By RARZACK OLAEGBE
The ISP business is good, but running it is a challenge.
Technology promotes disruption. Look at the banking industry. Fintech has threatened to half the pie. That is the power of technology. It allows business owners to reimagine an existing process. To leverage innovation and meet evolving customer demands. But it is a double-edged sword. It challenges established businesses. It creates opportunities for innovation and growth. It kills some businesses. It resurrects others. What has technology done to your business?
On the one hand
If I were the technology, I would become a behemoth. I would acquire all the struggling Internet Service Providers (ISPs). I would become a megamouth shark. I would consume everything in my line of sight. I would merge all the mushroom bloggers. Put them under my wings. I would buy out all the distressed broadcast stations. Small fries cannot survive in a shark-infested water. There is no gain in playing the leader of the little league. If I were the internet, I would become God.
On the other hand
Technology has helped the telecom sector. Contributed significantly to the country’s GDP. But the little cousin of the telecom sector is struggling. You may not understand what some businesses are experiencing if your business is not internet-dependent. Meaning: If you have not experienced discomfort occasioned by service outage from one ISP, if your livelihood is not dependent on the internet, you would not comprehend the severity of internet network disruption for 14 days.
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In the long term
The ISPs are experiencing tough times. They are running against time. It is a race they cannot win. They cannot win the race. Unless the unthinkable happens, that is, unless one of the telcos acquires a majority of the ISPs. There are 756 licensed ISPs. About 568 ISPs are out of business as of March 2022. About 188 are active or in a comatose state. The Nigerian ISPs sub-sector is struggling to stay afloat.
Before we go further, here is an experience: I visited one of the ISPs in the heart of Lagos. The company is a service provider of the highest ranking. But the office environment proved otherwise. The office was bare. No staff. From the reception, you could smell the despondency in the air. The reception area was empty. One employee attended to our 2-man team. Two women. Why women? To keep the lights on? To serve the remaining few customers until the bulbs burn out? To keep the brand ambling?
Anyway, the women did not smile. There was no time for that luxury. It was in the middle of the month. Do you understand? They were surprised that any customer could locate their office. It was tucked in the belly of Lekki. From Lekki, we stopped over at another address. Hidden in the bowels of Yaba. That was where we met these two unsmiling women. There was palpable distress on their faces. They made a call to one person somewhere. We spoke over the phone. We agreed. We left. The following day, we got a refund.
The ISPs are running under a harsh operating environment. They are contending with several factors. One of these factors is competitors. The telecommunications sector in Nigeria is a billion-dollar business. How can these tadpoles compete with the likes of MTN, Airtel, Glo, and T2?
Another hurdle is a lack of adequate funding. Without that, it is difficult to keep the lights on. No funding means no diesel. Some of the ISPs have to purchase from the black market to get electricity. No technological improvement. The ISP business is good. But running it is a challenge.
‘’I expect all that to clear off towards the middle of the second quarter. Once that clears, I think we are going to be fine, and business expectations will be good. Once the election is over, the Nigerian economy is going to boom,’’ one ISP operator shared his optimism. I do not share the same optimism. Do not ask me why. The why is staring at you. The ISPs are running against Starlink and others. How can they win the race? Help me if you can.
In the short term
The ISPs are competing against behemoths whose balance sheets are as big as the ocean. To win, take advantage of niche areas. Run fast. Go deep. Technology can solve the problems
*Olaegbe ([email protected])
