INTERVIEW: Why transition to digital economy will take many years

By Ihesiulo Grace

3 August 2020

Editorial

The President of the Association Telecommunications Companies of Nigeria (ATCON), Mr Olusola Teniola, in this interview with Daily Times correspondent, LADESOPE LADELOKUN, bares his mind on a wide range of issues, particularly Nigeria’s digital economy drive.

The Nigerian Communications Commission (NCC) recently declared that telcos would now submit their financial statements in line with the Accounting Separation Framework, how did you take the news?

It was expected and alongside the Telecoms mandatory corporate governance guidelines and the recognition that Accounting Separation will someday be introduced by NCC to govern revenue assurance, the Nigerian Broadband Plan 2020-25 (NBP) had noted this as an intervention that would be made by NCC as part of the recommendations made by the NBP committee. So, with the worrying spate of insecurity in Nigeria, it is only expected that telcos will cooperate with security agents to check the activities of criminals.

But accusing fingers are being pointed at telcos for aiding and abetting the abuse of the fundamental human rights of citizens by security agents. For example, a Twitter user was reportedly arrested on the instructions of former President Jonathan for creating a parody account of the former President. It was learnt that he got traced through the personal information provided by his network.

How can telcos work with security agencies without violating the rights of the citizenry?

Every citizen is obliged to work with the Nigerian security apparatus when backed by appropriate court orders. As law-abiding citizens, our members are not only obliged to but as a condition of their operating licence have to retain information as part of their operations for a certain period of time. The security agencies in Nigeria work alongside our regulator (NCC) in collaboration with our members to address security issues. Lawful interception of messages and addressing malicious calls are functions that are available to mobile network operators and various other technologies can be used and switched on to aid the tracking down of perpetrators of crime.

Nigeria is said to be behind Rwanda and some African countries in terms of digital penetration and technology consolidation. What are we not doing right?

This is not a race and definitely not a sprint! The Digital transition to a Digital Economy will take many years to adopt, implement and embed into our society. Some countries began the transition earlier than others and some countries have to revise how certain technologies have been introduced into their society, such as AI and embedded chip technology. As there is no holy grail as to how long this transition will take and no one-size-fits-all approach, we should instead look at what has been done and establish what needs to be done going forward. Right now, Nigeria has in place a Nigerian Digital Strategy in the form of the Nigeria Digital Economy Policy and Strategy (NDEPS) and this has pillars that will require alignment to our current situation (as is) and then various strategies to move each pillar to a future vision (to be).

For instance, the recently unveiled Nigerian Broadband Plan 2020-25 (NBP) is an example of the Solid Infrastructure pillar. We now need to do the same for the remaining pillars that make up the NDEPS. Then we have to focus on effective implementation of the strategic pillars, again in the case of the Solid Infrastructure, the Hon Minister of Communications and Digital Economy, Dr Isa Ali Ibrahim Pantami, has already inaugurated a Broadband Implementation Steering Committee as recommended in the NBP.

With the spike in the number of businesses going online owing to the outbreak of COVID-19 pandemic, doesn’t it worry you that there would be a surge in the cases of cybercrime?

It is of concern that systems around the world built for good are also opportunities presented to criminals to attack and to commit Cybercrime in digital economy. As there are no systems in the world that are fool-proof, it is actually the new normal to protect the vulnerable from the many flaws that are present in the World Wide Web (WWW) and alongside this recognition that security enforcement agents and users of the WWW must be on the alert when accessing the internet via the WWW or via other means to carry out their daily lives. In the case of the surge in virtual use cases and instances; it is through public awareness and through education that the incidents involving Cybercrime via Social Engineering can be addressed.

Some experts have argued that for effective implementation of Data Protection Regulation, Nigeria needs Standard Data Compliance Organisations and Data Protection Officers. How ready are we?

In addition to these, we need to introduce advanced technologies such as Artificial Intelligence (AI), Machine Learning (ML), Data Science, Analytics and collaborate with all relevant stakeholders to protect personal data. Local data warehousing and hosting along with international standards and best practices should also be enforced and finally ongoing public awareness through various media channels need to happen.

Do you agree that it will take a long time for NITDA to effectively enforce Data Protection Regulations because there are constraints that still need to be looked into?

It is going to be a challenge for any agency to effectively enforce any regulation that they do not have direct oversight. Data Protection is a multi-stakeholder challenge and multi-sectoral scope that will require Presidential backing and the political will to enforce, considering the many multi-faceted problems faced by the country. NITDA will require every assistance to make this regulation effective and sustainable.

Having juxtaposed the effects of COVID-19 on aviation, entertainment, sports, etc. sectors, some observers are of the opinion that it is a boom time for the telecoms sector. Do you agree?

To a degree yes and no! With the current input costs in relation to the ease of doing business in Nigeria, lack of availability of FOREX, infrastructure deficit and the macro-economic situation in the country, it is important to note that reliance on digital platforms in conjunction with a physical presence to run the fundamental economy is dependent on a strong consumer-driven society. The initial uptake in consumer spending pattern from home to Internet access resulted in an uptick in revenue numbers for the MNOs only.

However, second quarters (Q2) numbers are likely to demonstrate no corresponding improvement in the net profit margin of the Mobile Network Operator (MNOs), Internet Service Providers (ISPs) and other infrastructure players across the eco-system. Suffice to say, if consumer spending flattens or goes negative then the third quarter (Q3) and fourth quarter (Q4) numbers will reflect an alignment with the GDP contraction as predicted by the International Monetary Fund.

In spite of the unceasing calls by stakeholders in the telecoms sector for telecom infrastructure to be declared as Critical National Infrastructure, there appears to be no headway. Would you say Nigeria or the Nigerian government is yet to appreciate the importance of telecoms infrastructure?

It is heart-warming to share with you that the President has approved a directive for telecom facilities to be granted special protection, whilst the Executive Order on Critical National Infrastructure (CNI) is being worked on by the Presidency. This demonstrates that it is now widely recognised that we need to protect our Digital future by protecting our Solid Infrastructure.

Recently, it was reported that Orange, the biggest telecoms company in France, is planning to join the Nigerian market, what does this mean for the industry?

Orange has already partnered with two members of ATCON and their strategic intent over the coming months rather than years as communicated by their CEO is a demonstration that the Nigerian telecoms market is the most attractive in terms of the potentials that exist and the 183million subscription numbers for it to be ignored by any global operator seeking economies of scale. Despite the risk profile of the country, it still presents a long term opportunity in areas such as Digital Financial Services (DFS), addressing Financial Inclusion, Internet of Things (IoT) and Digital Transformation for example.

The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof Umar Danbatta, had recently hinted that Annual Operating Levy and Spectrum fees may go up if the economy does not improve, would it be correct to say consumers should brace up for higher tariffs?

The EVC of NCC also stated that AOL may also go down as NCC seeks to review all charges and fees. It is clear to all in the industry that the telecoms industry is now a critical sector for the country and our economy. As an enabler to the growth of all other sectors, the primary focus is to the consumer and to ensure that every Nigerian is able to affordably access the internet in a meaningful way, therefore, the cost of doing business still needs to be addressed to narrow the digital divide.