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Would Africa Benefit from Leapfrogging from 3G to 5G Bypassing 4G?

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By Olayinka Oduwole

I was recently asked the above question by a superior colleague and friend who wanted to know if Africa would benefit from a leapfrog from 3G to 5G. This question was borne out of a previous discussion that had to do with Turkey leapfrogging from 3G to 5G. Simply put, Turkey arrived at the 4G party late and its president, Tayyip Erdogan, was of the stance that Turkey should not waste time deploying 4G technologies to avoid becoming a dumping ground for 4G technologies. The president, however, softened his stance, as 5G regulations and standards were yet to be developed. This led Turkey to instead leapfrog from 3G to 4.5G; 4.5G would then serve as a bridge to accelerating its 5G deployment. So, my friend wanted to know if Africa could replicate such model, knowing that 5G deployments would take longer, as highlighted in GSMA’s report and a previous article.

From my understanding, I think the answer is not in the affirmative. China and the US are some of the leading players within the 5G space. And operators in these countries seem to believe that the commercially viable option is to gradually transit from 4G to 5G. Even as these operators plan to begin rolling out 5G in 2020, they intend to achieve 5G deployment using non stand-alone sites, which involve the use of 5G New Radio (NR) in conjunction with existing 4G core. This is a cheaper and faster route towards the deployment of 5G. This would hopefully give them time to assess the success and failure, and hopefully recoup some investments. By 2023-2025, these operators would then start investing in the development of 5G new core, and then successfully transit to stand alone 5G sites, which requires huge investment.

Generally, in Africa, operators are in the process of transiting from 3G to 4G, and deepening their 4G capabilities within the region. Most 5G use cases (relevant to the continent) can still be operated efficiently using the existing 4G networks. Therefore, I think it makes good business case to invest in 4G networks in Africa, and assess the market readiness before deciding to transit to 5G. Most importantly, roll out of 5G networks can follow the same pattern as observed in other developed markets (China, US, etc.). This would help operators gradually invest, recoup their investments before delving fully into the development of new 5G networks. Furthermore, the demand for 5G use cases would have accelerated and hopefully help justify investment in 5G networks.

In Africa, 5G cannot be a natural progression to 4G, as pointed out in some quarters. Rather, it must be driven by demand, for operators to justify the huge investment in 5G networks. Presently, there is no demand for 5G on the continent, except in South Africa. I am however optimistic that the demand for 5G would gradually increase as the region witnesses an increase in the development of localized smart solutions for the region. Typical 5G use cases that have been pitched over and over again in other regions of the world may not apply here, and where they apply, they may need to be modified and adjusted to meet the region’s’ needs.

On a positive note, even though, Africa may be arriving late to the 5G party, it can benefit a lot by learning from the success stories and failures of those who are currently leading the 5G race.

Comment on Feed

Commenter: Good article Olayinka Oduwole. Yesterday, at GSMA’s M360 Africa in Kigali, GSMA released its Africa 5G report. Let me flag up a few highlights.

1. Africa has a demand problem and not a supply problem. 46% of pop is covered by 4G but only 9% 4G adoption.
2. Hence 5G will also be supply driven, and networks will be built even before users start using it.
3. While 5G is inevitable, it is not imminent. 2025 is a more realistic date for its mass market availability.
4. Globally, 5G rollout is not based on verifiable business case. Rather, it is dependent on market readiness. GSMA looked at 43 indicators of readiness for 160 countries and it is clear that African countries are not ready for 5G in 2019.
5. Leapfrogging is tantalising but unrealistic. Olayinka has flagged the NSA problem. See page 27 of the GSMA report for a full consideration of the technical, commercial and policy reasons why leapfrogging is unlikely https://www.gsmaintelligence.com/research/2019/07/5g-in-sub-saharan-africa-laying-the-foundations/785/

Author Response: Thank you Mr Emeka for sharing the insightful article produced by GSMA. I am not sure I believe 5G will be supply driven in Africa because 5G in Africa will be more focused on enterprise applications, iot, machine Communications etc. rather than the emBB use case. Now, these use cases can still run efficiently using 4G networks and previous generations and I believe when telcos see a huge number in smart devices, enterprises etc. they would be more than willing to invest. Besides, the NSA option also will help them assess the market readiness before leaping further into developing 5G new core. Chinese and US operators think they would need around 220 -250 billions of dollars for investment in 5G networks. That’s a lot of money for African telcos and I do sincerely think demand can be the only driver for such huge investment.

Commenter: Fair points Olayinka Oduwole. But the reality is a lot more nuanced. If it is based on demand, then there is probably no telco anywhere in the world who should be launching 5G today. I understand your concern about cost. But you need to distinguish between recurrent capex and incremental capex. For most operators, recurrent capex is predetermined based on the capex to revenue ratio. Thus, the CTO gets a chunk of money and decides what to spend it on. Today, she spends it on 4G. By 2025, she will spend it on 5G. There is little appetite, from all of our research, of telcos who want to push for incremental capex for 5G. 

The Psychology of Software Development in Synergy with Human Interaction and Use

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Psychology is the scientific study of the mind and behavior. Psychology is a multifaceted discipline and includes many sub-fields of study such as human development, sports, health, clinical, social behavior and cognitive processes.

Many software developers don’t understand that developing software to interact properly with humans involves a whole lot of critical thinking and unforeseen interactions. Through the process, valuable insights could be deduced, anchoring on the perception of use of the software. By doing this, new improved features are implemented, and in this era, leveraging data Science and artificial intelligence.

Three cases:

1.) Take for example the ride-hailing platform Gokada; to build its software properly, the backend developers have to understand a bit of how the human psychology works and relate it properly to the methods of software development. Take for example, Ifeanyi has been using the Gokada system continuously and constantly for 6 months to pick a ride at 4p.m, as a software developer who understands the concept of the psychology of software development. I would incorporate two features based on data mining and artificial intelligence; one data mining to extract useful insights on continuous usage by each user and derive a pattern based on their time, locations and destinations. Then, I will incorporate algorithm to automatically contact them up and enquire if they would like to have a personal ride assigned to them or have a ride automatically come pick them up.

It could be something like this:  hey it’s 5 minutes past your usual official pick up time and you still haven’t booked a ride yet today, should you send a Location so we could come pick you up, or you satisfy our curiosity and tell us why you haven’t booked a ride today? This not just only indicates that the system is smart, but also indicates deductive futuristic reasoning based on User Generated Content.

2.) We need to leverage on subscription models, and how humans perceive them. I once used an AdWords application and while filling it they offered me a lifetime bidding on keywords for a very reduced price based on subscription model. With these incentives they make more money on the long run because more people are going to subscribe to the lifetime membership platform.

3.) Gestalt perception principles. Perception is the process in which people are aware of objects and events in the external world. Perception occurs in five stages: stimulation, organization, interpretation-evaluation, memory and recall. It plays an important role in user interface related to the psychology of human interaction to software development. Imagine a simple good morning smiley, happy birthday pop-up text or reminders could go a long way in increasing the interaction and usage of a particular app. Take for example myself, due to my business nature, it got to a point where I only logged in to Facebook just to view the “birthday happening today” reminder notification.

Hence it’s imperative we understand and incorporate the concept behind the Psychology of Human Interaction to Software Development.

Season of Letters in Nigeria and the Need for President to Use Nationscope for Solution Delivery

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By Mutiu Iyanda

In the United States of America, letters have been written by the outgoing Presidents to incoming successors despite political and ideological differences. As a tradition the letters are not made public until a few years after the exit of the former presidents. Whether in the USA or other countries, where former presidents deem it fit to write notes to the new presidents, the contents have always been on national issues and possible challenges for the new presidents throughout their tenure.

One fact that is difficult to disregard is that most ex-presidents cannot resist the urge to stay relevant.  This has been the main reasons for the former presidents to use any avenue to express their feelings about the state of their countries, especially when critical issues are raging and threatening national unity and security. Beyond contributing to the socioeconomic and political discourse, many ex-presidents have devoted their time to charitable works.

Former President Olusegun Obasanjo is one of such ex-presidents who have used and still employing various means to express his feelings about the present and future conditions in Nigeria. Within a year, Nigerians have had the privilege of reading three open letters from the ex-president to the incumbent President Muhammadu Buhari.

In January, 2018, Nigerians read political and economic uncertainties expressed by the former President. On January 20th, 2019, Nigerians were also flooded with the news of a new letter from Chief Obasanjo, comparing administration of President Muhammadu Buhari with the former military Head of States, General Sani Abacha. On July 15th, 2019, a new letter emerged, calling on President Buhari to speedily address insecurity in the country.

Analysis of the first two letters shows that the level of happiness of Chief Obasanjo reduces by 4%. In 2018, he was contended by 59%. Fifty-five percent was discovered in 2019’s first letter. His unhappiness about the state of the country is largely connected with the 2019 general elections. While happiness and sadness dominated the previous letters, the new letter is full of fear (64%) and more than half of the expected percent of happiness (56%) and sadness (54%). From the beginning to the end of the new letter, analysis reveals that ex-president was analytical in his construction of sentences and paragraphs, establishing his usual ‘constructive criticism’.

Expressing his fear about the state of the country, ex-president notes that “I am very much worried and afraid that we are on the precipice and dangerously reaching a tipping point where it may no longer be possible to hold danger at bay. Without being immodest, as a Nigerian who still bears the scar of the Nigerian civil war on my body and with a son who bears the scar of fighting Boko Haram on his body, you can understand, I hope, why I am so concerned.”

Chief Obasanjo was sad that Boko Haram remains a daily issue of insecurity because of the approach being used by the security forces and the government. “Say what you will, Boko Haram is still a daily issue of insecurity for those who are victimised, killed, maimed, kidnapped, raped, sold into slavery and forced into marriage and for children forcibly recruited into carrying bombs on them to detonate among crowds of people to cause maximum destructions and damage.

The former president believes that the failure of the government to address the herdsmen and farmers crises have snowballed into banditry, kidnapping, armed robbery and killings all over the country. According to him, the indifferent attitude to the public calls regarding the holistic solution will continue to be at the expense of Nigerian unity and possibly its continued existence.

Source: The Punch, Obasanjo’s Letter, Infoprations Analysis, 2019

Public Interest: Fear and Insecurity in 15 States and FCT

Do the ex-president’s feelings translate into public interest?  Answers to this question were sought using real time data. From 15 to 16, 2019 (till 4pm), people in Benue, Ekiti, Ondo, Osun, Plateau, Kaduna, Kano, Rivers, Ogun, Imo, Delta, Anambra, Oyo, Lagos, Edo and Abuja developed interests in insecurity and fear. Analysis reveals that the interest in fear was higher (75.29 score) than in insecurity (49.56 score) during the period. However, with the consideration of the severity level, interest in insecurity (29.500) was higher than in fear (28.437). This signifies that people were more concerned about insecurity than the fear expressed by the ex-president. This does not mean that people are not aligned with the issues that led to the ex-president’s fear.

For instance, analysis further indicates a 27.5% connection of the level of fear in four avoidable calamities and overall fear in the letter with the public interest in fear in the last 24 hours. This is on the high side for the insecurity. Analysis reveals 32.2% link of the level of fear in four avoidable calamities and overall fear in the letter with the public interest in insecurity during the period.  This also establishes that one percent of ex-president’s fear increases public interest in insecurity by 32.2%.

From the insights, it is obvious that governments and security forces need to address insecurity without fear or favour. It has reached a stage where groups or individuals’ interests must be abandoned for the good of every citizen.

Source: Google Trends, Infoprations Analysis, 2019

Increase in Piracy Attack Triggered by Massive Unemployment in Nigeria – Capt. Alfred

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By Oko Ebuka

Sequel to the second quarter 2019 report on piracy attack released by International Chamber of Commerce, ICC, International Maritime Bureau, IMB, which placed Nigeria as the headquarter of piracy attack in the world, a specialist in Maritime Security, Captain Alfred Oluwasegun Oniye, affirmed that the report is true as the crime is continuously perpetrated by maritime experts who are unemployed in the maritime industry.

Disclosing this in a chat with Vanguard Maritime Report, Captain Oluwasegun said that the report is authentic because Nigeria is currently leading the Gulf of Guinea in the activities of piracy.

According to him, “Nigerian waters are not secured. And I must tell you, Nigeria is still the headquarters of sea pirate activities in the Gulf of Guinea and why this is increasing is because we have more unemployed seafarers. These boys are back to the creek. They will survive.

“As an Intel Officer, I already have over 50 recorded piracy attacks as a proof of these attacks in our water. If they said the reports are faults, they should give us proof because those who made this report have evidence. The whole world cannot be lying against Nigeria. We sail this water and we know what we are passing through every day”, he said.

On the issue of NIMASA

Captain Oluwasegun also calls for the total overhauling of the Nigerian Maritime Administration and Safety Agency, NIMASA, by appointing marine professionals who know the rudiments of maritime business to enable the country actualize the potentials that are wasting.

“The industry is in serious mess. It needs overhauling. We need the right people. If you want to appoint a NIMASA DG, appoint a master mariner who understands the job perfectly. So when you don’t have the clue of what is going on in the industry, how do you want to manage it? Or you bring a historian to be the NIMASA DG, what does he know about maritime, he can’t feel the seafarer’s pain.

“We need master mariners or marine engineers. We need the professionals and we need the ministry of shipping or ministry of marine. If we can have ministry of aviation, we need ministry of marine if we only want to get it right in the country because the economy of the industry has not being tapped”, he explained.

Establishing Ministry of Shipping

The Captain equally suggested the removal of maritime industry from the auspices of Ministry of Transport to enable the industry properly manage of the blue sea economy.

“I still find it difficult to believe that at this stage we still have marine under Ministry of Transport. I don’t see any reason why this government cannot create a ministry for shipping. If aviation can stand on its own, then marine should stand on its own. We shouldn’t be under ministry of transport because marine is strictly a professional field which takes someone time to understand the depth before it can be managed.

“This industry controls 90 percent of the Nigerian economy, if they shut it down in a day, in the next 20 years Nigeria will not recover from it”, he concluded.

What Goes On Behind Buy/Sell Mandate? A Beginner’s Guide to Stock Investing

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By David Alade

Investing in the equity market is as seamless as saying buy/sell this for me. The real work lies behind the call to buy/sell. Why did you sell or buy or hold? What were your considerations? Your strategy?

Behind every buy/sell order lies 4 fundamental things. Liquidity consideration, Profitability consideration, Overall Company Financial Health consideration and Capital Gain/Dividend consideration. You really do not want to buy any stock without first considering these four things, but that doesn’t mean these are the only considerations, they are just fundamentals, remember.

Liquidity

For anyone looking into equity investing the first thing you really want to consider is how liquid the stock is? What does it mean for a stock to be liquid – it is simply how easy it is to buy and sell the stock without affecting the asset value? A stock will be regarded as perfectly liquid if you can buy it for N7 and sell immediately for N7. To stress that point, it is the availability of the market for the stock.

As you go into equity investing, your first consideration will be liquidity. Your next question is how to know which stock is liquid? The answer to that is to check the Exchange website for top traded stocks. You may want to do this for like 2 weeks to be able to capture all stocks that are liquid. Create an Excel Sheet to save your findings, equity investing is not a play, Microsoft Excel will come helping a lot.

Do that and you have your liquidity question answered. The next you want to consider is your strategy which will follow below.

Capital Gain and Dividend Consideration

This is really about your strategy, do you care for capital gain or dividend?

Capital gain is the increase in the value of the stock you own. Capital gain would be said to have occurred if a stock you bought for N7 has appreciated to N10. That will be about 48% increase in value.

Dividend is the money companies’ payout to investors that own a share of their stocks. This is typically paid yearly (some bi-annual). If you own 10,000 units of a stock, and the company declared a dividend of N2 per share, you will receive N20, 000 as a dividend.

Now the question is which do you care for? Capital Gain or Dividend?

History has it that young people tend to value capital gain over dividend. That’s because really, it’s about growing your wealth not about having more cash, dividend put cash in your hand, and capital gain increases the value of your investment.

Once you decide on your strategic need; dividend or capital gain or both, your next concern is how do I know stocks that pay a dividend and those that don’t?

To answer this as well, get your Excel Spreadsheet ready you will do a bit of work, remember equity investing is not a play. You have earlier determined which stocks are liquid, those stocks I encourage you to go to their websites and navigate to “Investors Relation” there you will find the company’s financial statements. Download it up-to-the last 5 years (2018, 2017, 2016, 2015 and 2014). 5 years is just good enough, but not less so you can see the historical pattern of dividend payment.

Go to the page where the Income Statement is and below you will find the dividend declared for that year. If nothing, the company probably didn’t pay dividend for that year. Keep your 5-year record to know how much they historically payout in the dividend. Now you should have your questions on dividend answered.

If your focus is capital gain, just on the Exchange’s website (or Bloomberg), find the stock and view it’s 5 years historical trend at least. What is the pattern? Growing? Declining? Static? This should inform whether you should choose the stock.

Company Financial Health

This is a deep and somewhat complicated point. It will take more than an article to scratch its surface. Basically, you want to look at the whole financial statements, Balance Sheet, Income Statement, Cash Flow, Management Composition, and Corporate Governance. You see it’s a lot. So no deep diving on this.

Profitability

To be candid you don’t want to invest in a company that is not making a profit (yet). On a global scale, a lot of technology start-ups have been listing on NYSE with no profit but only Part to Profitability (PtP). But stocks like these takes more effort to understand, in that beyond the surface level analysis, you must understand its operations, and vision and the very PtP. If you don’t understand the business model, be wary of investing in such stock, I recounted my experience making similar mistake here.

But really, you may want to start with companies that are profit-making. And to know them, go on the financial statements you downloaded, and from the Income Statement, you will see their Profit after Tax (PAT). Use that to determine profitability, and going as far back as 5 years is also key.

What goes on behind buy/sell mandate?

The above is just a tip of an iceberg regarding what a typical equity investor will consider before giving a mandate to his/her Stock Broker. Do you still want to go into equity investing?


Disclaimer: this is not investment advice nor is it a call to invest, it’s basically for knowledge sake. Also, opinions are mine and do not represent that of any organization I am affiliated to.