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FDI: Firm cautions on local content implementation in telecoms sector

Chief Executive Officer of CWG, Austin Okere, made the call in Lagos while speaking on the local content panel at the just concluded ATCON Telecom…

Chief Executive Officer of CWG, Austin Okere, made the call in Lagos while speaking on the local content panel at the just concluded ATCON Telecom Executives and Regulator’s Forum at the Eko Hotels & Suites.
He advocated the right type of local content policy in the telecoms industry as key to sustaining the achievements of the sector.
Okere said, “We should not stampede the NCC into taking actions that will impede the much needed Foreign Direct Investment in the sector. We should not confuse local content with taking businesses from foreign investors and handing them over to locals without recourse to technical ability and financial capability within the value chain.”
According to him, while telecoms operation is extremely intensive in financial investment, the rewards are very slow in manifesting.
He said Etisalat for example with over 15 million subscribers, has admitted to not making any profit despite huge investments in her network since inception.
Okere lamented that many of the local CDMA operators are finding it increasingly difficult to sustain the heavy investments needed to make their networks viable; saying hemorrhage subscribers at an alarming rate has also threatened CDMA’s existence.
Austin made a distinction between the capital-intensive laying of communication pipes which he refers to as ‘plumbing’, and the utilisation of the pipes to provide value added services such as E-commerce.
He posited that local entrepreneurs will benefit more in the value chain by taking advantage of the communication infrastructure to launch hitherto unrealisable business models as has been demonstrated by Jumia, Konga, and his own company CWG Plc, which has taken advantage of the pervasive broadband infrastructure in the country to launch a cloud-based subscription business providing technology to SMEs tagged CWG 2.0.
Okere gave examples of how local companies such as Alibaba in China have taken this initiative to create businesses much bigger than the telecoms ‘plumbing providers’.
He listed other examples to include Google, Facebook, LinkedIn and Twitter in the US and MPESA in Kenya.
“Local content should not be about targeting a bigger share of the small cake, but rather baking a much bigger cake that can go round, with people paying in the areas of their greatest strengths,” Okere concluded.
The Executive Vice Chairman of the NCC, Dr. Eugene Juwah, challenged local operators to ensure that they imbibe adequate skills and have access to finance, and also display the requisite commitment, in order to be taken seriously. According to Engr. Juwah, “CDMA is dying because of lack of adequate investment capital; telecoms is not for small companies, be capable or you will die,” he noted.
He announced that the result of the Infraco bidding exercise will soon be announced.

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