As the nation’s Internet accessibility problems increase by the day, investment in broadband infrastructure across the country is the long-awaited solution that policymakers should by no means overlook, writes BEN UZOR JR
No doubt, the jet age is an era that has been greeted by enormous inventions and display of human ingenuity which has gone a long way in revolutionising the global society and the economy of many countries across the globe. Interestingly, human ingenuity in the area of technological developments have made the world a global village as it has brought people from different parts of the world closer with little or no difficulty.
The internet, which has continued to be an integrating force, has melded the technology of communications and computing to provide instant connectivity and global information services to all its users. This has invariably created significant impact in the business world with applications such as e-commerce, online banking and e-payments, e-health, e-learning and e-government is carried out even as technology keeps evolving rapidly.
While the aging population struggles to embrace this emerging trend in information and communication Technology (ICT), the younger generation can’t even imagine life without it. As Nigeria continues its quest to become one of the 20 leading economies by 2020, stakeholders in the Information and Communications Technology (ICT) sector are concerned about the current level of internet connectivity and penetration in the country.
This is against the backdrop that increased broadband penetration, according to experts has the power to spur economic growth by creating efficiency for society, businesses and consumers. According to them, broadband is critical in nation building. To further buttress this view, Ericsson and Arthur D. Little in a study carried out specifically to quantify the impact of broadband speed on GDP. It was concluded that for every 10 percentage point increase in broadband penetration GDP increases by 1 percent.
This growth however stems from a combination of direct, indirect and induced effects. Direct and indirect effects provide a short to medium term stimulus to the economy. The induced effect, which includes the creation of new services and businesses, is the most sustainable dimension and could represent as much as one third of the mentioned GDP growth.
While some stakeholders in the telecom sector believe that the Nigerian Communications Commission (NCC), the telecom industry regulator, may not be doing enough to encourage providers of fibre optic backbones that have since landed their submarine cables at the country’s shores, the commission some schools of thought are of the view that the commission’s new broadband strategy based on an open access model if implemented properly may go a long way in increasing internet access in the country.
They maintained that inadequate fibre transmission backbone required to aid nationwide distribution of the enormous bandwidth emanating from emerging underwater cable infrastructure remains a major stumbling block to wider broadband internet access in Nigeria.
Poor internet service persists
Commenting on this issue, Funke Opeke, chief executive officer, Main One Cable Company which has laid a 7,000 km fibre optic cable linking West Africa to Europe, noted the absence of robust national backbone that has increased the cost of moving capacity around the country. According to her, “the price of moving capacity from Victoria Island to Ikeja in Lagos is higher was in most cases higher than the cost of moving capacity from Lagos to London.”
BusinessDay learnt that it cost $600 per megabyte to get connected from Lagos to London compared with $1, 100 between Lagos and Abuja. Industry experts who spoke with BusinessDay criticised governments’ inability to encourage investment geared towards strengthening backbone transmission networks, labeling it as counterproductive to economic development as majority of the populace especially rural areas would be denied access to reasonably priced broadband services.
Opeke revealed that the major challenge of delivering broadband in Nigeria is distribution. According to the Main One CEO, “the federal government must conduct a review of the national backbone infrastructure, effectively manage the country national frequency spectrum resource as well as encourage infrastructure sharing amongst telecoms operators in order to improve internet penetration in the country. Industry watchers have earlier argued that terrestrial fibre backbone networks are proving slower to bring the benefits of the cables.”
Though several operators own in-land fibre networks, Opeke opined that coverage is limited, even as there is too much duplication. She stated that telcos are unwilling to share infrastructure and in cases where they do agree to share infrastructure, they charge very high prices, often for strategic reasons.
“We brought of a big cable into the market and reduced the wholesale internet price points significantly. What we find is that the infrastructure on ground to distribute is limited and in areas where national backbone network, metro fibre networks exist, it is controlled in a proprietary nature unlike an open access infrastructure where anybody can connect at a uniformly low price.
“The prices for accepting such capacity are prohibitive and so it limits how close to the consumers we can get with the capacity we have brought into the region without building the networks ourselves”. She noted that $250 million had been invested so far in building the underwater cable and constructing distribution networks,” the Main One CEO revealed.
Telecommunication companies like MTN, Globacom, and Airtel are optimistic that Nigeria’s low internet penetration which stands at 28.6 percent, according to internetworldstats would before long change. This is even as telcos continue to invest huge financial resources in construction of fibre backbone and as competition intensifies in the submarine cable market.
These operators have so far deployed 22, 600 km of fibre transmission backbone, according to data derived from the Global System for Mobile Communications Association (GSMA), a global body representing the interest of mobile operators.
According to the GSMA, MTN and Globacom have deployed 8, 000 km and 10, 000 km of fibre backbone respectively. Airtel Nigeria formerly Zain has deployed 4, 600 km of fibre transmission backbone.
Poor spectrum management
Proper allocation of spectrum bands, according to the analyst would enable telecommunications companies roll out innovative mobile broadband services. Analysts say the Federal Government has remained passive to the incidence of poor spectrum management, even in the light of the importance of broadband to economic development. According to them, federal government’s inability to effectively manage its national spectrum resources is causing the nation significant economic losses in terms of lost revenue generation and foreign direct investment opportunities.
According to them, an increase in broadband penetration from 1 percent to 10 percent would invariably raise the country’s annual gross domestic product by 1.22 percent by 2015. The GSMA, a global body representing the interest of mobile operators has also predicted that Nigeria’s wireless broadband market will have a direct revenue impact of N598 billion in the next three years. “Nigeria’s low internet penetration can be attributed to poor spectrum management. We are aware that broadband is a driver of all sectors, it makes all the sectors to be more productive. From education, energy, health etc.
Spectrum is required for broadband services but these frequencies are not readily available.
“The 3.5GHz spectrum is very suitable for broadband but it’s under the control of the Nigerian Broadcast Corporation (NBC). Even spectrum within the purview of the Nigerian Communications Commission (NCC) is still not properly allocated. The cost of spectrum is still very high for local operators and that explains why foreign operators dominate the market. “There should be a deliberate policy to encourage local operators”, Lanre Ajayi, past president, Nigeria Internet Group, said in an interview. It was reported recently that the NCC may award four spectrum licences before the end of 2011.
Omobola Johnson, minister of communications technology, said in an interview recently, that the ministry would pay keen attention to spectrum management as well as accelerate the deployment of broadband infrastructure to increase penetration by 2015. “Spectrum is paramount for us in the ICT ministry. It is a limited national resource and as such we should manage it much more efficiently.
“There is a National Frequency Management Council (NFMC) within the ICT ministry. What we are doing in this regard is actually strengthening that council. We intend to make the council much stronger than it is today in terms of research into the different spectrum available and what they can be used for. “What we are looking at is the different spectrum bands that we have today and ensuring that we are making the best use of these spectrum bands. For instance, the Digital Dividend band, we will make sure that we allocate it to the right telecoms operators in no distant time. There is also the 2.5GHz right now.
“We will make sure that frequency spectrum is allocated to the right industry in order to ensure that we get the benefits of efficient broadband internet services. So, spectrum management is indeed an issue. “But it is an issue that we have recognised and it’s something that we are working towards ensuring that we manage our spectrum much better than we have managed it in the past,” Johnson posited.
Addressing internet access problem
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. Interestingly, 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), disclosed that the adoption of the model 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. Ojobo noted that 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 disclosed,
Echoing the sentiments of Ojobo, Kenneth Omeruo, a telecoms analyst stated that the main hurdle has been the high cost of infrastructure investment required to extend the international capacity into the hinterlands. According to Omeruo, “the price war in mobile calling rates disrupted the pricing structure and revenue expectations in telecoms market. This has resulted in a re-evaluation by each operator of their capital expenditure costs.” The outcome, according to the telecom analyst, 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. Lending his view, Kazeem Oladepo, head of legal, Main One Cable Company opined that telcos are unwilling to share infrastructure and in cases where they do agree to share infrastructure, they charge very high prices, often for strategic reasons. Meanwhile, Ojobo revealed that 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. The commission is in the process of accessing what’s on ground in terms of infrastructure and demand to determine the final framework. We will soon spell out in detail what we will do in this regard.”
Eugene Juwah, NCC’s CEO had earlier disclosed that the implementation of this model would bridge the gaps in broadband deployment, eliminate last mile issues, reduce the price of bandwidth for end users and unlock the market for massive broadband usage in the country. During the implementation, the commission will issue licenses in the passive and active layers respectively while price caps will be implemented in these layers using cost based pricing.
Recasting government’s objectives as recently indicated by the Communications Technology Omobola Johnson, the NCC has indicated that Nigeria’s expectations by 2015 is to achieve 12percent broadband penetration, 80 percent mobile penetration, 2 percent fixed line growth, 34 percent internet growth and 12 percent PC penetration. Commenting on the issue of poor quality of service prevalent in Nigeria’s highly competitive telecoms industry, Ojobo noted that after the 30-day deadline, the NCC would conduct another independent monitoring to ascertain if there is significant service improvements based on four key performance indicators (KPIs) as indicated by the commission.
For Emmanuel Ekuwem, Immediate Past President, Association of Telecoms Companies of Nigeria (ATCON), the nation will achieve speedy development in 2012 if the country embrace broadband internet to its fullest. According to him, broadband internet access would enhance efforts at job creation, wealth creation and poverty alleviation. “ICT will accelerate our meeting of the United Nations Millennium Development Goals (MDGs). It will engender an overall national economic growth and development. We will all gladly experience an ICT-based increase in our GDP.
“Who will not be happy to see a creative explosion of a feeling of national rebirth and well-being among the citizens of Nigeria? All these good things can only be possible when we have a ubiquitous availability of broadband services in Nigeria,” Ekuwem disclosed. It would be recalled that NCC had threatened to stop the three major mobile operators, MTN, Glo and Airtel from further sale of SIM cards from December, this year, if they fail to meet the target set by the Commission to improve on quality of service.
