FG targets new stream of telecom investment seen in broadband

Ben Uzor Jr

Nigeria’s internet access problem characterised by slow and exasperating access to the cyberspace even with the growing number of underwater cable systems on the country’s coast line, would soon become a thing of the past. The federal government has opened its doors to the global investment community through the adoption of an open access model, strategically designed to strengthen investment in the area of deploying in-land fibre networks needed to move available bandwidth capacity around the length and breadth of the country. Tony Ojobo, director, public affairs, Nigerian Communications Commission (NCC), made this known during a courtesy visit to BusinessDay’s head office in Lagos.

The adoption of the model, according to him, is to basically preclude existing challenges posed by some operational drawbacks arising from functions of different government agencies, including urban and regional administrative setups which impinge on the right-of-way of facility deployments. Analysts had earlier warned that Nigeria’s prospects of enjoying reasonably priced and efficient broadband services was been derailed by the indiscriminate and sometimes absurd levies charged by various agencies and state governments on right-of-way approvals for deployment of in-country fibre transmission links. He said significant capital investment was still required to distribute bandwidth capacity across the country.

Nigeria boasts of four undersea fibre optic cables: SAT-3 managed exclusively by ailing Nigerian Telecommunications Limited (NITEL), privately owned cable Main One cable, operator –run Glo-1 cable and WACS initiated by a consortium of firm including MTN. “Yes, the submarine cables have landed but we still require huge levels of investment in infrastructure for majority of the Nigerian populace to enjoy the benefits of broadband internet services. I hope that when the infrastructure providers are licensed in an open access model, we will have more investment in that area. There is a sense of urgency in the commission to catch up with the rest of the world in the area of broadband internet”, Ojobo said.

Kenneth Omeruo, a telecoms analyst agrees with Ojobo, saying the main hurdle has been the high cost of infrastructure investment required to extend the international capacity into the hinterland. According to him, “the price war in mobile calling rates disrupted the pricing structure and revenue expectations in the telecoms market. This, he further explained has resulted “in a re-evaluation by each operator ,of their capital expenditure costs.” The outcome, according to him, is that no operator is willing to stump up the extensive outlays necessary to make data work efficiently. On the other hand, several operators own in-land fibre networks but coverage is limited and there is too much duplication.

Kazeem Oladepo, head of legal, Main One Cable Company said telcos are unwilling to share infrastructure and in cases where they do agree to share, they charge very high prices, often for strategic reasons. Ojobo said a major appeal of the strategy is that the federal government will offer subsidies to enable broadband services to the under-served and un-served areas of the country where it may not be economically viable to deploy fibre. According to the NCC director, the strategy will also ensure that investors make decent profit, adding that the federal government is highly supportive of the commission’s drive to encourage capital investment in broadband infrastructure deployment.