Telecoms: Bridging infrastructure deficit through collocation facilities

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Colocation, Data centre, Medallion, Nigeria, NCC

 

 

Though the Nigeria’s telecoms industry is, no doubt, confronted with infrastructure deficits as a result of medley of factors with negative impacts on the industry growth, analysts say leveraging the capacity of collocation companies such as Medallion Communications Limited could be the way out for players to reduce capital expenditure (CAPEX) and operational expenditure (OPEX). Martin Ekpeke reports

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Despite a record of over $68 billion local and foreign direct investments (FDIs) into the country’s telecoms sector, lack of a robust infrastructure remains one of the challenges that have bedeviled the Nigeria’s telecom ecosystem. In fact, the country continues to face an acute shortage of infrastructure.

The infrastructure deficit appears to have, in collaboration with other nexus of factors, subjected telecom subscriptions to a sharp decline in the number of active mobile subscribers put at 139 million by the Nigerian Communications Commission as of July 2017

Existing infrastructure deficit

Information provided by the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, shows that at present, there are over 50,000 base transceiver stations (BTS) spread across the nooks and crannies of the country. However, the telecoms chief regulator believes that the actual number of BTS needed for the country to provide optimum services to burgeoning telecoms consumers is 80,000.

Prof. Umar Danbatta, Executive Vice Chairman of Nigerian Communications Commission

Going by Danbatta’s revelation, the Nigerian telecom terrain is presently faced with an infrastructure gap of 30,000 BTS, which has been estimated by industry experts at over N1.8 trillion.

This is troubling for an industry, which latest data from the National Bureau of Statistics (NBS) show that in 2015 and 2016, contributed 8.6 per cent and 8.9 per cent respectively per cent to the National Gross Domestic Product of the country.

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The infrastructure deficit, as confirmed by the Executive Commissioner, Technical Services at NCC, Engr. Ubale Maska, appears to have, in collaboration with other nexus of factors, subjected telecom subscriptions to a sharp decline in the number of active mobile subscribers put at 139 million by the Nigerian Communications Commission as of July 2017.

Impact on service delivery

Consequently, customer experience, according to the President, National Association of Telecoms Subscribers (NATCOMS), Mr. Deolu Ogunbanjo, has continually declined as a result of poor quality services and in most cases, outright service disruption.

Telecommunications and information technology present copious opportunities for the creation of unprecedented wealth for any nation. For instance, available data reveal that the sector currently contributes over 12 per cent to the national economy, having contributed over N15 trillion to the country’s gross domestic product (GDP). The telecom industry has remained a major employer of labour and an enabler of economic development with over 2.5 million jobs already created so far, as captured by the Nigerian Communication Commission (NCC) in a recent report.

The telecom industry has remained a major employer of labour and an enabler of economic development with over 2.5 million jobs already created so far, as captured by the Nigerian Communication Commission (NCC) in a recent report

The story of telecommunications in Nigeria and its envisaged benefits to the growth of the economy, is relatively not as exciting as it should be as a result of the dearth of telecommunications infrastructure. The dearth of a robust telecom infrastructure in the country is adversely affecting all sectors of the economy, including healthcare, law enforcement, education, commerce; industry and banking, as the survival of any economy depend heavily on reliable telecommunications infrastructure.

To combat the infrastructure insufficiency, industry experts have called on the need for telecoms firms to key into collocation framework already developed by the telecoms regulator.

Leveraging local collocation capacity

There are a number of collocation providers in the country that can be leveraged towards addressing the infrastructure gap in the country. Medallion Communications Limited, one of West African one-stop interconnect and hosting companies readily comes into the picture.

Ikechukwu Nnamani, Chief Executive Officer of Medallion Communications Limited

Though, collocation has not been fully adopted by telecoms companies in Nigeria, Chief Executive Officer of Medallion, Mr. Ikechukwu Nnamani, believes collocation can serve as the new model for addressing telecoms infrastructure deficit while cutting down capital expenditure (CAPEX) and operational expenditure (OPEX).

This, Medallion, an NCC-licensed company has preached and has painstakingly been building infrastructure backbone supporting Nigeria’s ICT and telecommunications industry in the area of carrier neutral infrastructure sharing and connectivity in the last 12 years.

The dearth of a robust telecom infrastructure in the country is adversely affecting all sectors of the economy, including healthcare, law enforcement, education, commerce; industry and banking, as the survival of any economy depend heavily on reliable telecommunications infrastructure

The Medallion’s effort, though has not totally addressed the challenges, industry observation shows that it has given rise to Nigerians appreciating the value of shared infrastructure and data center service delivery.

For instance, the Medallion collocation center, located in Lagos, South-West Nigeria is today one of the most connected facilities in Nigeria. A checks by ITPulse confirmed that over 83 service providers, including all global system for mobile communications (GSM) operators, code division multiple access (CDMA) operators, fixed wireless and fixed line operators in Nigeria are connected to the Medallion’s collocation center. This is a feat that endeared the company to win the ‘Best Connectivity Provider in Africa’, recently at the 2nd  Africa Information Technology & Telecom Awards (AITTA), Accra, Ghana recently.

The resilience telecom infrastructure Medallion has built over the years is currently accommodating the hosting of contents from both local and international service providers in Nigeria, thereby localising a huge percentage of content and data, which were hitherto hosted abroad

“While we are in Nigeria to drive collocation, among other services, I can confirm to you that our client lists also include all long distance, international fiber network operators and metro fiber transmission providers in Nigeria,” says Ikechukwu. He claimed this is a feat no other facility in Nigeria has as of today.

Addressing the lacuna

According to Ikechukwu, 100 per cent of local collocation and hosting platform built by Medallion is tailored to the specific needs of the Nigerian environment, while at the same time meeting all required international standards for the class of services offered.

Ikechukwu argued that facilities, such as the one provided by Medallion is capable of addressing the infrastructure challenges and allows customers to operate in a more cost effective way.

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“We have not only built collocation infrastructure, but we have also set up Interconnect Houses where telcos can have the opportunity to interconnect with multiple operators in one location. This helps them to reduce overhead,” Ikechukwu explained.

He also disclosed that the resilience telecom infrastructure Medallion has built over the years is currently accommodating the hosting of contents from both local and international service providers in Nigeria, thereby localising a huge percentage of content and data, which were hitherto hosted abroad.

New investments in data centre

Just recently, as part of its effort to fortify its infrastructure for a possible surge that would likely be experienced by infrastructure companies as a result of the advocacy for local hosting of data and content, Ikechukwu said Medallion added additional 50 rack spaces to its Data Center infrastructure in Lagos.

“Medallion believes the additional rack spaces will enable telecom operators offer efficient and cost effective services to the general public in a non-discriminatory manner,” he said.

Collocation can serve as the new model for addressing telecoms infrastructure deficit while cutting down capital expenditure (CAPEX) and operational expenditure (OPEX)

Not relaxing because of the fact that building infrastructure is its core business, Medallion, which is fondly referred to as ‘Nigeria’s Telehouse’ is currently strengthening its infrastructure market footings by expanding interconnect clearinghouse services across Nigeria. ITPulse noted that in addition to its facilities in Lagos and Abuja, Medallion is creating new interconnect points in Enugu, Port-Harcourt, Kano and Ibadan in its next expansion phase in a bid to address some of the interconnect challenges in the industry.

In Ikechukwu ‘s words: The biggest push we are making is to expand our available infrastructure and services to other regions so they can also participate and benefit from it because we feel that the moment you get point of presence (POP) closer to the users, you achieve two things: better user experience at a faster and better rate and lowering the cost.”

Going forward

Industry analysts are of the view that the establishment of an independent interconnect clearinghouse, especially from indigenous telecoms firms such as Medallion, has seen to improvement in the area of establishing interconnection, which used to take up to a period of three years in the past. From findings, once an interconnect decision is taken in line with NCC’s collocation implementation framework; it only takes a few weeks to establish, a development that, if adequately adopted, can help in bridging the extant infrastructure gap in the country.

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