Business Process & Strategy for Fibre Optics Nigeria

8/6/2019 Business Process & Strategy for Fibre Optics Nigeria

1/25

Business Process & Strategyfor Fibre Optics

in Nigeria

2010


2/25

Executive Summary

The need to enhance information dissemination in this century has necessitated the

introduction of the Fibre Optics Technology in different parts of the world.

In Nigeria, the market is ever increasing with major players offering Fibre Optic

backbone infrastructures to companies both in the Telecommunications and Internet

Service Provision markets.

The Fibre Optic business process involves offering Fibre-to-the-home (FTTH) as against

the Fibre-to-the-Node Technology (FTTN).

In addition to offering fast broadband technologies to customers, other additional

services could be offered ranging from Connectorization to Fibre Optic Lighting.

The need to offer good returns on investment to customers necessitated this proposal.


3/25

Table of Contents

Page (s)

Executive Summary

Introduction 4 - 7

Business Process 8 12

- Business Process Market Analysis 13 - 15

Strategies 16 - 24

Conclusion 25


4/25

Introduction

Nigeria is one of the biggest and fastest growing telecom markets in Africa, attracting huge

amounts of foreign investment, and is yet standing at relatively low levels of market

penetration.

Far reaching liberalization has led to hundreds of companies providing virtually all kinds of

telecom and value-added services in an independently regulated market. After failing threetimes in the past, the privatization of NITEL, the incumbent national TELCO, is scheduled to be

finally completed in 2010.

The West African country has overtaken South Africa to become the continents largest mobile

market with now over 75 million subscribers, and yet market penetration stands at only

around 50% in early 2010.

However, subscriber growth slowed significantly during 2009, partly as a result of the globaleconomic crisis. Much of the remaining addressable market is in the countrys rural areas

where network rollouts and operations are expensive.


5/25

This in combination with declining ARPU levels which is forcing the networks to

streamline their operations and to develop new revenue streams from services such

as 3G mobile broadband, mobile payments/banking, and others.

At the same time the operators are rolling out national Fibre backbone networks tosupport the ever increasing demand for bandwidth.

Nigeria is also the most competitive fixed-line market in Africa, featuring a second

national operator (SNO, Globacom) and over 80 other companies licensed to

provide fixed telephony services.

The alternative carriers combined now provide over 95% of all fixed connections,

the majority of which has been implemented using wireless technologies. This gives

the network operators the opportunity to also enter the lucrative mobile market

under a new unified licensing regime and has helped them to secure hundreds of

millions of US$ in investments from local and foreign investors.

Introduction contd


6/25

Nitels monopoly on international fibre bandwidth via the SAT-3/WASC submarine

cable system ended in 2009 when Globacoms Glo-1cable landed in the country.

While in 2010, Main-one cable also landed in the country with promises of providing

quality services to clients across the country. Additional submarine cables arescheduled to go online in 2010 and 2011.

This is set to revolutionize the countrys underdeveloped Internet and broadband sector

by reducing the cost of international bandwidth by up to 90%. New powerful players

from the fixed-wireless and mobile network operator camps have entered this market

with 3G mobile and advanced wireless broadband services such as WiMAX.

The IP-based next generation networks currently being rolled out are enabling

converged voice, data/Internet and video services. VoIP is already carrying the bulk

of Nigerias international voice traffic. Applications such as e-commerce, online banking

and e-payments, e-health, e-learning and e-government are rapidly evolving.

Introduction contd


7/25

For the different entrants into the market, the need to have quality business process

flow is key to the overall success of the business in view of the nature of the market

in which they operate.

It is in view on this, that this proposal initiative was hatched to identify the following:

The Fibre Optics Business Process

The Market Analysis

- The key players and USPs (Unique Selling Points)

The Strategy for Success

Introduction contd


8/25

BUSINESS PROCESS

How Does it work?

Fiber optics use light as a method of encoding a transmitted signal. A standard fiber optic link

consists of three parts, which includes a light source, optical fiber as the primary transmissionmedium, and a transducer (receiver/detector).

The light source is a Light Emitting Diode (LED) or laser. The LED modulates an incoming

electrical signal into an optical signal. The optical fiber consists of two layers of different types

of glass surrounded by a protective acrylate coating.

The light is guided through the core region where it is detected at the receiving point. At the

receiving end, the transducer converts the optical signal back into an electrical signal. Fiberoptics technology transmits information by changing electronic signals into light signals.

Fiber optics are used in three distinct communication environments, namely, long-carriage inter-

exchange telephone communications, in combination with coaxial cable to serve as the

backbone for modern cable television systems in a configuration referred to as hybrid

fiber/coax, and fiber optics used in local area networks for data distribution.


9/25

In relation to types of fiber optics, there are two types, namely, multi and single mode. The

multi mode has a larger core than that of the single mode.

The multi mode allows hundreds of modes (rays) of light to go through the fiber at the same

time. It is worth noting that multi mode fibers are ideal for short distance applications or local

area networks where the links are usually less than three miles in distance and can

accommodate many connectors.

A single-mode fiber has a smaller core that allows only one mode of light at a time topropagate through the core. Single mode fibers are designed for a long distance application

such as long carriage telephone trunk line applications that require high bandwidths.

Advantages of Fiber Optic Systems over other Transmission Media

The use of Fiber optic technology has certain distinctive features over other means ofcommunication. In terms of broad bandwidth capability, fiber optic systems offer users more

potential bandwidth than any other type of transmission medium. An actual fiber strand is a

few microns wide in diameter, or the equivalent of 6/1,000s of inch thick.

When bundled together in a duct or passageway, the combined bandwidth provides morethan sufficient capacity for most voice, data and video applications.

Business Process contd


10/25

This means that fiber optic cables are capable of transmitting very large volumes of data, audio

and other multi media applications when compared with copper wire with dial-up connection.

In addition, the fiber optics cables offer room for future expansion at minimal extra cost and

without the need for excavation or construction and laying of new cables.

This is also an advantage for telephone communications companies looking for continued steadygrowth in the types of services they offer and demand for more subscribers.

Fiber optic systems are not prone to electromagnetic interference as are telephone twisted pairwires, coaxial cables and satellite. This is because the transmitting medium is non-magnetic.

Thus, the fibers cannot pick up electromagnetic interference from generating plants, electric cables,and other sources of high electricity voltage lines.

Fiber optic cables are robust and durable. They are also resistant to extremes in weather and

temperature. Due to their flexibility, they are ideal for installation in places like subway routes,culverts, elevator shafts or any aerial conditions. Furthermore, fiber optics cables can achieve

higher speeds for voice data and video transmission than any other transmission medium. Modernmultimode fiber cables can transmit at speeds between 100Mbits/s and 622 Mbits/s depending

on the transmission.



11/25

Fiber optics cables do not emit radiation; therefore they do not interfere with other media.9

Unlike the satellite, telephone or cable connection, a broken connection which are wire tap can

be detected within a few inches. Thus, if there is any damage on the system it could easily be

found and repaired.

In terms of cost of production, fiber cables are inexpensive. One of the reasons for this is thatthe primary source of raw material is sand.

Furthermore, fiber optic cables tend to be lighter than other telecommunication cables. Inaddition, fiber optic cables allow transmission of signals over long distances with few

amplifiers. Within this medium attenuation is very low.



12/25

The Fiber Optic initiatives in Nigeria have the prospects of providing viable and sustainable

broadband networks, especially in cities along the coast.

The fibre optic initiatives will also provide opportunity to businesses and other multinational

corporation to have reliable broadband connectivity in the event of service interruptions or any

adverse weather effects that can cause damage to satellite dishes or terrestrial antennae.

Furthermore, the linkage will also go a long way in safeguarding Nigerias telecommunication

infrastructure by catching up with developed world.

The following business strategies are proposed in addition to the present available Fibre Optic

services presently offered.



13/25

Business Process Market Analysis

Significant consolidation has occurred in Nigeria's Internet and broadband sector in the past

year, from over 400 ISPs to around 150. New powerful players from the fixed-wireless and

mobile network operator camps have entered the market with advanced wireless

broadband High-speed wireless transmission of data.

Nigeria is the most competitive fixed-line market in Africa, featuring a second national

operator (SNO, Globacom) and over 80 other companies licensed to provide fixed

telephony services. The alternative carriers combined now provide over 95% of all fixed

connections while the ailing incumbent, NITEL, is looking for a new strategic investor and newbusiness models to turn the company around.

The majority of fixed lines has been implemented using wireless technologies, which gives the

network operators the opportunity to also enter the lucrative mobile market under a new

unified licensing regime and has helped them to secure hundreds of millions of US$ in

investments from local and foreign investors.


14/25

Several microwave and fibre-based national backbone infrastructures are being rolled out by

various companies. NITELs monopoly on international fibre bandwidth via the SAT-3/WASC

submarine cable system ended in 2009 when Globacoms Glo-1 cable landed in the country,

which will also deliver a boost to the countrys underdeveloped Internet and broadband sector.

Early in 2009, Ericsson signed the deal with Nigerian telecom company 21st Century Technologies

was signed in the end of 2008 and deployment to the first 10,000 homes started.

The contract covers the entire spectrum of supplying, building and systems integrating a

nationwide residential fiber-optic broadband network in Nigeria. It also includes the latestGigabit-capable Passive Optical Network (GPON) Fiber-To-The-Home (FTTH) technology,

enabling advanced high-speed broadband services.

The FTTH network will provide high-quality broadband connectivity and services such as IPTV,high-speed internet access and voice-over-IP.

In the second quarter of 2010, Main-One Cable also came on stream. The submarine fibre optic

cable is 7000 kilometres long and a 1,920Gbps capacity that connects West Africa to Europe..



15/25


With landing stations in Nigeria and Ghana and branching units in Morocco, Canary Islands,

Senegal and Ivory Coast, the cable is expected to deliver broadband capacity to West

Africa, more than 10 times what is currently available.

With its cable system now turned on, Main One is poised to champion a communications

revolution in Africa, impacting businesses, governments and individuals by providing higherbandwidth and exceptional speeds at a lower cost.

The ramifications of Main Ones cable is expected to be felt in all sectors: from education, to

health, to entertainment, helping to drive economic growth and creating job opportunities all

over Africa.

Most Telecommunication companies are presently subscribing to these fibre-optic backbones to

offer services to their teeming subscribers.


16/25

Strategies

In achieving the required margin in this business, the following strategies could be adopted to

provide the required ROI.

As the global demand for broadband access continues to rise, service providers around the

world are accelerating their deployment of fiber networks, from fiber-to-the-node all the way

to fiber-to-the-home (FTTH) installations. In Nigeria, subscribers' appetite for bandwidth is just

as voracious as that of people in other nations.

A. Connectorization - Offering services to other Fibre-Optic Services

Service providers want to install flexible and reliable FTTH architectures at the lowest possible

cost, and they must make several important decisions, among those decisions is how to connect

the various fiber segments--feeder, distribution and drop--which carry the signal from the

central office to the subscriber premises.

The choice is to use splicing or a connectorized (plug-and-play) approach for the optical

splitters in distribution frames, fiber distribution hubs (FDHs) and distribution boxes. For many

service providers, it has been easier, at least initially, to build a business case for splicing.

Although that approach is more labor-intensive than the use of connectorized terminations,

labor rates in many nations, including Nigeria, are extremely low relative to other countries.


17/25

Further bolstering the early arguments for splicing was the fact that network architects who

designed some of the early FTTH deployments discovered that connectors experienced more

loss than occurred with straight splicing. To minimize their loss budgets, they decided that

splicing inputs to the splitters was preferable.

Unfortunately, splicing fiber to the splitters has created its own set of problems, starting withthe amount of time required to install each splitter. In addition to taking considerably longer

than mating two connectors, splicing affects the work force: the addition of each new splitterrequires the dispatch of trained, highly-skilled technicians who need specialized splicing

equipment.

If one or the other is not readily available, the time required to perform the task increases

and thus slows down the overall deployment. The initial turn-up of the cabinet gives rise toanother splicing-related problem.

To test all the fibers, a technician must splice pigtails to connect each input to the test

equipment. Splicing on pigtails and cutting them off again after testing consumes a greatdeal of time during initial turn-up, which could prompt some technicians to test the fibers

through the splitter or to not test them at all.

Strategies


18/25

Both practices can reduce the network's performance and reliability. In addition, because testing

the splitter requires a technician to splice a connector to the splitter's input, testing both the fiber

and the splitter requires a technician to break a splice; splice connectors to both the fiber

and the splitter; run the tests; cut off the connectors; and re-splice the fiber to the splitter input.

Clearly, this multistep process costs a great deal of time and money.

Although money is obviously a major concern for cost-conscious service providers, time to marketis a big factor, too. Subscribers in Nigeria, like subscribers in most areas of the world, are

pushing for high-speed access and the additional bandwidth they need to support theirapplications.

Strategies


19/25

Strategies

Benefits of Connectorization

Delivers lowest cost of network ownership

Allows for flexibility to meet future network requirements Electronics/Technology upgrades

Delivers faster return on capital Connectorized architectures allow faster network construction, positively impacting

internal return on capital metrics.

Enables carriers to avoid unnecessary capital costs

New FTTP markets may not have to purchase capital equipment (splice machines) to

deploy.

Aligns expenses to revenueDrop placement can be deferred until customer turn up.


20/25

Strategies

B.

1. Fiber Characterization - Fiber optics for telecommunications have been in wide use sincethe mid- 1980's through NITEL. Lots of fibers in the ground need to be certified for higher

speed transmission (OC-192, OC-768).

- Measure Chromatic Dispersion- Polarization Mode Dispersion

- Link Loss

- Return Loss.- Provide full test documentation to fiber users.

2. Monitoring - Many fiber optics users would like to monitor their systems but don't want topurchase the monitoring equipment (RFTS). Some contractors have begun monitoring optical

fibers for others (banks, hospitals, airlines, etc.)They bundle this service with rapid repair in

the event of a system or fiber outage.


21/25

3. OSP Construction - many telecommunication (Telcos) companies have reduced headcount to

the point that they are having difficulty repairing damaged fiber optic routes in a timely

manner.

The NCC has strict reporting requirements for major outages and the Telcos are sensitive to the

adverse publicity from such events. In addition to monitoring and repair services new buildsmay be contracted out.

4. Plant Upgrades - significant upgrades will be needed before some fiber routes can carry

higher bit-rate signals such as OC-192. These upgrades must be preceded by

characterization tests.

Strategies contd


22/25

C. Fibre Optic Lighting

Fibre optic lighting covers a wide range of things. It can be divided into two distinct sub-sections,

one is home/commercial lighting, this is for general purpose lighting. The second is for decorative

lighting.

Fibre optic lighting is an interesting and relatively new technology. It uses less energy than mostother light sources, making it greener. They also tend to last far longer than traditional lighting

fixtures. However, it does tend to cost more money upfront.

Fiber Optic lighting is the technology of transmitting light from a universal element (illuminator)

via an acrylic cable solid or standard core) to a fixture or feature.

Fibre optic lighting does not heat up like most other light sources. It consistently stays cool.Because of this, fibre optic lighting is great for things like commercial freezers or museums,

where the items being lit cannot get too hot or they will be damaged. This light also does not

fade objects at all.

Most other lighting sources use an ultraviolet light which emits harmful rays. Fibre optic lighting

uses a bright white source, making it safer to use in the home and in a business.

Strategies contd


23/25

This lighting also works well outside or in wet/damp places. It will not shock or electrocute you

like electric lighting.

It is important not to confuse fiber optic lighting with services like Verizon FIOS, which uses a

different type of fiber optics, in a cable form.

Utilitarian fiber optic lighting: Residential Fiber Optic LightingThere are many uses for fiber optic lighting within the home. It gives a very unique look for

interior spaces. The light given off from fiber optic lighting is generally described as a glow. It

is not harsh, but soft, white light, which allows you to see comfortably. These also will save time

and money as they last forever and need little maintenance.

Fiber Optic Chandeliers

These are a great combination of both utility and decoration. Although these can easily light up

a room, they are generally used to enhance a space. This is due to the color changing abilitiesthese have. It is very eye-catching to have a chandelier which changes colors nice and slowly.

This will make a home or business something to remember.

Strategies contd


24/25

Decorative fiber optic lighting sources: Fiber Optic Lamp

This is probably the form of fibre optic lighting which most people are familiar with. These

can be found at many specialty stores and many people keep them in their homes as adecoration. The fiber optic lamp usually has the ability to change colors slowly, which can

give a room a great feel. These lamps come in a range of colors (or multi), and the lightingimplements are usually LED (light emitting diode).

Fiber Optic Table Lamp

The fun of a fiber optic lamp, on the table! These are available in many different colors, plus

the color changing ones. They are available in both battery operated and plug-in models,

sometimes both. These are generally inexpensive. Most of them feature hundreds of opticfibers which extend out from a base, creating a fan-like shape which lights up and changes

colors. Some of the bases also include clear crystals which react to the light and add to theshow.

Strategies contd


25/25

Conclusion

The need for fast internet service to enhance information dissemination and other basic human

activities necessitated the development of the Fibre Optic technology in the early 1980s.

In Nigeria, the introduction of the Fibre Optic business by Telecommunication companies to

provide broadband access as against the dial-up system has made Nigerian companies to

imbibe this technology to satisfy the ever-increasing need of its subscribers for information

dissemination.

This Strategy document has examined three different business categories that a Fibre Opticcompany can tap into to provide the required Returns on Investment (ROI), namely,

Connectorization, Fibre Optic Repairs and Fibre Optic Lighting.

These services are relatively new in Nigeria and will basically improve the earnings of an

existing Fibre Optic company and also of new entrants into the business.

These services are in addition to the general broadband access options presently offered bythese companies.

Documents

Business Process & Strategy for Fibre Optics Nigeria