are shrinking. In the recent times, there has not been real expansion in bank branches.
Most people are not expanding. It could be as a result of recession or other factors. But the good thing is that we are also going into retail which is now our focus. But it is also a big market. It is also a good opportunity for us because now we have a growing market.
People are getting more idea of data. I’m strictly talking for VDT not everyone in the industry. We are trying to deepen our presence on the retail side- the individual side. So I say the bigger players that you talked about, we have actually been partnering with them on the retail side.
Almost all the MNOs know us already. It is more of net-out-flow to them. We are more or less partners. We may be small but we are partners with them. In this retail world, we grow a lot by partnering. We do a lot with them, we buy service from them, we partner with them. I do not really see a reason why we should not continue to do that in a growing market. So once we have our expansion, I believe, with roaming coming up, it should be a win, win for all of us.
And you can also do roaming on data. But then again, it will only benefit you when you have your own network. If you do not have your own network, there maybe some ruffling up for such people. And luckily, VDT has its own network.
We have customers that have been with us from day one. This is the same kind of thing that we hope to transfer even onto the retail business.
Once we are able to do that, we will be able to keep customers up to the level of our Network. In expanding, then we can cooperate because it is a big a market even the MNOs cannot serve it all. So we can cooperate with them.
When we do that it’s because we want more than our capacity. We want to leverage on them. They are big brothers. But again, it is not always sweet to eat together when somebody does not bring to the table. When you bring even if it’s small, you will all feel satisfied. But when you do not bring, they can shove you aside. And you cannot complain.
What impact has COVID-19 on VDT and the industry as a whole?
Covid-19 presented us with an opportunity this is because challenges also come with opportunities. The telecoms industry, I think, fared better. This is because when people were held up, they needed to use our telecoms infrastructure.
Though we are used to this before, we used a lot more during the pandemic. Zoom and Skype were in the market before Covid-19, but Covid-19 made their usage shoot up. I will not say that telecoms thrived but they were not too adversely affected. Majority of our own income comes from Enterprise. Enterprises were badly affected. It affected our projection to some extent. Some people may say telecoms thrive but the enterprise section of telecoms did not. Fortunately, the retail side was thriving and our revenue was a bit stable to some extent.
What is the difference between the Enterprise service and SMEs service you offer?
The SMEs service we offer is only produced by us more like a mini version of the enterprise service that we give except that is tailored to an SMEs offering and it is in Gigabit. The APN is a resale service. We are more like a reseller to MNOs, Carriers and Bitrost itself. The APN on the other hand service are SIM activated whereas the SMEs service is not a SIM activated service. It is a mini version of our enterprise service.
What is your average download speed?
It depends!. The enterprise is usually dedicated. We tell customers, you want stable and speed, this is what it is. You are not going to share it with anyone. It is a private network on an enterprise site. On the retail side,is a minimum of 5Mbps. Of course, as we go on in our plan as well as the national broadband plan, within the next 10 or 3 years we will have to take that to a minimum of 10Mbps.\