There are very few people in Nigeria with reasonably considerable influence that are hardly associated with flaunting their influence or taunting whoever they meet with their palpably visible power; IBRAHIM DIKKO is one of such very few Nigerians. His ilk, rare yet very necessary, is of a very special genre. Intelligent, calculatingly focused, the genteel Ibrahim would hardly say a word even where he has all the information and knowledge about a corporate issue; until it becomes absolutely necessary for the good of all and the corporate institution at stake.
His gradual progression from handling regulatory affairs at Etisalat Nigeria to now more transformed responsibilities as Vice President, Regulatory and Corporate Affairs, only mean the company and the telecom industry will be the better for it. Sitting down for nearly an hour and sharing his insights with IT & Telecom Digest’s MKPE ABANG and KAYODE ASHAOLU, was an opportunity to present his insights to the world, in the following interview:
Question: Congratulations on your recent appointment as Vice President, Regulatory and Corporate Affairs. So what exactly does this new position entail?
Answer: I think it’s a natural progression in terms of how we want to position Etisalat itself in the market. I have been handling regulation and government affairs since inception of the company, and I think it has reached a stage where our brand is now very clearly established in the market. So it is only normal for us to look at how we position Corporate Communications in terms of what we want to put out there in terms of messaging in the market by merging the departments. And also in terms of how we are perceived by the general public in terms of what we do around Corporate Social Responsibility, sustainability and giving back as a responsible corporate citizen.
There is this question that when Etisalat started, the first CEO was an expatriate; the current CEO is also an expatriate – with all due respect to both gentlemen; that when is Etisalat Nigeria going to have an indigenous Nigerian CEO?
I don’t think there was any concerted effort whether it should be Nigerian CEO; we literally went for an international head-hunting to look for, as far as we’re concerned, the best talent out there; whether he is English, Nigerian or, otherwise, it is irrelevant. We just wanted the best person for the job with the requisite experience, who has got international experience. If we had come across a Nigerian, I’m sure we would have hired the person. As you can see, even with MTN that now have a Nigerian CEO; they groomed him for the position over time and he came up through the ranks, was trained in some of their smaller operations before he was given this kind of assignment. So I’m sure in time to come, it is not impossible to see a Nigerian running the operations. As it is there is 1,900 staff and there are not less than 15 expatriates.
What level of contribution does Etisalat Nigeria make to the Etisalat Group?
Nigeria in terms of 17 or 18 operations we have worldwide, in terms of size, ranks number three or so for the operation. So we are up there amongst one of their largest operations. We are certainly a late entrant into this market; so in terms of profitability if that is what you are asking, we are not quite there yet. There are many other markets that Etisalat has been in for much longer that are more profitable than the Nigeria operations. We are still yet to get there.
So will you say that the money invested in Etisalat Nigeria including cost of the licence was a wise decision?
Absolutely! I think seven years later, if it wasn’t a wise choice, any business man would have gone but Etisalat is fully committed to Nigeria and this operation.
Talking technology, people are talking about moving to the next level; LTE and stuff like that. You are probably aware that two of your other competitors will be launching that in a very short time. How are you positioning for this?
I think it is a national progression. Every operator looks to continue to grow and improve, using different types of platforms, technology innovation being one of them. So everybody does have plans in the market. I think there is a need for all of us to look at where next the technology bar is going worldwide and how we position. It’s important to remember, something like LTE, does the full ecosystem exist around here in terms of devices and so on, that are affordable for the size of the market that we have here and the buying power of the people. So it’s not just saying I have launched LTE; have you launched the kind of service that people want to use, can use and can afford to use; but, yes, certainly it is part of our plans as well.
We don’t have enough base stations across the country to give you the room you require to provide coverage everywhere as aggressively as you would like. What plans does your company have to make sure that your presence, which is based on quality, is actually felt all over the country?
We built out the network very aggressively over the last six years as you are well aware and last year, we actually we sold a large amount of towers to a tower company which specialises in that business. What that does is two things. One, it obviously frees up some money that you have but it also gives you a lot of opportunity to focus on what is your core strength; and ours is not managing towers or supplying diesel; it is being a telco, which is our core focus, so that it allows us to do. The second thing it does is it allows us to reach the infrastructure that they have on the ground; so if they have another 100 towers, I’m able to go and share them and use them; so it increases your speed to market and ability to cover bigger footprint around the country.
When we talk about quality, it means that you are going to invest aggressively in getting new equipment or new technologies. Can you share with us the level of investment Etisalat is planning to do between now and the end of the year, to ensure that you do not only keep that quality you have, but improve it?
I think we can comfortably say that if you look at our CAPEX-to-revenue ratio across the industry, we probably are spending the highest amount of money in terms of percentage wise of our revenue in our infrastructure. So over the last five years, I think we have invested at the rate of over 139% building out. We’ve actually started lighting up the 2,000 of fibre that we’ve built; 2,000 kilometres of fibre backbone around the country and we’ve been lighting it up in stages. I think we have lit up almost 90% of the 2,000 kilometres right now and within the next month the entire 2,000 kilometres will be operational. So the investments are heavy and continuing. One of the other things we are doing in terms of quality to make sure we sustain it and have resilience in our network is that we’ve just finished building a state-of-the-art data centre. And I think as far as telcos are concerned, probably we are the first to build one of these fully-integrated data facilities that is certified outside of Lagos so that we have that redundancy and back up that one finds very useful in case something catastrophic happens in Lagos or that might affect out network, we can seamlessly shift the traffic to another part of our network and continue to run and back up facilities as well. So that has been launched in a remote location well outside Lagos and we are very proud of that as well. So that is the major investment that the business has put in place.
That is interesting. So how much did that cost?
I don’t have the exact figures; but it is in tens of millions of dollars. It is not a small facility.
In terms of regulation which is actually your core area, how would you describe the Nigerian regulator, let’s say in the last 24 months?
I think good job; a very good job done. The sector is not small and it is not easy to regulate. As you’ve just heard, the huge level of investments that the telcos put into the business, the growth that we’ve had. I think last year it was put at something like nearly $10 billion has entered into the sector. Teledensity has hit over 100% and continues to grow; so net-net, very good. One of the laudable things I can immediately think of is the National Broadband Plan that they have put in place. You know when you look, we can say that is where we are lagging behind a little bit; something like 6% penetration in terms of broadband where most other places average like 30%. Now if we can get that up, then you will see sort of massive, massive growth there and value to the people. They say every 10% increase in broadband adds something like one and half per cent to GDP; that will be phenomenal. So if we go from 6% to 30%, you know, that would be 3% to 4% additional to GDP, so the sector itself would now be contributing, we are now at about 8% contribution to GDP, we would probably be closer to 12 or 13% – that is a significant improvement and that all helps by having very clear regulation. I think there is still a lot that can be done. You spoke earlier about spectrum. I think access to additional spectrum, but this time, not just with the person with the biggest pocket, but to make it equitably available to some of us that are smaller players is very critical for survival. So I think partnerships should be encouraged and certainly access to this 1 Gigabyte, 700 spectrum – I think there is a lot of work to be done in that respect by the regulator. I think also in terms of more aggressive regulatory intervention such that value is not all concentrated in one area or one person, is important; and competition needs to be encouraged and obviously needs to be regulated as well so that those that have significant market power are adequately regulated. You’ve got two sets of stakeholders in effect – the industry on one side that you have got the responsibility to look after and on the other side, you have got the consumer, the Nigerian public that you have to protect their interest and once you are very big, then there are bigger obligations that go with being large.
When you spoke earlier, you spoke about teledensity being 100%, given by the regulator or whoever; but you know very well that many of us carry multiple phones. And when they say it is 100%, I get worried and I ask is it true?
I think it is just a simple statistic. If you look at somewhere like the UAE, they are talking about even somewhere around 110% teledensity. It just means there is that much more devices if you numerically count; so it is a mathematical thing, rather than what it does. If you look at all the point of sales equipment, each one of them has a SIM and that’s counted as a SIM as well because it is doing a transaction, which doesn’t necessarily mean a human being. Have we covered every inch of Nigeria? Of course not, as you said, a lot of that is multiple SIMing. So is there growth still left in the industry? I will say absolutely, there is great potential. You know we are only beginning to get into a lot of e-commerce type transactions; mobile money transactions, e-health type platforms; e-governance hasn’t even started if you ask me. So I think there is a lot that we can still do in terms of technology to still grow the market place: E-learning, e-health; these are all areas still needing growth. We have started to make small inroads; if you look at how the telcos supported last year around Ebola issue, it was just about information gathering you know. I think all the operators got together at that time, donated free handsets, free airtime, free data; so that the field officers could collate information and very quickly, they could run a database and we can do things like that or so many more things like that. And some of the innovative things that we do at Etisalat, you will start to see as time goes on or continue to see as time goes on as we launch more new products in the marketplace.
So six years down the line, have you started to make profit?
Nearly; nearly there! That is why I said we need more support. As you know, Nigeria is a difficult environment to operate. We have massive incidents of multiple taxation, where multiple bodies want to regulate you, you have very high fees in terms of rights of way, we have made great inroad with the smart state initiative, what the Honourable Minister has done trying to get the states, rather than to see the telcos as money making venture where they empower all these consultants to hold you to ransom, they come and partner with us. Who wouldn’t as state or public institution want to know where are my citizens, what are they doing, what do they like to do. That information is available, so if you partner with us, we can help in so many different ways. And by the time they start doing more transactions, that taxable and vibrant economy that you want would come rather than saying this base station is now a business premise and we are going to tax it for pest and vector control and bring N500 million (demand), which we have seen happen to operators or if they just seal up a base station, and with all the attendant problem of the site going down being knowing that they are all connected; that means that whole sector of the country or a media gateway or something like that, it can actually affect a whole region. So these are critical to bits of infrastructure that should not be tampered with. There are proper legal means for everybody to address whatever grievances they may have with an operator.
There is a potential threat to telcos’ revenue from companies like Whatsapp, Skype, the Over-The-Top (OTT) players, as they are called, as they ride on the back of operating companies but don’t pay anybody anything, no interconnect fees, while telcos are losing revenue that would have accrued to them through short messaging services, video and data exchange and so on. How is that kind of operation affecting not just your company, but the industry generally?
It is something that the whole industry is addressing and quite rightly concerned because we’ve got massive investment on infrastructure and massive businesses that we are running to keep it up and running and then you have a service which citizens quite rightly want to use and would like to use and we are happy to facilitate them to use; but you have got to be responsible about it and also how do we get compensated for it. So this debate is taking place; and I think it was a central theme this year in Global World Congress in Barcelona where the likes of Facebook and so on, had their CEO come and sit and collaborate with telcos. So I think the trend that we are seeing is one of collaboration, so they are beginning to appreciate our businesses better and we’re in talks, even locally, we are in talks with these companies to see how we can partner with them and what we can do so that they can deliver the value and we can also be adequately compensated for our work.
Over and above what is happening in the market, you are supposed to be the fifth licensee, but now we don’t have one of the licensees operating. Somebody has bought NITEL. So apparently the MTel licence went along with the purchase. If it did, as an industry operator do you think given how you guys have moved up to this point, that operator can still have a leg room in the market place?
Well, I’m sure they would have done their own analysis before they put in a bid for that. My understanding from what I read in the press two days ago where the BPE awarded them the licences, I understood it went with the mobile licence for MTel and NITEL. They would become a player in the market and I think there is space but I think the competition is very tough; we all wait to see what happens in that space with that operator.
Regarding your company, when do you think your operations will not only break even, but you can relax and be giving money back to your shareholders?
I don’t think there is any one place where you can say you have to be this big or that small and so on. I think it is a natural evolution. If you remember in 2001, you were paying like N30,000 for a SIM card; today, you get a SIM card which costs us N200 to produce – you get it free plus N200 free airtime. So your pay back period for everything is much longer. I’m sure when Econet and MTN and Glo were rolling out, buying their first BTS site, they were probably paying N20,000 or N30,000 tenement rate. Now, you are paying in the millions. So overtime, the cost of business has greatly increased. I think investors now understand that it is not a short term business but of course naturally, nobody wants to get into any business that is not profitable, but we believe it will come. A few years ago, we talked 3G was it and that is the limit; today, we are talking LTE and 4G, and discussion has started about 5G,whether it is refarming, whether it is new spectrum, new services, OTT, Cloud Computing, you’ve got to stay ahead of the curve. So you continuously plough back to stay ahead of the curve.
You have this handshake with Huawei, now it seems they do almost everything for you guys, the network. If tomorrow, another equipment vendor comes, and offers you something better, are you ready to switch?
I don’t think it is as simple a debate as that; it’s not just like picking up a phone that you like today. It is a whole bouquet. I think worldwide now there are not more than six or eight major equipment manufacturers of telecom equipment. Really, if you are not working with Huawei, it is an Alcatel or it is Nokia Siemens and the likes; so it is a fairly rarefied field in terms of who can do what to give you those end to end services. And even at that, Huawei doesn’t have our entire network, they are major partners of ours but we still work with others in this space.
I’m happy you even mentioned Alcatel. As you know Alcatel-Lucent has been bought by Nokia to be called Nokia Corporation. So, they may want to come and muscle some others out of the market. What do you think?
Well I don’t know about muscle but they could hold their market share because we work with all three of them: Huawei, Alcatel-Lucent and Nokia. So for us, the consolidation probably just makes it better, I’m now working with two people as opposed to three; and it is easier to manage.
Let’s look at the competition in the market here. All you operators struggle to offer something special to gain market share. What differentiating factor do you think your company is making; not only to have a good leg room, but to stay ahead?
I think it is the same differentiating factor that stood Etisalat out and has brought us to where we are with over 22 million subscribers today that we still hold strong. We were the last to come, we were not a known entity in this market and we had to come, break in and make our mark. Two things stand us out from the rest — which is the quality of our network, as you know, we‘ve been consistently adjudged to have the best quality in the market; we met all the NCC (Nigerian Communications Commission) KPIs (Key Performance Indicators); and in 2014, we were the only operator that wasn’t sanctioned for poor quality. So that is something and I think we have been rewarded by customers showing their loyalty to our network. The second thing we do very well is innovation around our types of products and services and customer experience that we give when you are an Etisalat customer. If you recall, before we launched, we launched the 080Naija-you-choose; and rather than charging you a massive premium for a nice number, we said, you know what, call us, tell us whichever number you want, if we have it and no body has taken it, we will give it to you. So, more than a million people signed up even before our first call. That was new and innovative; that nobody had done. Then we did the ‘home zone’, where when you are in a particular area, you got better tariffs. Lately, we’ve launched talking about different applications; we have launched something called ‘smartpaks’. It was the first of its kind in this market where rather than you just sort of buy data and then it runs out once you’ve used it, we said what do you want to do, here is a pack of things that you like, do you want to do it for a week and you buy it for the period that you want rather than just buying it for a time; and subscribers have been very pleased with that. So I think there are things like these that we have done in the market that continued to show our leadership and we will continue to do and keep doing. So watch that space.
When you launch a scheme like the one you just mentioned, is it for you to get more people on to the network or to serve the ones that are already there? What is usually your aim?
It depends on your target market, so the business user, may be like you, you’re not really interested in may be music or games; yours is to make sure you have superb data, fantastic roaming for all your trips and voice quality for when you’re holding a business call. That is all you care for, irrespective of price. It may be very different for the man right down the line; which is just value for money: how can he stretch that for as long as he can, if it is the youth market like this smartpaks, that is around may be you get your Facebook, your Whatsapp and E-mail for a week. For a student, that is great, that’s how they communicate, that is what they do; but not for somebody that is running his business or corporate account, who just wants data all the time, every time, so you have got to look at the product for whom. And quite often, somebody just sees something, may be not really designed for him but he likes it and he migrates to it. So it is a combination of new market that you are looking for, as well serving an existing market or an existing customer.
It looks like Etisalat is not very aggressive on CSR. Can you tell us more about this?
I would actually challenge that! Especially that it’s my portfolio. I think may be we haven’t been very public about what we do. But, yes, Corporate Social Responsibility has been a cornerstone of what we do right from inception when we launched. So we did not say we must be profitable before we give back; no. To work and live and operate in any community, you must obviously be a responsible member of the community. So our CSR platform is based around three pillars: Education, Health and the Environment. And we’ve done some very interesting things which I would just tell you a little bit about. Around education, we launched in 2013, first of its kind Etisalat Engineering MSc Course in Telecommunications Engineering in partnership with Ahmadu Bello University, Zaria, Etisalat Academy in Dubai, and Plymouth University in the United Kingdom. And what it is, is we looked around all the universities in Nigeria and we found out that there was no specific telecoms engineering Master’s Degree Programme; you know you could do Electrical Electronics, but not in telecoms. So we said let‘s bring this kind of a university course to a Nigerian university; and so part of the MSc Course is we will take 20 students every year into this programme that we fund, they will go to the Etisalat Academy for specialised training in Dubai and they will also get trainers from Plymouth University who would come; and then the PhD students, we will train in Plymouth; so we’ve now got a couple of them in Plymouth University in the UK. And the lecturers also come and then we catered out a full Lab, telecoms Lab in ABU Zaria; so that’s one of the things we do to give back. The other thing we do that is our flagship is we support Literature. So we have the Etisalat Literature Prize that is Pan African; so it is open to any African and we are just starting the third year and that has been very successful; the prize winner gets a prize of 15,000 pounds, as well as some teaching at a top University in the UK, and also, we do a book tour for two countries in Africa with them. So it is an Internationally-rated Literature prize. This year, we even had Professor Wole Soyinka at the final draw, where the winner was chosen, so that is what we do. The third thing we do in education is we also give scholarships to final year students in six universities in the six geo-political zones of Nigeria. So we go round the country every year and we give over 100 scholarships or grants to final year students that are top in sciences and business degrees, so we work with the VCs, and they just give us the list of their top 10 students in each school and we give them a grant every year. We have done well over a 1,500 of such grants in the year, so we just support them in their final year and that has been very successful. We also do adopt-a-school. It started off first in Lagos, where they said, well look, please go round to any of our public schools, look at them, don’t even come around to Alausa, sit with the principal and agree what you want to do with them. So we adopted three schools in Lagos, and we have got multi-year support programmes with them, where we help them mainly with infrastructure and that has been very rewarding and the model has worked very well, so we are beginning to replicate them in other states outside of Lagos, where we’re saying, look, yes we will go to State Government or State Ministry of Education; but generally, we will go to the school and adopt it and work directly with the Principal, in terms of helping them with whatever we can. So we are strong in CSR. In terms of the Health area, we have the fight ‘Malaria Initiative’, so we do a lot of awareness, advocacy, and distribution of nets, so that people are actually aware of what is happening. One of the things we are doing this year differently, we are actually going to have a prize for the best journalist that writes around Malaria. It is one of the biggest killers, but because it is silent, and it is almost accepted that when you get Malaria, you stay in bed for two or three days, we don’t realise that for the young, it is a massive killer. I think over 300,000 people die a year from Malaria, which is a fairly preventable disease if well managed. So it is something we are working very hard about and very committed to. HIV/AIDS, we are also supportive with the National Agency for the Control of AIDS (NACA) and the UN Aids Foundation, so we have good partnership with them where we do a lot of campaign and awareness for people living with AIDS, we do SMS broadcast and we have helped them with call centre where you can get information as to what to do, how to manage it, so that has been very good. And in terms of the environment, we were the first to launch the Eco SIM Packs that didn’t have so much waste; so rather have the big packaging that you have things like plastics that is not biodegradable and we went to a completely small form size that was completely recyclable, so that is some of the things we have done. We were very supportive with the Ebola campaign and the likes, so there are the things we are doing all around the different platforms, so those are the key areas we tend to support on CSR and now that they work directly under my team, you might hear a little more about it.
You are doing a Literature prize for Africa; that means it is continental. Do we see Etisalat taking licence in another African country soon?
Etisalat does have licences in many countries in Africa. We are in Tanzania, Sudan, we recently acquired Maroc Telecom, we are in several French speaking West African countries under the name of Atlantique Telecom, so many of them are not branded ‘Etisalat’, as such may be people are not aware, but Atlantique Telecom is 100% owned by Etisalat and it is in six countries – Benin, Côte d’Ivoire, Gabon, Niger, Central African Republic and Togo. And then Maroc Telecom is Etisalat’s, Zantel in Tanzania is ours, Canar Telecom in Sudan is ours, and we also have in Egypt too, so we have a footprint across Africa.
Maybe if they consider giving it one name, it could be good for the brand. What do you think?
I’m sure they are considering that at the headquarters.
Doing regulatory work is not a joke, now they have added more into your portfolio. How are you going to be coping? How’s your schedule like these days?
It is difficult, but it is made easy as well by having a good team. So you are only as good as the people you work with, and I think I have a great bunch of guys and ladies who work with me and support me out and let me go home in the evenings.
Challenges for the industry, a number of them are prominent: electricity, security, etc. But are there some specific challenges in the industry apart from the things everybody seems to be aware of that you think people don’t talk about them much?
I think the most critical ones are the ones we have talked about. If you look at it, every BTS site is powered by two generators. We all run generators at home and we know how difficult that is to keep them going and yet, we cannot afford to switch ours off for 10 minutes at all; it must run 2/47; 365, come rain, come shine, no matter the location. If something breaks, somebody must be there, otherwise, we get penalised, and in most other places, this is a given, you get power, you just connect to the grid and may be you might have one small battery back-up to last you a few hours should there be any shut down, but here, you’ve got to run a power business, security business to secure those sites, and then you have got to run a transmission business; these are three businesses that are tangential to running a telco. But we have to do it all here in Nigeria. So there are massive challenges. I think one of the things that we are fairly keen to see happening is the ‘critical national infrastructure’ bill to declare telecom infrastructure critical and to ensure that nobody can just walk up to a BTS site, whether you have the badge of some authority or not and just switch it off without due process. I think that would go a long way to helping the industry become sustainable. Like I said, I think the regulation could be more robust; so we are constantly looking for how it can help support the industry better to level the playing field and continue to level the playing field and continue to make sure some of the late entrants can compete fairly.
You just spoke about regulation; 2.6GHz licence auction has been postponed twice, now we don’t know when it is going to happen. Was your company preparing to bid for it?
No, we had not actually for the 2.6GHz. It did not fit our plans at the time.
If you were made Communication Technology Minister, what would you do differently?
Interesting question! The truth is I do not believe in always forklifting policy. Whoever comes, you come and run your bit; tomorrow, I might not be on this seat as head of regulation for Etisalat. I would hope if someone succeeds me, or when someone succeeds me, he finds that there is some value in what I have done and he continues the good part of the work and where there are things that he needs to tweak or improve, they will do so. I think Nigeria has done tremendously well in terms of what has happened over the last 10 years on a policy level in terms of support communications technology sector; I think some of the things we do is sort of whoever becomes the next communication technology minister is to build on some of these platforms. Like I said, the broadband policy is something that is very robust and we show tremendous growth over time; so that can be done. I think access to additional spectrum in a different manner that could help spur a lot of these growths is something that should be seriously looked at by the incoming government. What ever the challenges are between the National Broadcasting Commission and NCC and National Frequency Management Board should be looked at for the good of the country. The 700 spectrum is absolutely critical. World Radio Congress 15 has set the deadline of July of this year. We know we are not ready and we cannot do it. But for everyday we lose is that access to very useful spectrum that is enough for everybody—it is enough for the broadcasters, it just has to be re-arranged. How we do that efficiently and cost effectively is important. That is one of the main areas; because all that government does is policy and setting enabling environment, not actually regulation; they should leave that to the regulator to do. Those are the sort of policy areas I will look at. Then how you help on multiple taxation; don’t kill the goose that is laying the golden egg. You want to encourage it because if you can do better, then you will have bigger pie that you can tax later comfortably, rather than tax them now when they still need a lot of support. Those are the critical areas, and of course, we are looking at content and supporting software development. This is a huge market and you don’t even have to try to sell outside Nigeria. Look at what people like Jumia and Konga are doing and the lady, Mrs Seriki—doing computers locally and supporting places like Computer Village. So these are lots of things that are going on that are all around the sector, all under the Ministry of Communication Technology that need a lot of support and have received a lot of support from Mrs Johnson and her team and I think it is a great pillar that has been set that should be improved upon.
You run two offices; I have met you here and in Abuja, and now that you do not only run two offices, but also have two major departments to run, I wonder if you do find time to relax at all?
Yes I do. I actually run four offices
How do you?
I like to swim and go to the beach.
You really find time?
Well, when the time permits, I do. And I also like to exercise. That is the nice way to relax.
Are you married? Kids?
Yes! I am married with two kids; a girl and a boy.