Convergence, market dynamics and why ICN rules the market
Managing Director of The telecommunication infrastructure firm, Interconnect Clearinghouse Nigeria (ICN) Limited, OLADELE AYANBADEJO, shares with ANTHONY NWOSU on how ICN is responding to market dynamics; how convergence is altering the industry; and why government must support local infrastructure providers. He shares this insight in Lagos with IT Edge News.
What is Interconnect Clearinghouse known for and what are your strides in the telecommunications ecosystem?
We offer inter-connectivity between all the telecom operators in Nigeria, basically for voice. This is what we set-up to do. As the evolution in the telecom industry is becoming obvious, there is a convergence now between voice, SMS and data. We offer a kind of balance for operators to connect through us. We act as a one stop shop for any operators to get connectivity to other operators. We also look at the VAS firms, we offer them the ability to host their services and connect with other operators, apart from that we provide a billing for these VAS firms and operators known as interconnect billing and also do reconciliations for the telecom players. We stand out as a clearinghouse as the operator to mobile number portability on behalf of the Nigeian Communications Commission – NCC. This has set us apart from the other clearinghouses. We operate this service for the regulator. We are also a neutral third party that is not in competition with the operators for subscribers. We are focused on the primary issues of adequate interconnect capacity between operators and service providers, prompt billing, settlement of interconnect usage charges and provision of cost effective co-location space.
There are reports that some operators are making porting difficult for subscribers. How true is this?
Though, before now, the process was a bit cumbersome. There was a committee set up and we came together and look at the whole process and operators made their point known and we worked together to make this porting easier. We had this meeting and reviewed the process and made it a bit easier. In terms of how Nigerians are porting from a particular network to another, there has been an increase in this due to the fact that the number of days to port has been reduced. I mean the number of days that Nigerians port from one network to another has been reduced from 90 days to 45 days.
There are complaints that most Nigerian data centre providers have issue of frequent downtimes – Also, what’s your position on charging Over the Top (OTT) applications?
We are the only clearinghouse that have multiple locations in Nigeria. We are in Lagos, Abuja, and Port Harcourt . In the area of OTT, voice isn’t disappearing just that we have convergence today in Nigeria. Internet is converging everything together. There is a need to collaborate within the industry. There is no need to charge the OTT and we can see that data price is crashing and infrastructure cost is high. We must find a way to ensure that the cost of data doesn’t kill the industry. Hosting in Nigeria is cheaper and makes more economic sense to have your information in Nigeria. A lot of local businesses have started seeing this benefit and now they are hosting in Nigeria. What businesses do is to bring their servers to us and host here because we have connectivity to all operators and we are looking at adding extra locations in Asaba and Kano. So you can see the benefits of having your data hosted in Nigeria.
The challenges for local data centres is higher cost of hosting and downtime. Thus, Nigerians are opting to host overseas.
The challenge we have is mostly power and data infrastructure, but we have resolved that. We have over 99.99% availability. We have three sources of power here from the public electricity, generator and inverter. We don’t consider power an issue here. We also have enough capacity to do what we want to do. We also looked at the geographic diversity and that is why we are having these points of presence scattered in the country. Services that we are running in Abuja and if we notice that we are over utilizing our capabilities, we simply route some to other locations and this makes us run optimally. This geographical spread enhances our availability. Though, it has impacted on our cost of operation like energy because the cost of us getting energy is three times what is applicable overseas, but at the same time, it has increased our efficiency in line with global best practice.
The issue of capacity building and the dearth of skill set was highlighted during the last ATCON forum – TERF. The TERF participants also asked that the proposed IT university be jettisoned. Do you support this?
The intellectual capacity is the issue but the education institutions in Nigeria are not helping matters. The higher institutions have refused to evolve, the curriculum offered in these higher institutions are not in consonance with the modern trend. This situation has put a lot of added costs on telecommunication firms in form of added cost in training hired hands. There is this other thing with Nigerians , we don’t see what is called interdependences. There is no clear-cut division in most sectors like telecoms, broadcast and IT – They have converged. In terms of education curriculum,there should be a way where the NCC, NITDA and NUC can come together and fashion out a curriculum that is in tune with the modern requirements.
“We don’t consider power and issue here, we also have enough capacity to do what we want to do. We also looked at the geographic diversity and that is why we are having these points of presence scattered in the country.”
Has there been any form of collaboration between Interconnect Clearinghouse and the public sector, how have you been able to engage them?
I think that government should start looking at partnership with the local industry. I call it local patronage. Government must fashion out ways to patronize and protect the local ICT firms. The reason is, there is a lot of things that they could help us to do and we are not yet enjoying these. Just like these clearinghouse business, the mobile companies bring to us a paltry amount which doesn’t keep us afloat. They need to be encouraged to patronize the local industries and Nigeria government need to encourage the local players. What the regulator need to understand for the industry to grow, there must be plurality and have smaller players to have their own share of the cake. As you can see that technology is overtaking the regulation. Though, the regulators are trying in this aspect.
What are the various benefits of using Interconnect Clearinghouse?
There are various advantages of using our clearinghouse. As the largest clearinghouse in Nigeria, we are connected to all the mobile and CDMA operators and a majority of the PTOs in Nigeria, which gives you the advantage of saving cost by using just one connection at ICN to all operators.There are no additional infrastructure required as the Clearinghouse already has these infrastructure in place and may only require upgrades and expansions. A single point of reference instead of collation of data from the various networks, the Electronic Data Records are collated form the clearinghouse alone. Also, the network operators will not require additional infrastructure to achieve this implementation but would rather upgrade or expand their existing capacities to the Clearinghouse. Impartiality of a third party whose data can be relied upon by parties involved in the scheme. The Mobile Number Portability (MNP) with its Local Number Portability (LNP) routing is given with Interconnect Clearinghouse Nigeria Limited and so correct routing of all calls to subscribers in their correct networks ported or not is guaranteed at no extra cost.There is a seamless integration of other service for the same purpose of adequate taxation will be added to this service in the future. Allowing time to complete Voice and SMS traffic taxation will be a good starting point.
Should OTTs be charged by the regulator?
My view is simple, use technology to play with technology. If you block OTT, you are creating and encouraging illegal channels. I used to work in the Middle East and what I noticed is that people use Virtual Private Networks (VPN) to bypass government control. With this VPN, you can use the WhatApp,Skype,Viber, etc. But using VPN is illegal and that is what the government is trying to discourage, but charging the OTT in Nigeria would give rise to people bypassing the network and that isn’t right. You cannot ban the OTT but find a way to create a balance. I know why operators are crying. I think the billings have not yet captured what we are using the internet for. We have not been billed accordingly. We have the capability of doing that, the network must have a way of restricting what the subscriber is doing. For example, somebody is downloading or streaming high definition video during peak period, the subscriber would be consuming a lot of bandwidth and this is forcing others to be restricted. So what should be done is billing such subscriber in a premium way. The telcos must have a way of categorizing subscribers according to the usage of bandwidths. Today, smartphones do consume a lot of bandwidth and you can see a situation where just a few people would be consuming a whole lot of bandwidth due to the kind of device that they are using. Modern devices are bandwidth hungry, there must be a healthy balance between technology and deployment in Nigeria.
Why is Interconnect Clearinghouse the best option to route oversea calls. What are the advantages?
As the largest clearinghouse in Nigeria, we are connected to all the mobile and CDMA operators and a majority of the PTOs in Nigeria, which gives you the advantage of saving cost by using just one connection at ICN to all operators.There are some benefits of using ICN versus direct connection to the operators: Maintain and monitor one connection to multiple operators; ease of billing and neutral third party reconciliation; support with Short Code routing and management; maintain one bi-lateral agreement instead of several interconnectivity across various protocols SS7, IP, SIP, H323,SMPP,etc and continuously monitor the performance and usage of links (E1, IP) connected to an operator to ensure optimal allocation of resources and notify the operator of any degradation of service recognized through traffic analysis. We also provide access to Least Cost Routing and Colocation and access to all major operators with adequate redundancy. Most of our international calls are routed overseas and for you to call Ghana, it would first go overseas before it is routed to Ghana . This makes calls expensive, but with our services, you do not need to route calls to any European switching centre. All you have to do is route it in Nigeria and also for security reasons. Over 90 percent of data that comes from the internet is localized in Nigeria, so why host overseas, we are offering the same availability with what is applicable overseas. Imagine if you lose your connectivity oversea, you have lost your data. It makes logical and economic sense to have your data hosted locally.
“Most of our international calls are routed overseas and for you to call Ghana, it would first go overseas before it is routed to Ghana . This makes calls expensive, but with our services, you do not need to route calls to any European switching centre.”