NCC adopts new industry structure for broadband deployment

Ben Uzor Jr

Information has emerged that the Nigerian Communications Commission (NCC) is adopting a new industry structure for broadband deployment that would engender effective competition at all layers of the telecoms industry, drive innovation and infrastructure sharing, as well as provide a platform for the speedy deployment of broadband infrastructure. With this new structure, Nigeria’s internet access problem characterised by slow and exasperating access to the cyberspace, inspite of the growing number of underwater cable systems on the country’s coastline, would be resolved before long.

At a broadband infrastructure forum in July, Eugene Juwah, Executive Vice Chairman (EVC), NCC had disclosed that the commission was considering three possible models that would assist in the effective implementation of the commission’s ‘Open Access Strategy’. The strategy is specifically designed to strengthen investment in the area of deploying in-land fibre and last mile networks needed to move available bandwidth capacity around the length and breadth of the country. The three possible models presented to the forum include - the Utility Model, Equal Access Model, and Passive Infrastructure Model. According to NCC helmsman, “the Utility Model provides equal access but to a reduced extent, because it combines the active layer (OpCo) and the passive layer (NetCo), which brings about the InfraCo.

The Passive Infrastructure Model does not provide for equal access, as it permits the OpCos (transmission companies) to also be retail service providers. “Lastly, in the Equal Access Model-the NetCos are separated from the OpCos and the retail service providers. According to the new report by the commission on Monday, Juwah indicated that after due consideration of the three industry structure models, “the Equal Access Model is being considered as the possible industry structure for broadband access deployment in Nigeria.” In this model, bandwidth will be provided by the active infrastructure providers to the retail service providers on a fair and non-discriminatory basis.

 The active Infrastructure providers will buy bulk bandwidth from the submarine cable companies, which are then delivered via optical fiber owned by the passive infrastructure provider. This, according to Juwah is in contrast to the current broadband infrastructure market structure that is highly vertically integrated, where some players provide both passive, active and retail services on one hand, while providing passive and active (or part active) infrastructure to other players who they compete with in the retail segment on the other hand, with no price capping at the interconnecting layers.

Analysts are all agreed that this current market situation has given rise to price regimes that negate the objective of increasing broadband penetration in Nigeria. Juwah disclosed that the implementation of the open access 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 Nigeria. The commission also disclosed that it would issue licenses in the passive and active layers, while price  caps would be implemented in these layers, using cost based pricing. In the retail service layer, Juwah explained that multiple licenses would be issued, with pricing to end users determined essentially by market forces.

To enable service delivery at affordable prices for the end-user, where it may not be economically viable to do so, the EVC pointed out that the commission would offer financial incentives to the infrastructure providers to enable them operate reasonably profitably. In addition, the federal government, through the commission, would facilitate agreements and engage in dispute resolution among the various industry stakeholders.