Telecom Fails to Lift Nigeria as Connectivity Scorecard Rings Worries

Nigeria for the umpteenth year performed woefully in the 2011 global connectivity scorecard index scoring 1.09 and retains the 23rd position among the resource and efficiency-driven economies, although the mobile telecom sector continues to attract wide commendations, Nigeria CommunicationsWeek can now report.

Like in the previous year’s report, Nigeria continues to rank among the bottom five countries – India, Pakistan, Kenya and Bangladesh, despite posting a relatively better performance in the consumer segment, led by a high mobile phone penetration ratio.

This was the verdict of the connectivity scorecard, a global ICT index – the first of its kind to rank 50 countries not only on their deployment of ICT infrastructure but also to measure the extent to which governments, businesses and consumers make use of connectivity technologies to enhance social and economic prosperity, so called “useful connectivity”.

Nigeria’s performance in the public sector according to the connectivity scorecard continues to raise serious concerns as the report said it remains: “very poor, indicating significant room for improvement.”

Nigeria’s rating on the business-related scale falls short of average. It scored 0.05 and 0.15 in “business infrastructure and business usage and skills respectively result in lowering the country’s overall score and ranking.”

In other to redress these seeming intractable challenges, the “Nigeria (therefore) needs to make substantial efforts in utilizing ICT in the economically critical business domain.”

“Though the infrastructure component is relatively higher, indicating that there may be online services available, Nigeria suffers from gross inefficient utilization. This can be attributed to either a lack of resources or unaffordability that most Nigerians face, thus bringing down its score on this metric.”

Illiteracy also contributes to the country’s poor performance as it posted 70 per cent down the scale.

Despite having one of the highest mobile total cost of ownership (TCOs), ranking three times over Kenya put at about Naira1, 570 (approximately $10) per subscriber per month, the telecom sector continues to be seen as the big pusher in the country’s growth.

“Nigeria demonstrates its greatest relative strengths in the consumer components with scores of 0.08 in consumer infrastructure and 0.30 in consumer usage and skills. The country’s mobile phone penetration rate stands close to 60 per cent, which is very impressive in light of its fixed-line penetration rate of around 1 per cent,” the report stated.

However, the report failed to take into account the high failure rate among the code-division multiple access (CDMA) operators in Nigeria as it continues to rate the fixed-line segment in Nigeria the “most competitive (fixed-line) market in Africa.” In rating it the ‘most competitive’, it took cognizance of the fact that a second national carrier (SNO) was licenced with intent of operating a very viable fixed-line network which has so-far failed to materialize.

“Strong demand for internet services and broadband capabilities is aiding the development of the fixed-line sector, which has enormous growth potential. The majority of new lines are provided by fixed-wireless systems, and a new unified licensing regime introduced in 2006 will intensify the competition between fixed and mobile operators,” it said.

In the last three years several of the over 200 CDMA operators have gone out of shop due to a myriad of factors including operational cost, and lack of good corporate government. But chiefly, the CDMA or fixed-wireless segment has a mountain of a very vibrant GSM segment to contend with.

Faced with challenges of poor power supply, rising cost of diesel, infrastructure vandalisation and general insecurity to field operation staff, the CDMA operators budged. 

But Nigeria’s over 160 million populations, with over 60 per cent of that below 40 continue to be the high market attraction for investors. The performance of the mobile sector in more than a decade of market liberalization is another factor that spells hope for this complex West African economic powerhouse.

“The country, on the other hand shows immense potential for future growth. It is one of the biggest and fastest growing telecom markets in Africa, attracting huge amounts of foreign investment, and is yet standing at very low levels of market penetration. The mobile sector, shared by four operators, has seen triple-digit growth rates every year since competition has been introduced,” the report concludes.