Using broadband to stimulate SMEs growth in Nigeria

(By Sylva Nze Ifedigbo) 

It is a known fact that one of the key requirements for any successful business is the ability to communicate effectively and efficiently especially in this digital age. Anything that can speed up the rate at which communication takes place improves radically the output from any business endeavour and enhances the efficiency with which business processes are carried out. This is the whole new vista of opportunity that broadband technology offers us.

Broadband and businesses

The 2009, World Bank Information and Communications for Development report showed that access to broadband boosts economic growth in all countries, but most especially in developing ones. The study showed that in developing countries, for every ten-percentage points of broadband penetration, their economies grew by 1.38 per cent. The report, conducted in 120 countries between 1980 and 2006, showed that developed countries’ economies grew by 1.21 per cent.  The figures confirm that broadband access is key for economic growth and even more vital in developing countries. Many Africans are seizing the opportunity that it offers to move their economies forward.

In the same way that the construction of electricity grids and transport links spurred innovation far beyond the dreams of their builders, high-speed broadband networks stimulate greater efficiency and the advancement of businesses.

The 2010 U.S. National Broadband policy document captures it even better when it states: “Broadband is the great infrastructure challenge of the early 21st century. Like electricity a century ago, broadband is a foundation for economic growth, job creation, global competitiveness and a better way of life. It is enabling entire new industries and unlocking vast new possibilities for existing ones. It is changing how we educate children, deliver health care, manage energy, ensure public safety, engage government, and access, organize and disseminate knowledge.”

It is a known fact that one of the key requirements for any successful business is the ability to communicate effectively and efficiently especially in this digital age. Anything that can speed up the rate at which communication takes place improves radically the output from any business endeavour and enhances the efficiency with which business processes are carried out. This is the whole new vista of opportunity that broadband technology offers us.

Broadband gives you a high-speed, ‘always-on’ connection to the Internet, which is typically at least 10 times faster than regular Internet connections. Besides being fast, it is highly cost-effective and provides consistency and reliability. It can save you time when using email and the web, thereby helping your staff to become more productive. In addition, it allows you to build online links with customers and suppliers, as well as with off-site and remote workers.

The term ‘broadband’ is used to describe any high-speed connection to the Internet with speeds starting from at least 1mbps.

More than just speed

While it is generally thought that the principal advantage of broadband is increased speed of access to the Internet when it comes to business and small businesses in particular, it is not simply speed that offers the advantage, but more the way in which greater speed allows companies the flexibility to change existing practices. The real value of broadband is the way it enables SMEs to make use of new services and applications that are available via high-speed Internet. Such services include e-commerce, remote working, cloud sourcing, real-time video conferencing, social media marketing and Internet telephony amongst others.

In addition to increased business efficiency and competitiveness, broadband is allowing individual workers much more flexibility in how and where they work. People are now able to work remotely from home or anywhere there is a high-speed Internet connection, which leads to a better work-life balance and a happier, more productive workforce.

In specific terms, SME’s can benefit from broadband in the following ways: Increasing efficiency as seen in the ability to streamline business processes, automate various tasks such as transaction processing, ordering, delivery and the monitoring of same. For example you could link your online shop with your accounting and stock control system to cut cost and improve efficiency.

Broadband can help your business become more flexible and more able to adapt to your staff, customer and supplier needs.     For example, you can use broadband to set up VPNs (virtual private networks) that allow off-site and remote workers access to your network. Greater collaborative working and video conferencing may be possible, which could reduce courier and travel costs.

Broadband brings business owners closer to their customers and suppliers. It allows businesses offer customers round-the-clock access to accounting information, order status, project details and also offers them prompt response in case of complaints that may arise.

High speed broadband connections would enable SMEs to connect to ‘cloud computing’ services. These are applications or tools that are stored on an Internet server and can be accessed as and when a business needs them; a far cheaper option for SMEs.

However, businesses need the guaranteed higher bandwidth, speed, reliability and security of next generation connectivity, to fully exploit the possibilities of cloud computing.

Social media has irrevocably changed the way brands interact with consumers online. The open, egalitarian nature of social networks such as Facebook and Twitter has given customers a voice and has made companies more accessible than ever. With over a billion people active on various social media sites regularly, the term ‘target market’ takes on an entirely new meaning. Social media helps your brand reach millions of people, it also helps you monitor what your clients are saying and responding to them real time. Online channels also allow for immediate call to action and with online payments becoming the order of the day, it allows businesses to make sales.

Broadband development in Nigeria

In Nigeria, broadband has the potential to help diversify the economy through the growth of online services in industries including retail, financial services, healthcare, education and agriculture.

A recent report by Analysys Mason for GSMA indicated that mobile broadband could potentially contribute over one per cent of GDP (and 1.7 per cent of non-oil GDP) in 2015, and could support the much sought after diversification of the economy.

The report also highlighted the country’s current low broadband penetration rate, which indicated that only six per cent of Nigerians have access to broadband services, and 74 per cent of those do so through their mobile phones.

However there has been some increased activity in the broadband space with the arrival of marine cables such as Mainone, and Glo1 and the change in focus by many operators from voice to data. Also, new operators are deploying all IP WiMAX networks across the country with some other already muting their desires to roll out the advanced 4G Technology, LTE.

All these activities are sure to increase the broadband penetration rate and by 2015 it is expected that broadband alone will contribute at least five billion dollars to the nation’s Gross Domestic Product.

For example, the country’s online retail industry could grow by 55 per cent a year to reach N44.9 billion in 2015, from N4.5 billion in 2010. On the other hand, the financial services sector could be expected to grow by 95 per cent CAGR to N16.8 billion in 2015, up from N0.6 billion in 2010, as a result of mobile access to bank accounts and money transfer services, according to the report. The use of the Internet and mobile devices to deliver social services, including healthcare and education, would generate growth of 70 per cent CAGR, to reach N30.3 billion in 2015.

As exciting as these figures are, such economic gains, however, depend on a positive environment created by all stakeholders that addresses the challenges to broadband development in the country chief among which is the availability of infrastructure especially in the rural and underserved areas, a positive improvement in the power situation as well as the provision of grants to broadband companies to aid their operations.

It is hoped that with the recent pronouncements of the leadership of the Nigeria Communications Commission and the Ministry of Communications Technology, as well as the recent inauguration of a Presidential Committee on Broadband, Nigerians should expect a more rapid development of broadband infrastructure in the country so as to increase access and enable more small businesses benefit from the world of opportunities which broadband offers.

• Ifedigbo, a writer and PR practitioner, wrote from Lagos.

“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”

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