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Funds, Asset Managers Should Invest in Digital Infrastructure – Tizeti CEO

“We saw how things changed with the first generation of broadband and over the next 18 months, we will see a lot of activities tied to that”

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Kendall Ananyi, founder/CEO Tizeti
Kendall Ananyi, founder/CEO Tizeti

In this interview, Kendall Ananyi, founder, and Chief Executive Officer of West African ISP, Tizeti, speaks on the increasing interest in Africa’s broadband connectivity, especially with the floating of the Google Equiano submarine cable, MainOne’s acquisition by Equinix, and shares perspectives on what industry players are doing to boost broadband penetration.

Tizeti

TE: There is increased interest in broadband connectivity in West Africa, with the scale of the projects we are seeing. Equinix recently completed its acquisition of MainOne, Google is landing its Equiano international cable this month and we see other similar projects. What is driving this strong interest that is manifesting in the investments, opportunities, and trends we are seeing?

Kendall Ananyi: Yes, the interest has been huge. Last month, we welcomed the first landing of Google’s international cable, Equiano to Togo, and heard that it will land in Nigeria this month.

This is Google’s third private and 14th co-invested submarine and indicates the company’s interest in boosting internet penetration in Africa. And there are many positive outcomes from projects like this.

Equiano is expected to drop wholesale broadband prices significantly, which means operators can buy more capacity to pass on to their customers, drive new investments into the countries that it lands and improve internet outcomes for millions of people.

But that’s not the only thing that’s happening around the digital infrastructure space. If you look at the fixed broadband space, which is where I play, we just announced a partnership with Microsoft to go into Oyo State.

This partnership will see us deploy our low-cost wireless technologies to make it easier and cheaper for people, especially those in underserved communities, to access the internet and get connected to the digital economy.

If you look at the fiber infrastructure vertical, Lagos State is building its unified Internet fiber infrastructure with WTS Projects This shared fiber infrastructure is something we have been expecting for a long time as it will address some issues related to multiple infrastructures, Right of Way problems by allowing internet and mobile providers to access already existing digital infrastructure, without breaking the bank.

This shared infrastructure will accelerate the rollout of broadband services in Lagos. On the satellite side, early last year, the Nigerian Communications Commission issued licenses to some major satellite companies, one of them is SpaceX, and they will be in Nigeria soon.

When you look at the data center infrastructure space, MainOne’s MDXI just launched its Lekki II data center, to boost infrastructure development to scale industrialization and internet adoption, especially for cloud computing.

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When you look at the startup activity in Nigeria and the inflows of over $4b FDI over the last ten years into Nigerian startups, across fintech, health tech, etc, it is easy to understand how cloud infrastructure can enable these apps. When seen together, this indicates an exciting time for digital infrastructure in Africa.

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TE: So, we are seeing the numbers growing and the improved contribution of ICT to the economy. But looking at a broader context: Africa has had several broadband plans and policies. However, the number of Africans who still do not have access to the internet and its development outcomes is around 540 million. How can we bridge the digital gap? Where are the opportunities to leap forward?

Kendall Ananyi: You are correct, a lot has been done but the gaps are still huge, and a lot still needs to be done. In Nigeria, in 2020, the NCC put out the national broadband plan which is trying to achieve download speeds of 25mbps in urban areas and 10 Mbps in rural areas and crash unlimited broadband prices to below 1% of minimum wage. The broadband plan is targeting three hundred and ninety Naira (NGN 390) per Gbps.

Our down-market product, Wifi.com.ng is already ahead of that as we are charging about NGN 500 for 1.5 GB. Other telecommunications companies have also reduced prices, over time, and improved internet affordability. Data truly is life, and we have seen the quick embrace of digital by many Nigerians.

Nigeria broadband penetration 2022

Nigeria broadband penetration statistics (Source: NCC.gov.ng)

COVID-19 also accelerated some of these opportunities. Due to the pandemic and the lockdowns that ensued, many businesses had to swiftly adapt to remote working and online meetings.

As economic processes adopted digital channels, social processes also had to. This skyrocketed the numbers of those that had internet in their homes, particularly in states like Lagos, Abuja, and Port Harcourt. This digital transformation has played a major role across sectors such as health, agriculture, education, and trade, and allows individuals, businesses, and governments access to extraordinary socioeconomic opportunities. However, there is still a lot to do.

Many states in Nigeria do not have effective broadband access and one of the challenges is access to capital. Without capital, broadband operators are unable to build new projects, especially in places that need them. There is an opportunity for pension funds and asset managers to invest in digital infrastructure.

Bloomberg in February that South Korea’s $200 billion sovereign wealth fund, Korea Investment Corp, plans to increase its investments in Silicon Valley startups as it looks to capitalize on the developing metaverse and enhance its exposure to alternative assets.

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The largest pension provider in the Netherlands, APG, with over $719 billion in assets under management, is believed to also be exploring investment opportunities in the metaverse’s foundations, particularly in augmented reality and virtual reality technologies. African asset managers can emulate these trends and invest in the infrastructure for the digital economy.

We have already seen how existing digital infrastructure has enabled all sectors and made IT and Telecoms the biggest contributor to GDP, job creation, and economic opportunities. Pension funds and asset managers, need to do a lot more as funding digital infrastructure projects have better lifetime value.

Unlike Ghana, Nigeria lacks a widespread, open-access national backbone network through which high-speed connectivity can be expanded at a reasonable cost. While there is a lot of fiber infrastructure in Lagos, Ogun, Rivers, and Edo but across the other states, it is not as much or at all. In Ghana, CSquared, a Google company, built fiber in a lot of locations and we need to mirror that kind of public-private partnership.

Equiano is coming this month and will meet about 5 other submarine cables including MainOne, but if the fiber infrastructure connecting states is not built, we may not see as much impact, except in about 5 states.

We are currently in 5 states and plan to expand to about 10 more states in Nigeria within the next 12 months. We will also expand into Togo this year since Equiano has launched there.

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On the policy side, when you want to improve broadband penetration on things like building base stations, site acquisitions, and getting permits for that, there are opportunities for that to improve. We must give a lot of credit to the NCC for being extremely progressive in accelerating the pace of telecoms industry advancement in Nigeria. For instance, one thing the NCC has also done is in access to spectrum – we saw the 5G auction completion last year with MTN and Mafab Communications.

This is a very exciting opportunity because with 5G there will be a lot of equipment shipped into the country, improved site locations cause the coverage area of 5G is a lot less, more space for tower installations, and more revenue generated for local communities. We saw how things changed with the first generation of broadband and over the next 18 months, we will see a lot of activities tied to that. So there are opportunities across every space and we will also see improvements in health care, fintech, education, etc, especially with improved broadband penetration.

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TE: What are the similarities between both countries – Nigeria and Ghana? You talked about the issues of state-to-state fiber connectivity, and Right of Way. How similar are those challenges between Nigeria and Ghana?

Kendall Ananyi: I would say they are at par because where when you look broadly, things even out. For instance, there is more stable power in Ghana which reduces expenses in that area versus Nigeria where we have to use solar power to man the towers to minimize the high costs of diesel to power generators. But in terms of permits, things have improved significantly.

Yes, the cost still exists, although this is a little cheaper in Ghana due to the presence of fiber infrastructure to latch onto versus Nigeria where the major fiber builds are in a few states such as Lagos, Edo, and Ogun with some growing activity in Port Harcourt.

We need the kind of infrastructure and policies that enable that, beyond Right of Way, to be able to deploy the fiber and work with communities to have more expansive fiber across Nigeria.

TE: What will the partnership with Microsoft in Oyo State achieve?

Kendall Ananyi: We announced our launch into Oyo State earlier this year and started installations this month. Our collaboration with Microsoft on its Airband project will complement Tizeti’s existing initiative in Oyo State and lay a foundation for a robust and thriving digital ecosystem for the large population of vibrant, young people in Oyo State.

Microsoft Airband Initiative with Tizeti

Oyo State has one of the highest numbers of higher institutions in Nigeria, and an eGovernment-focused leadership that is leading in digital technology infrastructure development and digital technology human capital development.

We believe that our low-cost broadband service will complement the government’s efforts in driving eGovernment implementation, digital access, and investment promotion, empower more Nigerians in Oyo State and stimulate economic activities.

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