The managing director of Spectranet 4G LTE, Mr. Ajay Awasthi has disclosed that the data market segment of the Nigerian Telecoms industry is in need of a new business direction to remain afloat in a hostile and highly competitive environment.
In an interview, he said “I see consolidation in this space through mergers and acquisition into big Internet Service providers (ISPs) to be able to weather the storm of this harsh operating condition. There are some 100 licensed ISPs, today less than 20 percent are operating just to say that something is wrong and needs intervention”.
While expressing fears over poor service delivery by tower operators which he said is seriously affecting the business of ISPs, Awasthi called on the Nigerian Communications Commission (NCC) to intervene through new guideline to tower operators on the level of service delivery which if not met will attract sanction or none payment by the customer.
He said “Presently, the costs of delivering services aren’t coming down. This situation is not sustainable. We would like to roll out services across cities in Nigeria, but the situation at the moment does not give you the support to embark on such investments. The costs of building infrastructure are growing by 10%; that is huge costs to us. Also, some ISPs are facing the heat. They have contracted tower companies that charge for fees in dollars. I think it is very difficult this time to decide whether to go ahead and expand or stay put”.
Adding his voice, Chief operating officer of Direct On Data, Satis Kumar, concurred with Spectranet boss, saying “the traditional ISPs are presently facing unfavourable operating environment which has made the business unprofitable”.
Apart from tower operators’ issues, he listed Network Operating Centres (NOC) expansion, power issues, bandwidth cost and base transceiver stations (BTS) issues.
He decried that tower operators are constantly raising their charges without efficient management of the towers.
According to him, “We have had a situation where security men attached to a tower refused to power generator because he was owed salary and our service went down. Bandwidth cost is still a challenge as some wholesale bandwidth companies that bought bulk from undersea cable operators are selling for $15,000 per Mbps if you buy direct from undersea operators you get $8,000. What we are doing now is ‘hand to mouth’ system”.
