‘Nigeria is the Most Dynamic Market in Africa’

MR. ALEX DADSON is the Managing Director of Qualcomm West Africa, a wireless chip-set producing company which berthed in Nigeria barely a year ago. In this interview with SAMSON AKINTARO and TAIWO WILLIAMS, he x-rays the crucial roles of the company in the Nigerian telecom industry and of course in the West African sub region. Excerpts:

Question: Can you give us a broad view of what Qualcomm is doing in West Africa, and in Nigeria specifically?
We like to think of ourselves as technology partner for the entire Mobile telephony eco-system. We work with operators around the world and also work with OEMs. They are the ones who actually come out with the devices that use our chipset. We also work with distributors and retailers to get those devices in the hand of people. We believe that the work that we do actually makes a different in people’s life, thus, we have taken a keen interest in being part of the process by which our innovations gets to the market. Nigeria is our West Africa headquarters; we set up shop here in Nigeria because of the size of the market. In terms of just making an impact in telecommunications in West Africa, Nigeria is s big hub and from here we manage our business throughout West Africa. Now what is our business? Our core business as I have mentioned is to develop wireless solutions for the entire telecommunications sector. In particular, we are the leading producer of wireless chipset for CDMA and also 3G operators world-wide. We work with all the OEMs that you have heard about like Samsung, HTC, Sony Ericson etc. We also work with a host of OEMs that you may not have heard about. These are all our customers; we have very broad reach in this industry.  Besides the OEMs, we also work closely with operators, our innovations don’t come to life unless you have good network. So, we work with operators assisting them to shore- up their 3G networks such that when our  innovations arrive into the market in the form of devices be it Smartphone, feature phone, tablet etc, those devices will work well in the network environment that exist. We opened office here in Nigeria in 2010 September but prior to that we have actually been coming in and out of Nigeria for several years. But the growth of the industry was such that we actually decided to set up shop here in Nigeria. We consider ourselves fairly familiar with the business in Nigeria, the only thing is that we now have physical presence in the market.

In the last one year of your physical presence in Nigeria market what has been your experience?
We have had a wonderful experience. We have been an extremely welcome addition to the sector. We look at ourselves as a technology and vendor neutral player. We have been of assistance to the CDMA operators and we have also been of assistance to the 3G UMTS operator. 3G UMTS is essentially the 3G version of GSM. So, we have worked with all these operators assisting them with various issues relating to their networks. We have also assisted the operators in the channels with interesting devices that have been introduced in the Nigerian market place. We are especially excited about the progress we are making in bringing more smartphones to this market. Remember we don’t actually make the phones, we produce the chip that is in the phone and work closely with other companies like Samsung, Huawei etc and assist them to be successful with their devices in this market. A component of what we have done is training engineers on 3G technology, holding seminars, workshops and making sure that CTOs understands the technology evolution for whatever technology they have selected. If a 3G operator deploys HSDPA which is sort of an entry level 3G technology, we assist them on how to evolve that all the way to HSPA plus and beyond. These are technologies that give the user access to more and more data on their devices. Our goal in this past year has been to be of assistance to the operators, the OEMs and the distributors in bringing more value to the end users.

Are there any peculiar challenges found in Nigeria in the course of your operations here?
Not really, if anything at all the challenge is that there is a lot of work to be done and we need to scale up our business fast enough to actually do all that work. That probably is one of the challenges because the value that we produce is so much in demand and we think moving forward might be a good idea to grow our business so as to assist the eco-system a lot better. We have formed very good relationships with just about all the operators, we have excellent relationship with the OEMs and we are getting to know various partners in the eco-system and so far, so good. There is just a lot of work to be done.

You said Nigeria is the hub for West Africa, what informed the choice of Nigeria as your hub for West Africa?
Well, West Africa has a population of about 300,000,000 and half of them live in Nigeria. Three of the top ten networks in Africa are in Nigeria - MTN, GLO, Airtel are in the top ten of networks in Africa. What that means is that these networks are large, complex and interesting. They have the sort of problems and challenges that our engineers can’t wait to work on. We are very excited about being partners with operators like MTN. they have a 42 plus million subscribers and a network that is proportional to that number of subscribers and so the network embodies a lot of interesting technological items that we love to work on. We are close to Etisalat also, it is the new entrant in the 3G phase and they also have advanced HSDPA plus technology and we are working closely with them to bring the promise of telecommunications to this market. That has been quite exciting for us and besides that we are talking to Airtel and we have great relationship with the CDMA operators. Like I said, there is more work to do than we can handle right now.

Looking at the set of big operators that are on your clientele list, it appears you have the largest share of the market in terms of chipset solutions, what gives Qualcomm the edge?
We spend a lot of money on research and development, about $2.5 billion is spent each year on research and development. We take the process of innovations very seriously and coming out of that innovations are interesting technological capabilities which we try to get to the market through our partners. So, we now have for examples, gigahertz processors. We have a line of gigahertz processors branded Snap- dragons. These are essentially computers in their own rights with superior processing power and advance graphics capability and all the connectivity options. An innovative manufacturer or OEM put a design around our chipset the resulting product is really something valuable to the end user. When you look at devices from HTC, Nokia, Samsung, LG or Sony Ericsson, you can see the quality and these are all our partners, who have used our chipsets in their solutions.

Coming to technology there has been this argument about the future of CDMA, a lot of people say with the coming of LTE that CDMA will soon fade out. What is your own perspective on this issue?
We have a lot of fundamental patents in CDMA, we actually invented CDMA, and so, we are very passionate about it. In fact, the 3G version of GSM borrows technology from CDMA. You have heard WCDMA because it is actually related to CDMA. Thus; as far as technology goes we think it is wonderful. You have a number of operators who are doing some good work, they have some of the best data broadband offering available today and CDMA itself have a nice evolution pack all the way through LTE. So, LTE does not replace it necessarily but CDMA operators can evolve their networks all the way through LTE. And so can the GSM operators, they can evolve their 3G networks all the way through LTE so, LTE becomes a common meeting point for  the two technologies. I think all these technologies will co-exist; CDMA will live along side GSM which will live along side WCDMA and all its variance. And eventually as market forces detect, some operators will evolve their networks all the way to LTE. We have expertise along the entire value chain and we will be happy to see that evolution happen and we will be there to assist the operators to make it happen.

The year is almost running out, come 2012, what should we expect from the technology world that is new?
We will see more of what we saw this past year or the past two years. The 3G is here to stay and what is going to happen is that operators will be deploying faster and better versions of 3G. You will hear of things like dual carrier –HSDPA plus and this is the technology that enables 42 megabytes per second and we will start seeing faster, better versions of 3G in this Nigeria market that is on the network side. On the device side, we will see devices that are equally as capable in leveraging the good network to provide excellent services to the end users. So, I think we will see innovation on the network side and also on the device side and in the end, the end users will be the beneficiaries. They will have advanced devices and they will also have options of cost effective devices. There will be smartphones that are going to be less expensive than what you saw in 2011. The pricing for smartphones is going to keep dropping and adoption will pick up and overtime, I expect to see 3G penetrations in Nigeria rise in excess of 20 per cent. That will happen in the next couple of years.

You talked about improvements in 3G services, but presently, you will find out that even here in Lagos there are some areas that you cannot have that service. Are the operators really set to expand 3G service?
The way things works is that you first deploy your core network or you basic GSM that you use for coverage for a big geography as possible and then based on market need, you upgrade different areas with 3G. So, it could well be that in a short time an operator might have a better business case to deploy 3G in an urban area. Then we will see 3G coverage just popping up in areas where it makes business sense. But overtime, because 3G technology itself scales very nicely and has all sorts of efficiencies. It could well be that an operator reform some of their spectrums like their 900MHZ spectrums and then deploy 3G even in the rural areas bringing them the efficiency of the technology and also access to data connectivity. The upgrade of 3G will happen gradually and same thing will happen when LTE becomes commercially visible in this market. On day one, an operator is not going to deploy LTE widely rather they are going to choose certain strategic areas that make business sense to them to deploy their LTE. Then over time, they will feel in the various gaps. On the device side, we are creating dual mode devices that understand LTE and 3Gand devices that understand 3G and GSM etc. We are just making sure that all the options that will exist in the market place will also be reflected in the devices.

What is your assessment of the Nigerian telecom market in the last few years? 
I think this is probably the most dynamic market in Africa and I will say that even in the emerging markets, this is one of the most interesting markets that we have ever seen. In Just ten years, Nigeria has come from low single digit to close to a hundred million subscriptions that is unprecedented. The growth rate that represent is stunning. We have already seen reports that Africa is the second largest mobile telephony market and the leader in that market really is Nigeria. The size of Nigeria‘s mobile business overtook that of South Africa in 2008. The contributions that mobile telephony is making to the GDP of this country has already been recognized by the leadership of this country that is why there is a dedicated a ministry looking for deployment of ICT in the country. It is a dynamic market and all the latest technologies are already being deployed here. There are also very capable devices in this market place; you have some very cost effective devices, more advanced devices for the premium user all present in the Nigerian market. Then of course, the users themselves are moving from just doing voice and SMS and beginning to download Apps in the Nigerian market, messaging has been very big ad internet access over mobile devices is only going to increase in this market. So, when you look at all those dynamics, this is a very interesting market to be in technologically and commercially for several years to come.

Back to Qualcomm, you have just operated for just one year in Nigeria, where do you see Qualcomm in the next five years in Nigeria?
Like I said, we launched our office in September 2010, prior to that for many years we have been coming in and out of this market looking for different strategic opportunities and once we established a physical presence here, we had to develop both a short term strategy and a long term strategy. Our short term strategy is to assist in stabilizing the networks in Nigeria. We are technological experts good at this stuff and we are making our expertise available to any operators who will work with us.   We will assist in trouble shooting their networks, work with them in optimisation of these networks and do networks performance audits etc, these are all very critical services that any modern network needs to go through. So, in a short term, we seek to build relationships with the networks and stabilize those networks. In the longer term, we want to make sure that the operators keep up with technological evolution. Remember, mobile network in Africa are going to have to do more than mobile networks abroad. In the United States and Europe, they have many parallel networks like cable TV networks, fibre networks, fibre to the homes and copper wire networks etc. We don’t have any of those but only the mobile networks, so, that mobile network has to essentially bring us all the experiences that in other countries are provided by different parallel networks so our networks actually have to be the best in world. It will help us with our internet connectivity, access to news and information to run our lives, help us be more productive.  Productivity is very important, that is where telecoms impacts GDP. So it is extremely important. It will become a source for solving the shortage of educational facilities. We hear a lot about e-learning and distant learning, in Africa that has to become real because we don’t have enough schools and teachers and we have to leverage technology to solve the education problem. There are so many examples of things that the mobile network needs to enable. Those networks have to be very robust and amongst the best in the world and that is what Qualcomm is here to do in the long term. We are here to ensure that the African networks are amongst the best in the world so that we can deliver all the services that in all the other countries happen on multiple networks. All that can happen on the mobile network.

On a lighter note, who is Alex Dadson?