Stakeholders Skeptical About Meeting FG’s Broadband Set Target

Broadband-Summi_editAs laudable as it was, there seems to be a lot of doubt that the set target of achieving 30 percent broadband penetration by 2018 by the Ministry of Communication as contained in the National Broadband Plan of 2013 may not be achieved in the timeframe.

This came to light as stakeholders gathered for the 2017 Broadband Summit in Lagos.

In 2012, the Federal Government, through the then Ministry of Communications Technology, headed by Dr. (Mrs.) Omobola Johnson set up a blueprint to guide broadband development in Nigeria. The broadband strategy and roadmap, the National Broadband Plan (NBP), was targeted to underscore the strategic nature and importance of broadband for Nigeria.

At launch of the plan in 2013, the country’s fixed Broadband access stood at 6 per cent, by the end of 2016, it had moved up to 16 percent, while a recent announcement by the NCC put the figure at 21 percent. Despite this slow but sure upward climb, stakeholders insist that recent happenings in the industry may not allow a sustained trend in growth.

According to the President of the Association of Telecommunication Companies of Nigeria (ATCON), Olusola Teniola, there are threats to the major drivers of Broadband in Nigeria which are the recent launch of 4G technologies by new/late entrants and the eco-system created to drive broadband deployment.

While noting that there is a serious risk of market failure with the resultant ripple effect if the data services provisioning market structure is not reviewed, Teniola pointed to Multiple taxation, Infrastructure sharing and power as other inhibiting challenges.

He further lamented the creation of multiple FOREX windows as a source of uncertainty in the market, explaining that the cost of capital involved in setting up a full fledge telecommunication outfit is very high as the interest rates in Nigeria are typically  double digits and foreign direct investment (FDI) relies on a guaranteed return on investment (ROI). “The current FOREX window mechanism structure needs to be unified with a smaller spread to encourage investors to fund capital intensive CAPEX programmes.”

Further on the challenges that could stall the planned broadband target, Teniola pointed at: “very low incidence of 3G coverage across all parts of Nigeria; multiple regulation on the same infrastructure; long delays in the issuance of permits for new infrastructure; prohibitive charges to secure Right of Way (RoW); Under-utilized Right of Way by way of limited access; high incidence of vandalization of ICT infrastructure and severe power challenges for communication infrastructure.” He noted that RoW takes about 60 percent of infrastructure cost.

While acknowledging the pivotal role Broadband will play in the development of the nation’s economy, Director, Human Capital and Infrastructure, Fidelis Onah pointed to insufficient spectrum, funding and slow pace of fibre development due to Right of Way (RoW) issues and vandalisation as key challenges in broadband deployment in the country.

According to Onah, the NCC is reviewing some of its regulations, including issues relating to spectrum trading Framework for National Roaming, to help speed up the process.

Echoing the views of the Commission, the Chief Executive Officer of MainOne Cable Company, Funke Opeke acknowledged that Broadband and its attending infrastructure is capital intensive and having operators borrow funds at about 25 percent cannot solve the infrastructure challenge.

She advocated active infrastructure sharing, noting that this will play a fundamental role in delivery of Broadband.

Managing Director of Vodacom Business Nigeria, Lanre Kolade canvassed for localized data hosting and called for more collaborations between stakeholders, while the regulator creates a level playing field for all operators.

In his submission, Chief Executive Officer of Spectranet, David Venn said Nigeria needs a strong National fibre backbone Carrier to provide fibre optic transmission to all cities. He said operators can latch unto the provision and

Harping on the need for infrastructure sharing, nTel CEO, Kamar Abbas noted that there is an urgent need for the NCC to ensure that infrastructure sharing should not be restricted to passive infrastructure like towers, but should be extended to active infrastructure, including Spectrums, and network equipment. He noted that with operators spending about 30 percent more on FOREX, stakeholders are looking for ways to drastically reduce their OPEX.

Chairman of the Association of Licensed Telecommunication of Nigeria (ALTON) Gbenga Adebayo said the introduction of Data Floor Price will ensure the survival of smaller operators and keep the objectives of the NBP alive.

The Minister of Communications, Barr. Adebayo Shittu assured stakeholders that government recognizes the challenge posed by the high demand for quality access which has exerted enormous pressure on existing terrestrial broadband infrastructure and has taken bold steps to create an enabling environment for interested investors to key into the opportunities presented by the infrastructure gap.

He pointed out that with less than 50, 000 installed base stations, the country still needs between 70, 000 and 80, 000 base stations to substantially cover the broadband needs of the nation. “The Ministry is of the view that the broadband needs of the nation can be better actualized with an appropriate ICT infrastructure design that will incorporate a National Broadband Infrastructure Backbone, Metro/Intra-City Fibre Network, Last Mile services including Fibre-To-The-Home (FTTH) and wireless network as well as Wifi connectivity.”

Further to the cause to ensure the workability of the NBP, the Minister noted that his ministry has already reconstituted the Nigerian National Broadband Council as provisioned by the NBP. The reconstituted Council resolved to declare National Emergency status for ICT infrastructure rollout; review licensing regime to support additional services that can be offered by existing licensees and encourage new entrants; liaise with all state governments in harmonizing fees and charges for Right of Way approval and permits; review all Policies and Laws including the National Communications Act of 2003 and set up an inter-ministerial committee on convergence, among others.

 

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