FG threatens $2.25bn investment in underwater cables

Ben Uzor Jr

 

The profitability of undersea cable operators in Nigeria is been threatened by the delay in the approval of a national broadband policy expected to accelerate the pace of wholesale fibre access through infrastructure sharing and deepen broadband penetration. Industry analysts have labelled government's delay in approving a broadband policy counter-productive as cable operators have invested $2.25 billion in deploying these infrastructure. But many of them are not getting the needed return-on-investments due to poor utilisation of the cable infrastructure. Cable operators have however identified prohibitive cost of wholesale fibre access as the fundamental drawback limiting speedy take-up of available bandwidth capacity.

The Nigerian Communications Commission (NCC) had developed a broadband plan based on 'Open Access'. But the policy is still awaiting Jonathan's approval. "The government should intervene to accelerate the pace of wholesale fibre access. We need to agree to a commercially viable framework for infrastructure sharing with incentives for the incumbents to share their proprietary networks", Funke Opeke, chief executive officer, MainOne Cable, said in an interview. Speaking in the same vein, Christian Rouffaert, UK&Ireland Network Strategy lead, Accenture' said Nigeria needs to clearly articulate its broadband strategy with a view to defining expected roles of government and the private sector in the emerging broadband ecosystem.

"Most of the European nations have an active broadband plan focused on driving high speed connectivity. I don't see any reason why Nigeria does not have one. This is because there is a correlation between broadband and economic growth", he added. There are four active cables carrying an installed capacity of over 19.2 terabytes, about 340 gigabyte combined, a massive increase in capacity available to drive bandwidth dependent services. MainOne, the 7, 000 – kilometre cable, is valued at $240 million. The 10, 000 kilometre Glo-1 cable cost $800, 000 to build. Industry analysts place the worth of NITEL’s South Atlantic 3 (SAT 3) at about $600 million. While MTN’s West African Cable System (WACS), cost about $600 million.

Industry analysts told Benuzorreports, that 95 percent of the capacity on these infrastructure is redundant due to the lack of distribution and lastmile connections needed to move available bandwidth capacity across the length and breadth of the country. Benuzorreports learnt that there is more than 30,000 kilometres of domestic fiber optic cables to connect those international cables to more than 50 percent of the Nigerian population. But from all indications, access to fibre infrastructure to move bandwidth capacity across the length and breadth of the country is so far discriminatory and inordinately expensive. This, according to analyst has grave implications as Nigeria's 70 percent internet penetration target seems very unlikely.  

Beyond that, most Nigerian schools, hospitals, government agencies, and small and medium businesses have been inhibited from accessing broadband services. Kamar Abbas, managing director, Ericsson Nigeria told Benuzorreports in an interview that "Government should try to identify and maintain a public database of where the fibre is today and where it is planned in the short to medium term so that investors and indeed consumers can understand where there is supply and where there is deficit. That is the first thing we will encourage government to think about." He added that there is an extremely convoluted process of securing right-of-way to embed fibre in the ground. This, Abbas went further discouraged investment in fibre deployment.