Telecom
Encouraging Local Content in Telecom for Development
The fact that the country’s telecommunications sector has witnessed tremendous growth over the past eight years of its liberalization is no longer celebrating news, but how to sustain and develop the sector is now the paramount concern of stakeholders in the industry.
One likely area of emphasis in a bid to develop as well as sustain the growth is adoption of local content to replace dominant foreign content in the sector. Local content in telecommunications industry is the use or adoption of locally manufactured material and initiatives in the operation processes of telecommunications service delivery. To many, there are little or nothing that local initiatives can contribute in the telecommunications industry going by the capital intensive nature of the business, they cite instance of mobile handsets which are predominately imported and where there are no known initiative of capacity to develop it locally. More so, core network equipment such as intelligent switches and microwave equipments which are sensitive high technological equipment that will take the country decades to come to terms with, let a lone manufacturing them.
But, unknown to these school of thought, that there are other areas where telecommunications operators are spending huge of the country’s hard earned foreign exchange in import that Nigerians can effective play role in substituting with local initiatives.
Among them are billing software, cyber cables, mast, connectors, switches as well as equipment racks.
Local content policies
Local firms are ultimately and probably the most important driver of economic incomes and growth in developing countries. It has been found that local technology is spreading faster in emerging economies than in rich nations, even though the technology gap remains wide. It also found that technological progress has helped raise incomes in the developing world and reduced the share of people living in poverty from 29 percent in 1990 to 18 percent in 2004.
It has long been recognized that investment in science and technology makes a vital contribution to economic growth in terms of higher growth rate of the economy’s productivity under such conditions; the neglect of R&D in developing countries will have serious repercussion on firms’ ability to absorb and evolve new technologies and participate in their development. This may have long-term implication for the developmental efforts of these countries. But two critical questions arise: one, what were the weaknesses that resulted in the poor performance of technology policies in these countries? And two, what measures should be adopted to plug in the loopholes in these policies to make them more effective in the globalize era?
Local content means the development of local skills, technology transfer, use of local manpower and local manufacturing. It has become an increasingly important issue that could support the federal government to upgrade her manpower capacity, with results that benefit the government, private companies, and the Nigeria’s economy. However, the performance of this mission over the past decade has been a mix of successes and failures. Research performed to improve this performance by identifying the characteristics of successful public to private sector technology transfers identified several critical success factors. These include a "transfer culture" in the government laboratory and Nigerianized organization, shared personnel of the federal and local organizations throughout the transfer project life cycle; the local workforce services could be the major source of employment inside Nigeria economies, accounting for over 50 percent of jobs. Local technology services account for a much larger share of total economic output than either manufacturing or agriculture in this country. Home-grown services are the future of this country, as it is the fastest-growing component of the total GDP, particularly low-income Nigeria.
Nigeria, though embarked to the periodic development planning exercise as early as 1964, failed to realize the importance of private sector and market oriented policy in the process of overall development of the country till late eighties and this resulted to several economic distortions.
Since then, the private sector development policy has been reoriented to identifying and removing the barriers for private investments, and creating private sector friendly economic environment so that the private sector would play pivotal role in the economy. Thus shift in the role of the government from active participant to facilitator not only brought positive psychological change in the private sectors, but also added economic dynamism through the active participation of private sectors in all sectors.
Nigeria provides a classic case of a developing country where despite the presence of a wide institutional infrastructure for producing trained manpower, generating new knowledge and providing science and technology (S&T) services, the industry became increasingly dependent on foreign technologies ever since the economy became liberalized under ex-president Obasanjo’s regime.
In the early 1999’s new democratic government initiated a series of market oriented policy reforms to integrate the economy towards globalization and economic growth. A remarkable progress in terms of growth, investment and employment has been achieved. Private sector led growth was the main thrust of the policy reform initiatives taken during the millennium.
In the field of science and technology, Nigeria presents two completely contradictory faces. On the one hand, foreign observers look upon Nigeria as a bottomless container of S&T talent which in due course of time will, along with China, dominates the global scene in the second half of the 21st century. This perception is based on the success Nigeria has registered in the field of information technology in Nigeria and the achievement of African Americans in the United States. The opposite face is registered at Nigeria’s inability to solve problems of infrastructure, namely roads, power, water supply and sanitation and at the poor state of its schools and colleges. In a bid to meet this target, Nigeria joined other countries in jumpstarting the services negotiation in the local content policy implementation. The Collective Services Requests are aimed at promoting this country’s economic growth, particularly in developing economies, by improving productivity, creating jobs and improving the quality and availability of goods, agriculture and services through oil and gas root-up.
Since the country’s own technological capabilities were limited, the dual trade policy placed a continuous pressure on firms for acquiring foreign technologies. To meet the industry demand, the government encouraged the transfer of foreign technology embodied in capital goods and turnkey plants by assigning low protection to the capital goods industry. Highly restrictive policies were adopted towards FDI and technology licensing. Technical agreements were allowed only in the cases where technical assistance was needed to run the turnkey projects. Capital goods imports were given preference over the alternative modes of technology acquisition for two reasons. Light industries required simple and standardized technologies that could easily be transferred through capital goods imports. It was felt that given the training and entrepreneurship of Koreans, it would be easy to assimilate and adapt foreign technologies embodied in capital goods through reverse engineering at the production end. Though the policy led to massive imports of foreign capital goods and owing to low protection retarded the growth of the local capital goods industries, it did facilitate a rapid acquisition of technology during this phase.
Local content in telecommunications is not all about equipments, human resource is another area of local content. This requires telecommunications companies to employ greater number of Nigerians in their work force. However, trained manpower is not readily available in the industry; this is evident in the high rate of pouching in the industry, where skilled personnel move among organizations that pay high.
Engr. Lanre Ajayi, managing director, Pinet Informatics, acknowledged that there is acute shortage of trained human resources in ICT industry. According to him, any policy that requires a company to use local human resource such policy should ensure that there is enough trained human capacity available in the country. He cited instance of problem of poor quality of service in the GSM space, which he attributed lack of skilled manpower as part of the causes.
This could also be explained as responsible for Nigerian Communications Commission conception of the establishment of ICT training institute in the name of Digital Bridge institute to provide the needed skilled manpower requirement to develop the industry.
Dr. Emmanuel Ekuwem, president, Association Telecommunications Companies of Nigeria (Atcon) said that the industry requires an effective policy framework as well as enforcement to encourage local content in telecommunications development. He urged NCC and National Information Technology Development Agency (Nitda) to ensure that policies are formulated to encourage operators in the industry to use locally made equipment where necessary in the sector. This he said would go a long in solving the problem of unemployment and save the country’s foreign exchange that are used in the importation of those goods with local alternatives.
Obstacles to adoption
Nigerian psyche has been steeped in the notion that foreign made products are preferable even when there local alternatives are of higher quality and cheaper. Government officials expected to set example for private sector to follow are also cut in the web of this act as most government officials uses foreign made goods against the locally produce ones. This accounts for lack of vigor required in the enforcement local content policies in the different sectors of the economy.
Liberalization is not an end in itself; however it could enhance the capability of the local content to the asses of capital, technology and knowledge by which the overall objective of economic development could be achieved. Local workforce and home-grown technology as the main actor in the process of liberalization of telecom can inject more capital, acquire new and modern technology, generates additional resources for telecom development. The process of integration possesses various opportunities and challenges and such challenges which are complex as well as need competitiveness have to be dealt with joint effort of the regulatory authorities and local input inside the telecom space through appropriate institutional mechanism.
Global spending on telecommunications and pay-TV services will reach $1,544 billion in 2024, representing an increase of 2.4 per cent year-on-year, according to the Worldwide Semiannual Telecom Services Tracker published by International Data Corporation (IDC).
The latest prediction is 1.0 percentage points higher than the version published in the May edition of IDC’s Tracker.
If that forecast becomes reality, the above-mentioned annual growth rate would be the highest recorded in the last twelve years.
The above-average positive revisions of the forecast apply to the regions of the Middle East and Africa (MEA) and Latin America.
This is mainly a consequence of hyperinflation in countries such as Turkey, Egypt, Nigeria and Argentina, in which it has become usual to see average revenue per user (ARPU) figures growing by more than 50 per cent on a yearly basis.
Conversely, the outlook for the markets of Europe and Asia Pacific has been slightly downgraded, mainly due to the deteriorating economic climate in key countries such as Germany and China.
The expectations for the North America have not changed much between the two tracker updates, apart from a minor positive revision in Canada’s market.
The analysis by type of telecom services confirms that the well-known trends persist despite the changes in top-line forecasts.
Mobile remains the largest segment, driven by the growth in mobile data usage and M2M applications, which is offsetting declines in spending on mobile voice and messaging services.
The fixed data services segment will continue growing, driven by the need for higher bandwidth. Spending on fixed voice services will be dropping over the forecast period as the rapidly declining TDM voice revenues are not being offset by the increase in IP voice.
The traditional pay-TV market will decline slightly over the forecast period due to the growing popularity of VoD and OTT, but these services will remain an important part of the multi-play offerings of telecom providers across the world.
The global connectivity services market is expected to maintain a positive outlook over the next five years, with a compound annual growth rate (CAGR) of 2 per cent.
The overall economic climate is expected to improve as the key central banks in the US and Europe will continue decreasing their reference interest rates.
Inflation will continue declining, which will have a positive impact on the purchasing power of the population.
The negative elements of the forecasting puzzle will include saturation of the telecom services markets in major countries, as well as the unstable political situation in some regions, particularly Eastern Europe and the Middle East.
Additional risks are related to the potential shifts of economic policies related to the new US government that might lead to the rebirth of protectionism.
IDC’s latest forecast is more optimistic than its previous one. However, even in this scenario, the growth of the connectivity services market is expected to remain sluggish, prompting operators to seek additional revenue streams.
“There are quite a few promising areas in which operators could expect solid returns. These include fibre optics, IoT, UCaaS, SD-WAN, digital services, LEO satellite services, cloud services, IT security services, network APIs and network sharing, and 5G-advanced,” commented Kresimir Alic, research director with Worldwide Telecom Services at IDC.
“These companies should also increase the pace of digitalisation and software-isation of their business processes, create new go-to-market strategies based on data and intelligence, and deploy innovative business models based on telco-as-a-platform and co-creation within ecosystems.
“Essentially, telecom operators should aim for a complete transformation — from traditional commodity service providers to modern, full-stack technology suppliers. This transformation should position them as leaders in the digital transformation revolution, potentially securing a central role in the new digitalised world,” Alic concluded.
MTN, Africa’s biggest mobile operator, is exploring partnerships with low-Earth-orbit satellite providers to bring internet connection to rural and remote customers in particular, according to Ralph Mupita, CEO of the group.
LEO satellites provide high-speed internet even in areas where terrestrial telecommunications infrastructure such as fibre and mobile broadband is difficult and expensive to deploy.
“To keep customers and businesses connected at all times, we’re going to have to embrace satellite as an additional technology form,” Mupita stated.
He said South Africa-based MTN was carrying out proof of concepts with several LEO satellite operators for possible partnerships.
“We are exploring several, and actually some of them we’re happy to be resellers through our enterprise business to some of our customers in specific countries,” Mupita said.
Reuters reported that MTN is not alone in seeking out partnership agreements. Smaller rival Cell C is doing the same.
South Africa’s biggest operator, Vodacom, majority owned by Britain’s Vodafone, announced a partnership with Amazon’s Project Kuiper LEO satellite last year.
“We’re very aware of the challenges of having to compete as a fixed and wireless operator with LEO satellites over time, so we’re arranging ourselves to be able to sure-proof our businesses in our key markets,” Mupita said.
Starlink operates in several African countries but has faced regulatory challenges in others, including South Africa, and resistance from state telecoms companies.
In the lead up to Anambra Innovation Week 2024, in a landmark collaboration poised to position Anambra State as Africa’s Silicon Valley, the United Nations Development Programme (UNDP) has partnered with the Anambra State Government through the Solution Innovation District (SID) to establish a cutting-edge Makerspace.
L-r: Ms. Elsie G Attafuah, United Nations Development Programme Resident Representative in Nigeria; Professor Charles Chukwuma Soludo,CFR; Chinwe Okoli, Special Adviser to Governor Soludo on Innovation and Business Incubation, and Christian Udechukwu, Commissioner for Industry, Anambra State, at the foundation laying ceremony for Anambra Innovation Marketplace.
This event was officiated by the Governor of Anambra State, Professor Charles Chukwuma Soludo, CFR and the United Nations Development Programme Resident Representative in Nigeria, Ms. Elsie G Attafuah.
This initiative aligns with Governor Charles Chukwuma Soludo’s visionary agenda of “Everything Technology, Technology Everywhere” and aims to empower youth, drive innovation, and foster economic growth across the state.
The Makerspace in Awka is designed to democratize access to entrepreneurship and technological innovation. It will create pathways for improved livelihoods by providing young people with the resources, skills, and collaborative environments to bring their ideas to life.
The Anambra Makerspace, strategically located in Awka, will prioritize inclusivity, with special programs tailored for young women, persons with disabilities, individuals with low literacy skills, and youth in underserved areas.
Speaking during the launch of the Makerspace, His Excellency Professor Chukwuma Charles Soludo, the Executive Governor of Anambra State stated that, This Makerspace will unlock new opportunities, drive economic growth, and empower local talent. Through collaborative partnerships such as the UNDP, we will pave the way for innovation.
I believe that technology is the bridge to a prosperous future, and we are immensely delighted to embark on this journey with UNDP. Our long-term vision is to raise a powerful Anambra Digital Tribe who will drive economic transformation through innovation, position Anambra as Africa’s Silicon Valley and make a significant impact on the global stage.
The value of Anambra’s Makerspace’s in entrepreneurship development is multifaceted.
The Makerspace will provide young entrepreneurs with the tools and resources needed to turn ideas into tangible prototypes, facilitating the testing and refinement of products. Breaking barriers to innovation, the space enables entrepreneurs to experiment and iterate without significant upfront costs. Thus, entrepreneurs are equipped with the resources to ignite ideas, permitting prototyping, testing and refinement of products.
What’s more, the Makerspace is forward-looking and promotes technological know-how through offering trainings and workshops, enabling skill refinement and keeping entrepreneurs abreast with emerging technologies.
In her remarks, Ms. Elsie G. Attafuah, UNDP Resident Representative expressed that the groundbreaking ceremony was “A landmark for young entrepreneurs, artisans, and innovators of the state and region at large.” Furthermore, she reflected on the significance of Nigeria’s youthful population, expressing that its talented youth are an invaluable asset and “The ability to create and innovate locally is not just a matter of choice; it is essential for economic resilience and growth.” Ms. Attafuah acknowledged the support of the Anambra state government and private sector partners, dedicated to ensuring the Makerspace remains sustainable, accessible, and impactful.
She extended gratitude to the Mastercard Foundation for its support in the establishment of the Makerspaces. Redefining entrepreneurship, Ms. Attafuah stated that, “The Makerspace puts young women, persons with disabilities, persons with low literacy skills and those living in non-urban areas at the forefront, for economic growth synonymous with social progress – leaving no one behind.”
The Makerspace is a launchpad for ideas that address real-state challenges extending to wider challenges of the nation. As such this space will bridge the gap between education and employability, enhancing the quality of life for all who live in Anambra and Nigeria. Empowering communities and preserving Nigeria’s rich culture, the space blends art, technology, and local craftsmanship, igniting creative capabilities in the region.
The Special Adviser to Governor Soludo on Innovation and Business Incubation, Chinwe Okoli, expressed enthusiasm for the partnership:
“We are immensely delighted to have UNDP support Mr. Governor’s vision for the Solution Innovation District as we continue to build the Anambra Innovation Ecosystem. The Solution Innovation District is designed to attract opportunities like this from leading institutions, further cementing Anambra’s position as a hub for innovation and creativity.”
She highlighted the Makerspace’s cutting-edge features, stating, “The facility will be equipped for robotics, textiles, and electronics, with dedicated sections for design, prototyping, and advanced technological experimentation.
“It will also include collaborative zones for brainstorming, ideation, and project pitching. Importantly, the Makerspace will integrate designs that celebrate Anambra’s rich heritage while meeting global standards.”
The project stems from the UNDP-Anambra Stakeholders Meeting on Digital Transformation and Tech Development held in August 2024.
This strategic dialogue highlighted critical gaps in the state’s innovation ecosystem, particularly within tertiary institutions, and laid the foundation for this transformative partnership.
The Makerspace will bridge these gaps by fostering collaboration among academia, industry, and government while serving as a launchpad for the commercialization of groundbreaking ideas.
The Makerspace will incorporate green building materials, energy-efficient systems, and sustainable waste management practices. By involving local youth and artisans in its design, construction, and operations, the project not only nurtures local talent but also reinforces its commitment to environmental stewardship and community ownership.
The Makerspace is a highlight of the upcoming Anambra Innovation Week 2024, scheduled for November 25–29, 2024. This event celebrates the state’s remarkable strides in technology and innovation under the theme “Creating the Future of Africa Now” serving as a premier platform to showcase and celebrate Africa’s dynamic innovation ecosystem.
The Makerspace aligns seamlessly with the vision to position Anambra as a regional leader in technology, entrepreneurship, and creativity. Local firms will lead the remodeling, repurposing, and furnishing of the facility, which is set to become fully operational within six months.
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