Source: Samson Akintaro/ Nairanews
Plans by the Nigerian Communications Commission (NCC) to drive the deployment of fibre infrastructure across the country may have hit the rock as none of the licensed companies is able to deliver 7 years after.
This now casts a shadow over the country’s target of achieving 70% broadband penetration by the year 2025, which is also hinged on the expectation of the wide deployment of fibre infrastructure by licensed infrastructure companies (InfraCos).
The companies were licensed to provide last-mile services in the six geopolitical zones with Lagos standing alone for its peculiarity being the commercial hub of the country.
MainOne’s subsidiary, Infraco Nigeria Limited and IHS were the first two companies to be licensed in 2016 to cover Lagos and the North Central zone including the Federal Capital Territory (FCT) respectively.
But seeing that the model might not work considering the bottlenecks of infrastructure rollout, IHS returned the license a few years later.
By 2018 5 other companies were licensed to cover North East Zone (Brinks Integrated Solutions Limited) North West (Fleek Network Limited) South-South (Raenna Nigeria Limited) South West (Odua Infraco Resources Limited) and Southeast (Zinox Technology Limited). In 2021, Broadbased Communications Ltd. was issued the licence returned by IHS to complete the coverage.
However, none of the 7 companies have been able to roll out infrastructure in line with their licensing condition, which was to cover the access gaps, particularly in underserved and unserved areas of the country, and provide a wholesale layer to transmission services on a non-discriminatory open access price regulated basis.
According to the NCC, the InfraCos were to be responsible for providing a national broadband network to service providers.
Why they fail
With a promise of N65 billion to subsidize the cost of rolling out their infrastructure in underserved and unserved areas, the InfraCos were still unable to fulfill their licensing conditions for reasons the regulator could not explain.
When Nairametrics contacted the Director of Public Affairs of the NCC, Mr. Reuben Muoka, to inquire why the companies had failed to deliver, his response was that “the InfraCos will be in the best position to explain the reason.”
However, an official of one of the licensed InfraCos, who spoke under the condition of anonymity, said the government has not played its part in the area of Right of Way to pave the way for the seamless rollout of infrastructure.
- “Everybody has been paying lip service to resolving the issue of Right of Way charges, without which it will be difficult to make any meaningful progress with broadband deployment. Out of 36 states, only 7 out of the 36 have agreed to the harmonized charge of N145 per linear metre for RoW. No business can thrive under the current price regime where some states are charging as high as N5,000 per meter to lay cable. This is why we have not been able to do anything despite acquiring the N2.5 million license,” he said.
According to the Executive Secretary of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) Mr. Gbolahan Awonuga, while right-of-way charges were a major obstacle for the InfraCos, states are also coming up with a dig-once policy, which makes it more difficult for the licensed companies to do anything meaningful in terms of infrastructure.
According to him, the states are not aligning with the federal government for the actualization of the project.
Big project, big failure
When the Executive Vice Chairman of the NCC, Prof. Umar Danbatta hosted a delegation of officials of the United States Trade and Development Agency (USTDA) on March 19, 2019, he told the visitors about the plans for the Infracos citing it as a Public-Private Partnership (PPP) to address the Capital Expenditure (CAPEX) of the licences and government involvement will be predicated on the milestones recorded by each licensee.
- “We are trying to build intra-city and intercity networks to connect citizens all over the country irrespective of wave they live and whatever their circumstances,” he said.
In May of the same year, Danbatta issued a stern warning to the licensed companies that failure to roll out broadband infrastructure within six months would lead to the withdrawal of their licences.
- “This is one of the biggest projects that have ever been undertaken by the regulatory agency. The licence has been granted and there is a time specified in the licence document within which they must start deploying the infrastructure, which is one year. They have since done six months and they have six more months before we see visible infrastructure rollout of broadband services in this country. If we do not see any visible activity in infrastructure deployment, we have the right to withdraw the licence,” Danbatta said.
Curiously, nothing has been done by the regulator as the companies failed to roll out as specified in their licence.
Broadband on a downward trajectory
While the infrastructure project was to stimulate the growth of broadband, the lack of implementation has stymied the goal.
As a matter of fact, rather than an increase, broadband penetration in the country slipped to 45.57% in August this year from 47.01% in July, according to the latest statistics released by the NCC.
The data also shows that the number of Nigerians with access to fast-speed internet had declined by 2.7 million to 86.9 million in August from 89.7 million in July.
Indeed, with the August data, the country is now back at the same spot it was 3 years ago in terms of broadband penetration. As of October 2020, which was just a few months into the implementation of the broadband plan, penetration was at 45.93%.
Many Nigerians are still on 2G
Further showing the low level of internet access in the country, the NCC’s data on the generation of networks Nigerians are using revealed that 60.3% of subscribers in the country were still on 2G as of August 2023.
The telecom industry statistics further show that 10% of the over 220 million subscriptions were on 3G, a higher generation of network launched in Nigeria in 2007.
An improvement over 2G, 3G ushered in the use of video calls and had significantly higher data transfer, operating at a speed of up to 2mbs, but not up to the quality of broadband speed.
According to the Commission, subscriptions for 4G, which the operators started rolling out in 2016 still stood at 28% as of August, while the latest technology launched in 2022 accounted for 0.83% of subscriptions in the country.
What you should know
A World Bank report established that every 10% increase in broadband penetration in any country would improve its GDP by at least 4.6%.
Hence, the rapid rollout of broadband services in Nigeria is expected to address various socio-economic challenges the country faces, including the need to grow its economy, expand the tax base, and improve digital literacy and educational standards.
Meanwhile, the Minister of Communications and Digital Economy, Dr. Bosun Tijani, in his ICT Blueprint released on Monday, said he would come up with key initiatives to support the achievement of the 70% broadband penetration target by 2025, as well as internet access for the unserved and underserved.
It is unclear yet what new initiative the Minister will be coming up with after the failure of the InfraCo project.
