•Operators pay $60 per metre for right-of-way
Ben Uzor Jr
In spite of the growing number of underwater fibre-optic cable systems berthing on the country’s coastline, Nigeria’s prospects of enjoying reasonably priced telecommunications services could be derailed by the indiscriminate and sometimes absurd levies charged by various agencies and state governments on right-of-way approvals for the deployment of in-country fibre transmission links.
Investigations reveal that across the country, telecoms operators (telcos) pay anything between $50 (N7, 464.5) and $60 (N8, 957.4) per metre for right-of-way. Lagos State charge is about the highest in the country at $60. Wale Goodluck, corporate services executive, MTN Nigeria, told BusinessDay in a phone interview that MTN pay more than $60 per metre for right-of-way approvals in Lagos.
“Look, $60 per metre for right-of-way is an understatement. We actually pay more for right-of-way approval. Moreover, the biggest problem, apart from the prohibitive cost charged by government, is that we have to pay two or three times to local, state and federal governments. The proper thing is for government to continue to create the enabling environment for operators to thrive.
They should encourage telecoms companies by eliminating multiple taxes so that they can easily take fibre to homes, colleges, polytechnics and universities. This will invariably drive the adoption of Information Communications Technologies (ICTs) in the country as well as improve Nigeria’s broadband penetration,” Goodluck further explained. Rights-of-way are the land rights acquired by an operator to allow the construction and operation of fibre optic transmission or distribution facilities.
Traditionally, wires, whether fibre optics, coaxial cables or otherwise, lay in the public right-of-way along with the facilities of public service providers. Industry watchers are worried by the charges since more fibre optic cables are expected to be laid as the information super highway is further developed. To this effect, they have called on the Federal Government to intervene to rein in what they describe as very unusual charges and the consequent cost impact on right-of-way approvals.
They believe reasonable charges will enable operators deploy fibre cables quicker, and subdue the cost of the services they carry to the doorstep of Nigeria’s internet users. The Nigerian Communications Commission (NCC) had earlier appealed to state governments to reduce right-of-way charges for telcos in order to maximise their efficiency and service offering. According to the regulatory body, lesser taxes should be collected from telcos because increased expenditure will ultimately be transferred to subscribers in the form of higher tariffs.
Over the past eight years, telcos have continued to grapple with Nigeria’s unfavourable business environment in their quest to provide good quality service to their teeming subscribers. Despite these challenges, growth in the number of telecoms subscribers has remained on the upswing. Latest data from the NCC reveal that active connections peaked at over 78.9 million lines as at April this year with GSM mobile sector accounting for the traditional market dominance with over 69.6 million lines.
Earlier, Bashir Gwandu, executive commissioner, technical services, NCC, had appealed to state governors at a technology forum held in Lagos recently to reduce rights-of-way charges for telecom companies in order to maximise their efficiency and service offering.
“We have bottle necks around the country for fibre. One of the bottle necks we have today is the international links. But we have transmission links coming into the country, say, from Lagos to Abuja or Abuja to Maidugari. We need right-of-way. Telecoms companies are crying out for right-of-way.
We are appealing to you to make right-of-way as easy as possible because the benefits to Nigerians are enormous. Eventually, even if you cost right-of-way higher, it is consumers that would pay for it. In Lagos, I have operators crying that they are paying $60 pay metre on right-of-way. That is not going to be sustainable for this investment; it is not going to be helpful for Nigerian consumers”, he explained.
In the same vein, Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), advised government not to consider right-of-way approval as a way of generating revenue, but “they should see the end result as the overall interest of the nation’s information communication technology (ICT) development and limit its role to standard compliance and control.
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