Ohuabunwa: Nigeria can make N1.2 trillion from digital broadcasting

Ohuabunwa: Nigeria can make N1.2 trillion from digital broadcasting

Ohuabunwa: Nigeria can make N1.2 trillion from digital broadcasting

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Godfrey Ohuabunwa Chairman, Set Top Box Manufacturers Association of Nigeria (STBMAN) believes that over N1.2 trillion can be unlocked from digital broadcasting switch over underway in the country.

Ohuabunwa, who also doubles as the Chairman Multimesh communications says that sales of spectrum channels alone can service 50 percent  of the country’s annual budget deficit.

Nigerian government should  expects at least N1.260 trillion from issuance of licenses with the vacation of analogue frequency spectrum by industry operators.

Technology Times review shows that  Federal Government revenue projection for this year’s budget was put at N3.855 trillion, leaving a fiscal deficit of N2.2 trillion which translates to 2.14 per cent of GDP.

”I want government at all levels to key into the laudable project because of the dividends to Government in terms of increased revenue through the sale of at least 21 spectrum channels at $200m x 21 $4.2 billion or approximately N1.260 trillion that can service 50% of the budget deficit.”

Lai Mohammed, Minister of Information and Culture (left) and Godfrey Ohuabunwa, Chairman, Set Top Box Manufacturers Association of Nigeria (STBMAN) during an inspection by the inter-ministerial team in Abuja
Lai Mohammed, Minister of Information and Culture (left) and Godfrey Ohuabunwa, Chairman, Set Top Box Manufacturers Association of Nigeria (STBMAN) during an inspection by the inter-ministerial team in Abuja

Ohuabunwa  envisions that beyond the revenue potentials, the Digital Switch Over (DSO) will open up new opportunities for the broadcast, entertainment, broadband and other sector of the nation’s economy.

Ohuabunwa explains  how the Nigerian broadcast regulator is implementing digital migration switchover mandated by the International Telecommunications Union (ITU), the UN specialised agency that oversees frequency spectrum across the world, will change the communications ecosystem.

”I want government at all levels to key into the laudable project because of the dividends to Government in terms of increased revenue through the sale of at least 21 spectrum channels at $200m x 21 $4.2 billion or approximately N1.260 trillion that can service 50% of the budget deficit.

”On Internally Generated Revenue it is also anticipated that it would be increased through  the Payment of Digital Access fee and TV license approximate N5,000x 60m subs = N300 billion  per annum and may come up to N1.2Trillion in 4years, on VAT, Payee, Exercise and Customs it will be close to N110 billion”, he adds.

According to him, more jobs would be created and over 10,000 direct jobs and another 50,000 indirect emanating from 13 new Set Top Boxes (STB) factories, outside new TV stations, productions and value added services.

According to  Ohuabunwa, ”what really delayed the Digital Switch Over (DSO) was that there was no fund. The government of Nigeria did not provide funding after the White Paper. The question is what do you need funding for? The critical position is that in every economy and country that has gone from analogue to digital.”

Magic box: The STBMAN Chairman says that TV Set Top Boxes (seen in photo) can create over 10,000 direct jobs and another 50,000 indirect emanating from 13 new Set Top Boxes (STB) factories, outside new TV stations, productions and other value added services in the digital broadcasting ecosystem in Nigeria.
Magic box: The STBMAN Chairman says that TV Set Top Boxes (seen in photo) can create over 10,000 direct jobs and another 50,000 indirect emanating from 13 new Set Top Boxes (STB) factories, outside new TV stations, productions and other value added services in the digital broadcasting ecosystem in Nigeria.

For several years, Nigeria’s international obligation to transit from analogue to digital broadcasting, had been stalled owing to lack of funds, as successive governments failed to appropriate necessary funding for this very crucial national development programme.

Mr Emeka Mba’s immediate past Director General of Nigeria Broadcasting Commission (NBC) hope of accomplishing the Digtal Switch Over (DSO) task by June next year, was hinged on the level of work already carried out, following the N34 billion funding that the commission had raised from the licensing of 700MHz frequency slot to MTN to assist in the completion of the digital migration, he said.

Mba claimed that, the broadcast regulator had received approval from the Federal Government to raise money to fund the digital migration process, since the government was unable to release the substantial amount required for the funding.

Ironically, the same N34 billion that was raised from the licensing of MTN to fund the DSO, actually led to Mba’s removal as DG of NBC.

According to  Ohuabunwa, ”what really delayed the Digital Switch Over (DSO) was that there was no fund. The government of Nigeria did not provide funding after the White Paper. The question is what do you need funding for? The critical position is that in every economy and country that has gone from analogue to digital.

”When the funding came through the very innovative action of Emeka Mba, the former Director General of the  NBC, was able to acquire, sell one of the frequencies and raise the $170 million which is about N34 billion”, Ohuabunwa added.

He says that, “out of the amount, N15 billion was set aside for purchase of about 1.5 million boxes. The rest is story. We all know about what happened to the N15 billion, EFCC seized that money but thank God, now the money has been released by the Federal Government which showed that there is transparency and that people are working well.”

Ohuabunwa believes that ”the real challenge is this. For Nigeria, there are above 60 million TV households. In a more conservative approach, NBC has chosen 30 million. That means there are 30 million houses that need Set-Top Box. Bear in mind that the digital migration has two parts, you have switch off. The original plan is that in 2017 we should switch off not switch on.

Ohuabunwa believes that ”the real challenge is this. For Nigeria, there are above 60 million TV households. In a more conservative approach, NBC has chosen 30 million. That means there are 30 million houses that need Set-Top Box. Bear in mind that the digital migration has two parts, you have switch off. The original plan is that in 2017 we should switch off not switch on.

”This is November 2016, we have only done, barely two states. The challenge in finding on our own part as individuals as a company, is in procuring foreign exchange. We are lucky to have raised loans from Bank of Industry. As I speak today, some of the letters of credit (LC) raised four months ago, there is no foreign exchange to fund them.”

Explaining further, Ohuabunwa said that when they applied for the loan from BOI, which was early last year, “the money we were asking from BOI was about $3 – $4 million. By the time BOI was ready, that money can only provide less than a million dollars.”

On the benefit to the ICT and broadcast industry, he believes that there will be  available spectrum and frequencies for triples play for telcos, increased Nollywood film production by over 100% as contents will be the feed stock for the new licensed TV channels.

”If Government collect the 36 frequencies and sell it for $170 million, multiply it and know how much that means in the economy. That will fund more than 10 percent of the N6 trillion budget. It will create jobs. Our factory when in full swing will be employing about 1,500- 2000 people. We are 11 companies licensed and when you multiply 2,000 into 11 places you will see the number of people that we will employ direct employments of electrical, electronics, computer engineers”, says the Chairman of TV Set-Top Box makers in Nigeria.

Technology Times Photo showing Alhaji Lai Mohammed, Minister of Information&Culture at an event in Lagos
Technology Times Photo showing Alhaji Lai Mohammed, Minister of Information&Culture at an event in Lagos

According to him, the government from all information and body language shows that ”there is a lot of seriousness and I must commend the Minister of Information Alhaji Lai Mohammed for his seriousness, doggedness. He has shown leadership. I am not a politician but I must be honest that he has shown seriousness to make sure that the DSO survives. But he has limits. He has made all the efforts, but he does not bring the money. He fights, he talks, he pursues but the money doesn’t come from him. That becomes a challenge. We feel for him.”

Commenting of if Nigeria could meet up with the June 2017 deadline Ohuabunwa adds that ”there is a possibility that by June 17, 2017 the entire Nigeria landscape can be covered. I doubt if we can switch off on that day because you know Nigerians don’t want to buy till the day is over. Due to Nigerian factor, which may not be government, Nigerians will want to wait till that date to buy the boxes.”

He said that ”if we must meet this date, as I speak to you, government at all levels particularly the State Government must begin to run. What we are doing is to tell the state government is that they should not allow the Federal Government anymore. Each state government should come forth and acquire these equipment for their states. If they are waiting for the Federal Government, Federal Government cannot subsidise it all.

”The strategy that works now is for the State Government to subsidise for their states. Actually, as I speak today, the TV licence fee is still with the Local Government. You know that one of the beauties of that is that the box will enable the Local Government to collect the TV license fees without standing on the road and fighting people. I think that if they are going to collect the money, the best way is for State Governments to take it over because they are going to make money from the box.”

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