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Addressing Key Dichotomy In Africa’s Telecom Market With Virtualized 2G



By Christoph Fitih

Africa is taking a giant leap of ‘faith’ when it comes to mobile telecom. The region, where over 50% of the population still has no access to mobile phones, has suddenly seen a flurry of activities among telecom players to launch 5G services.


The service providers have started to conduct trials for the 5G technology, which enables many futuristic use cases, including remote surgery, autonomous driving, Artificial Intelligence, Augmented Reality and Virtual Reality.


Recently, Vodacom — the African arm of Vodafone – announced the launch of Africa’s first commercial 5G network in Lesotho, a tiny landlocked country in southern Africa. The 5G rollout, though, is limited with the services being provided initially to only two corporate entities.


Vodacom has a temporary license for 5G testing in Africa, while MTN has tied up with Ericsson and ZTE for the launch of services in Africa. Though they have not made much headway beyond public demonstration, 5G seems to be the new area of competition among telecom operators in the continent.

Gaping Digital Divide

One piece of fact, though, should not get lost in the entire buzz around the launch of a commercial 5G services in Africa. And the point is that Africa continues to remain an under-penetrated telecom market, and the majority of its ‘connected’ population still uses the basic services.


This is true for Nigeria as well. The Nigerian telecom industry contributed 9.8% to the country’s Gross Domestic Product in 2016. At the end of 2017, the country boasted of 136.49 million mobile subscribers. It is also one of the fastest growing telecom markets in Africa. Even so, nearly 30% of the population is still to experience connectivity. The telecom industry has contributed immensely to Nigeria’s economy and has had huge impact on the lives of the country’s citizens. A case in point is the growing usage of mobile banks, which has made it easier for people to access banking services anytime and from anywhere. This is not different from the rest of Africa.


Look at the figures for yourself. Africa continues to be the region with the largest number of unconnected in the world. Globally 3.4 billion people are without internet access, and 830 million out of these live in Africa. Similarly, 660 million people in Africa out of 870 million globally, are without a mobile connection. Nearly 70% of the African population does not have access to mobile broadband.


Nigeria, like Africa, still remains largely a 2G market with over 50% mobile subscribers using 2G network. At the same time, the gradual shift towards better network technology is happening fast. According to GSMA’s recent report on Mobile Economy 2017: Sub-Saharan Africa, 3G will remain the dominant mobile broadband technology for the foreseeable future, but the 4G adoption is rising rapidly following increasing network rollout.


However, 5G making a meaningful contribution still remains a pie in the sky. The latest Ericsson Mobility Report shows that the Middle East and Africa would be one of the regions with the least — less than 5% of the continents entire population — subscriptions for 5G by 2023.


It is, therefore, not hard to see that the telecom companies are unsure whether they should invest in connecting the unconnected or start preparing the networks for 5G. This is not an easy decision considering the low ARPU and low adoption of the smartphone in the region. The market is not yet mature for 4G or 5G, but the service providers would want to secure their investments for future technologies as well.


The Virtualization Push

Virtualization can help the telecom sector tide over the dilemma – whether to concentrate on strengthening the basic infrastructure to address the digital divide or to focus on the roll-out of 5G.


Traditional telecom networks require several high-cost and often bulky equipment to deploy and operate. These types of equipment need large spaces to store, have a short life cycle and consume energy. Besides, hardware-based networks are difficult to upgrade. By shifting networks to virtual systems, telecom operators can overcome all these problems.


Telecom companies in Africa can, therefore, achieve multiple goals by shifting their 2G networks to virtualized networks.


Unlike the legacy 2G, the virtualized 2G is easy to deploy, maintain and upgrade to newer technologies. This means that the telcos will be able to address the current demands of their subscribers and can easily and quickly move to any new technology, be it 3G, 4G or 5G. Essentially it leads of network simplification by virtualizing different technology network functionalities on one platform. Since the platform is software-based, the upgradation itself is easy and doesn’t even require a visit from site engineer.

The installation and maintenance of Virtualized 2G is automated, which makes it easy to deploy and also brings down the capital and operational expenditure for the service providers. It makes the network agile, flexible and easy to scale. The service providers will be able to expand quickly and also launch newer services faster. Virtualized 2G reduced the expenditure at every stage, from deployment, maintenance, and upgradation. With Virtualized 2G the network is future ready even as you cost effectively meet the current requirements of your subscribers.


Lower cost, easy deployment, and easy upgradation allow operators to keep building 2G low-cost capacities in areas untouched by telecom network, while at the same time continuing to allocate resources and time in expanding their 4G LTE and 5G networks.


Reliable and affordable broadband is crucial for the growth of the region’s economy. It leads to a more inclusive society, enhanced collaboration and opens up a plethora of global opportunities for the local businesses. Besides it encourages entrepreneurship and leads to generation of more and newer jobs. Nigerian economy stands to gain enormously if the service providers leverage virtualized 2G to push for expansion of connectivity in all regions and segment of the country.


Christoph Fitih is Director Sales – Africa, Parallel Wireless

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

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Forfeiture Claim on Airtel Shares False- Subsidiary of Ecobank Group



O&O Networks Limited, Special purpose vehicle owned by the Ecobank Group has said that contrary to certain media reports, there is no forfeiture order of the Federal High Court of Nigeria in its proceedings that is directed against Ecobank Transnational Incorporate (ETI) or Ecobank Nigeria Limited.


O&O Networks Limited is defending long-standing proceedings in the Federal High Court relating to its ownership of shares in Airtel Networks Limited that were once owned by it.


The company previously owned by Oceanic Bank, formed part of Ecobank Transnational Incorporated’s (ETI) in 2011 after the acquisition of Oceanic Bank. Legal proceedings were first initiated against O&O Networks Ltd in December 2006 by Broad Communications Ltd (“plaintiff”), in the Federal High Court of Nigeria.


A statement released by O&O Networks, pointed out that there is no forfeiture order of the Federal High Court of Nigeria in these proceedings that is directed against ETI or Ecobank Nigeria Limited.


According to the statement, there have been no material legal developments in the plaintiff’s substantive claim for monetary compensation since 2017, though a trial date on the substantive merits was recently fixed for May 28, 2019.


The statement reads: “Contrary to certain press reports, there is no forfeiture order of the Federal High Court of Nigeria in these proceedings that is directed against ETI or Ecobank Nigeria Limited, and neither ETI nor Ecobank Nigeria Limited has made or is required by law to make any payment to the Federal High Court of Nigeria in relation to this long-standing litigation. There have been no material legal developments in the plaintiff’s substantive claim for monetary compensation since 2017.


“In 2006, the plaintiff’s claim was grounded on an alleged right of first refusal over shares in Airtel Networks Limited that O&O Networks owned. The plaintiff claimed ownership of the Airtel shares based on its right of first refusal. In 2017, the plaintiff amended its claim to seek monetary compensation of USD equivalent of Naira 10 billion (approximately US$28 million) in place of its claim of ownership of the Airtel share.


” Since the matter was filed in 2006, it has not proceeded to trial on the substantive merits of the claim to date though a trial date on the substantive merits was recently fixed for May 28, 2019.


“In August 2018, O & O Networks sold its shares in Airtel Networks Limited for Naira 22.5 billion (approximately US$62.5 million) with the permission of the Federal High Court on 7 June 2018 and subsequently in September 2018, the plaintiff filed an interlocutory application requesting the Federal High Court of Nigeria to grant an order directing O&O Networks to place Naira 22.5 billion (approximately US$62 million) – the entire proceeds of the sale of the Airtel shares and an amount which is significantly in excess of the plaintiff’s total monetary claim – into an escrow account in the name of the Chief Registrar of the court, pending the final determination of the substantive claim. The Federal High Court of Nigeria granted the plaintiff’s interlocutory application on 7 March, 2019.


“O&O Networks has filed a notice of appeal and an application for stay of execution to this ruling. O&O Network’s appeal to the interlocutory order is currently pending, and it intends to prosecute the appeal vigorously.


“O & O Networks Limited believes the substantive claim of the plaintiff is without merit and will continue to vigorously defend all proceedings – interlocutory and substantive – in relation to the plaintiff’s long-standing claim.”


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Otunuga Tasks Buhari on Economic Growth



Lukman Otunuga, a research analyst at Forex Time, an award-winning international forex broker, has urged President Muhammadu Buhari to use this new four years given to him to bring about change that will elevate Nigeria to the world stage.


Speaking at a media briefing in Lagos, Otunuga said “now that the current government has secured another four years, it does suggests continuity and what I’ll be looking for is if in this four years we could see change that will be able to quickly elevate Nigeria to the world stage”.


According to him, “now that that Presidential Buhari has secured another four years in office, will he use these four years to elevate Nigeria higher?


“So that’s the main thing I’m looking forward to right now, the current government has secured another four years, this does suggest continuity and what I’ll be looking for is if in this four years we could see change that will be able to quickly elevator Nigeria to the world stage.”


Giving insight to key factors that is going to driving global markets and impact on the Nigerian economy, Otunuga said that although US-China trade developments is not happening in Nigeria but the outcome will have significant impact the Nigerian economy.


He noted that any breakdown in the ongoing negotiations between US-China would create risk aversion for emerging markets like Nigeria.


“US-China trade developments, although it’s not happening in Nigeria but will have a significant impact on  the Nigerian economy.


“Yes there’s a sense of optimism right now over United States and China securing their trade bill but we’ve seen this many times where both nations are very close to securing something but at the last minute everything seems to fall apart.


“Now if this happens again this would create risk aversion and risk aversion is nectar for emerging markets and Nigeria is an emerging market.


“We’ve already seen that the US China trade developments have already impacted both the United States and China


Speaking about other geopolitical risk factors that could have significant impact on Nigerian economy, Otunuga said that “although Brexit when we look at it on the surface, may look like it may not have any impact in Nigeria but looking deeper into the matter and you will realize that some FDI’s from the UK actually comes to Nigeria so if UK exits out of the European Union it naturally will negatively impact foreign direct investment from the UK to Nigeria.




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Court Faults Bharti Airtel Purchase of Airtel Nigeria Shares from Ecobank



Federal High Court in Lagos has ruled that Bharti Airtel’s purchase of Airtel Nigeria shares from Ecobank in 2018 was contemptuous and amounted to a flagrant disobedience of a court order.


The said shares have been the main issue in the protracted dispute between Dr. Oba Otudeko and O & O Networks Limited (a Special Purpose Vehicle owned by Ecobank Transnational Incorporated) and were indeed subject to an order of the court in 2015 that prohibited parties from transferring or selling the shares.


However, in deliberate disregard of the order, Bharti Airtel purchased the shares from O & O and being previously aware of the dispute and court orders on these shares, extracted an indemnity from O & O against exposure to any liability. In the ruling, the Federal High Court also ordered O & O to pay the sum of N22.5Billion, being the proceeds of the wrongful sale of the shares into the Court’s account.


It would be recalled that Dr. Oba Otudeko and Broad Communications Ltd, had instituted a legal action in 2006 challenging Delta State Government’s acquisition of O & O network’s shares in Airtel Networks (formerly Econet Wireless Nigeria).


From the facts of the case, Broad Communication’s main contention is that the transaction was unlawful, and a breach of the Shareholders’ Agreement executed by the shareholders of Airtel Networks.


According to the said Shareholder’s Agreement, the shares should have been offered to the existing shareholders first, before they were sold to Delta State Government given the right of “First Refusal” (pre-emptive right). Following the institution of the suit, O & O Networks purportedly bought back the disputed shares from Delta State Government.


Beneficial ownership of the Airtel shares was subsequently transferred to Oceanic Bank, which is now owned by Ecobank Transnational Incorporated. In 2015, following the receipt of information that the disputed shares were being offered for sale, Broad Communications published a “Buyer Beware” notice on the disputed shares. In February 2015, Justice Tsoho of the Federal High Court, Lagos also gave an order in favour of Broad Communications restraining all parties from dealing or tampering with the shares in the custody of Ecobank.


The recent ruling seeks to return parties to the status quo and underscores the sanctity of court orders which must be obeyed. Indeed, the judge in her ruling stated that “no matter how stupid the order of court is, it must be obeyed until set aside by the court or a superior court…”


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