How NTEL is operating, growing in Nigeria’s competitive data market – Former CEO

Kamal Abass, former CEO, Ntel
Kamal Abass, former CEO, Ntel

Kamar Abass was the pioneer CEO of ntel, Nigeria’s foremost 4G network service provider. He led the network through its establishment, which began with the acquisition of core telecom asset previously owned by Nigeria’s national fixed and mobile operators- NiTel/MTel- by NatCom Development & Investment Ltd. (NatCom) in a liquidation process supervised and approved by Nigeria’s Bureau of Public Enterprises and a court-appointed liquidator.

In this interview with PREMIUM TIMES’ Ben Ezeamalu and Oladeinde Olawoyin, Mr. Abass spoke on the challenges in the telecoms industry, the firm’s vision and mission, its future prospects, among other issues.

Excerpts:

PT: You launched your operations in 2016, how has it been running the business in a recession?

Kamar: Well, we launched business to customers in April 2016. Since then we have expanded our roll-out to cover three cities –Lagos, Abuja and Port Harcourt. We now have very significant network coverage in Abuja which is biggest for 4G and also as big as 3G coverage in Lagos. And in Port Harcourt, it is significant coverage; and in total, we are targeting to make sure that we can cover all 3G areas with 4G in the cities that we go into. We now have more than 300 staff – directly employed, we now have many, tens of thousands of customers. We have a full range of services – we have robust, high-speed data which is the fastest in Nigeria; we have messaging; and, of course, we have high definition voice services. And we continue to develop our portfolio to add other flexibilities to make all our customers enjoy our services more; different ways in which to pay and, of course, multiple locations in which they can buy services from us and reach out. And so, we are very pleased with the progress we have made. We have put ourselves firmly on the map as a provider of broadband services in Nigeria’s three biggest cities which account for almost half of all broadband spendings in Nigeria.

PT: It appears the recession has had no effect on your operations…?

Kamar: (Cuts in) We don’t have a prior year against which to compare. So, in our first year, we did the things we did because that’s what ought to be done to provide our services to customers. Honestly, maybe in 50 years we’d look back and compare but right now, we started well from, errr, zero and whatever we do, we bring in improvement.

PT: You mentioned that in Lagos, you have better coverage of the state; but some customers have complained they are not getting strong signals – in Ikeja, for instance. Could it be because you are still rolling out your….?

Kamar: (Cuts in) So we are in the presence of completing our roll-out. In Lagos, it is roughly 75 to 80 per cent.  And when it completes, it would be the case that everybody who has access to 3G signals would be able to access 4G from us. But today we are probably just the final way to go…on our roll-out in Lagos. And in Abuja, we have less than ten per cent of our roll-out that remains to be done. In Port Harcourt, it’s about 15 per cent that remains to be done. So, for us, you would see improvement in access to our networks in Lagos, certainly. This improvement would be material –in Ikeja, Surulere, Lekki, Oshodi-Isolo, Ajah.

PT: Still on the issue of business environment, Etisalat had issues and we’ve also learnt of some other networks having issues. What are you doing differently because you appear not to be feeling any sort of pressure or challenge?

Kamar: It is hard for me to know the services of other people but what we have considered very carefully is where the telecoms market is going. And when you consider that question, you realise it depends on which market: the market for 2G services is in decline – it has been falling since the middle of 2015. People are spending less; the market for data is growing. There are 3G and 4G data and 4G data is better –and we are building a 4G network. We are building a solution to the present and emerging demand characteristics of this market. And for that reason, we see ourselves as working in a way that will take advantage of the customers’ evolution in the market. In a way, others may plan to do that but the additional benefit we bring is that our own business is focused on data and the whole of the way we go about our services is all about data and how we provide to customers. Today, we are a new network and we are servicing a market where there are 50 million broadband customers and they are on 3G and those 3G customers want a network which is faster and more reliable. So that’s what we do: to catch the market at where it is going.

PT: What’s the relationship between your mobile network and NITEL?

Kamar: NITEL and Mtel are part of the previous government’s company. And NITEL filed for bankruptcy in 2008, they were in various attempts to be sold between 2005 and 2015. In 2014, a liquidator was appointed and a strategy of selling the asset. And so, we bought some asset of NITEL and Mtel. We’ve taken these asset and we have had additional asset to what we bought and we used it to create a brand-new telecoms company.

So, for example in 2008, 4G didn’t even exist as a technology standard and we couldn’t have inherited that from NITEL and MTEL. It was simply the licenses, the spectrum and some buildings. There are satellite ground stations and there were towers. So, most infrastructure around the core telecoms applications and of course assets like licence. These are the things we acquired –they are among the important building blocks of telecoms and we have added other building blocks.

PT: What about the staff?

Kamar: The staff had been previously made redundant by NITEL who had been redundant in previous years. There was a small number of staff left over, between 350 and 400 and they have been a very useful addition to our team.

PT: The NBS released a figure that shows that nTEL has gone beyond its competitors, and now you are talking about inherited asset and all –from NITEL. Do you think that has given you an advantage over your competitors?

Kamar: Every telco needs some building blocks. We got some building blocks but we didn’t get them free; we had to pay. And I think it is known that we paid $252 million to pay for these building blocks. And we need all these building blocks to start business and that’s what we have done. We have a particular approach to marketing and selling services and we are focused on building momentum and building impact in the market place and that’s what we strive to maintain.

PT: Let’s talk about data price. For some time now, the big telecoms have tried to crash the price in an attempt to force out the smaller players, how have you been able to flow with that?

Kamar: We approached pricing by looking at what we can deliver with our network and making an assessment as to the value that represents to our target customers. And we go ahead to the market and offer them. I am not sure that I see an attempt to drive operators out of the market, I just see a very aggressive competitive set chasing a market that has emerged. What I think people may underestimate is the demand for data. It is enormous. Our customers use between 40 and 50 gigabytes a month. Easily, three to four gigs a day and the reality is that that demand is still growing. So, we are out there giving customers great value, then they will use even more. So, my sense is that customers are having a very good time and they are spending more and spending on data is a very welcome trend that may continue.

PT: What’s the impact of this price regime in the industry, really?

Kamar: Certain people actually think about their cost structure and they are those who are saying the pricing of data is too aggressive. What I think we would concentrate on is ‘let us build in a cost efficient way, let us create companies that are sustainable’ in terms of structure and service. And ultimately, let us make sure that customers feel a very strong affinity with the commercials available. As the price falls, customers will use more and more. And we are just going to make sure that we get the right pricing at the right time in relation to the volume so we can create sustainable businesses. By and large, the big challenge is cost structure that we create in our businesses –this is the most important thing and that’s what makes us sustainable. With our spectrum, we see ourselves with an excellent costing which can pull the roll-out. That gives us protection and flexibility when it comes to cost efficiency.

PT: Any plans to expand your operations beyond your…?

Kamar: Cuts in: Certainly. That’s certainly. Absolutely.

PT: How soon?

Kamar: I think we are on a funding round at present and we are looking for that to complete between now and the end of Q3. We start in earnest acquiring equipment; so, we are looking at early next year –the first half you should see significant expansion on our network into the southwest, southeast, and the north too –into key cities in these geographical areas.

PT: Does your concentration on Lagos, Abuja and Port Harcourt affect your operations in any way?

Kamar: I am pretty satisfied that these three cities represent maybe around 15 or so per cent of the population but they represent 50 per cent of telecoms sales. So there is plenty of potentials in these three cities; but that is not to say that that could be the end of our ambition because there were additional customers to be accessed and, more importantly, there is the opportunity to serve these customers from these three states when they are outside of those areas. So, we would move beyond and like say first half of next year, you’d see us doing important works in each of the regions adjoining where we are today but we are growing pretty well in this service. We are growing robustly and I think there is significant potential.

PT: I notice that most users own a variety of service providers –MTN, Glo, nTEL etc – due to service fluctuations. Do you think we could ever get to that point where people would have one service provider and have so much confidence that there’d be no need to get alternatives?

Kamar: Probably, we would have been laughed at if they said, by 2015, there will be more than 100 million mobile customers. Probably back in the late 1990’s even in the early 2000’s, they would have been laughed at. It is taking us all by surprise: the volume and persistence of demand. And so, when you come into a market and you are anticipating demands which is in the units of millions and then you have to expand for, maybe, tens of millions and you are continually trying to catch up with where demand is. There is problem of scale, cost-efficiency, integration and co-ordination. We are in an entirely different position, we see a very significant data market, and already people are talking about a data market by 2020 which will be about 100 million customers. Today we are roughly 50 (million) but there are talks about more than 130-140 million data customers on 3G and 4G. So, we are building for that sort of future.  We can do that because we have the confidence of what happened with voice. And if you deal with that sense, you can properly raise and allocate capital to it. You can also make sure that you put in place key building blocks that, over time, can scale efficiency. It is not to say that there have not been growing pains, in places we will have to adjust as we go –size, technology etc. We will have to do this all the time but that’s more or less the nature of our job to manage the network.

We hope we are in position to scale – to allow ourselves to service customers in a way that doesn’t see our cost multiply faster than our revenue and that’s the risk. If you are forced to scale efficiently, then ultimately you are building unsustainability into your business. Our target is to grow our business so our marginal cost are small for the same unit of additional capacity.

PT: Apart from data, what other aspects of service delivery do you focus on?

Kamar: Voice, messaging and of course access to the internet. Once people access the internet, then they will be able to do whatever they want ––download and all. What we see as the dominant on our network is video; people want to watch video and in their numbers. Then music, entertainment, games and cloud store. Beyond that, in some other countries, mobile networks are supporting drones, I fully expect to see that in my lifetime in Nigeria. What’s more important for us is to build a network that attracts entrepreneurs and innovators and inventors; that’s the future we look up to.

PT: How supportive has the regulator, the NCC, been in terms of regulations, policies and all that?

Kamar: Very supportive. This regulator has presided and contributed to creating that very largest market in Africa. So, it has been doing something right and certainly we see how it has engaged vigorously in this matter with Etisalat. Certainly, it has been pivotal to us being here today – supportive, open, and transparent. It has done what he said he would do as far as we are concerned. So, we are very happy with the regulator.

PT: Will TY Danjuma, being a member of your board, have any impact in your drive towards expansion in the North?

Kamar: Well, the General–that’s what I call him– TY Danjuma is a leader of repute. He has been supportive. It is always inspiring to be with him.

PT: What about Dahiru Mangal, is he a member of your board?

Kamar: Who?

PT: Dahiru Mangal.

Kamar: No. not as far as I know.

PT: How often do you address customers’ complaints? We have over the years had cases of spam messages, unsolicited SMSs and all that which often go unaddressed in spite of assurances from telcos, how do you intend to change this.

Kamar: As regards complaints, we have a call centre which is a 24-hour call centre where we get resolutions to complaints.

PT: Is it toll free?

Kamar: At present we are working on the pricing.

PT: Looking back, how would you appraise the last few months? And what are your projections for the future?

Kamar: It has been exciting doing what it is that many thought was impossible. It has been exciting to see the appeal of our products and how it has been received. It has been very exciting to test ideas. It has been a very exciting time and I look forward to a more exciting future.

EDITOR’S NOTE: Mr. Abass has stepped down as nTEL’s CEO due to “urgent personal and medical considerations,” according to the company and has been replaced by Abhulime Ehiagwina.

This interview was conducted before he stepped down.


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