Internet coverage slows as states obstruct fibre rollout

About 156.4 million Nigerians, out of a population of 170 million, the bulk of whom are rural dwellers, have no access to real broadband connectivity, due to the refusal of some state governments and their respective agencies to speed up the process of granting Right of Way (RoW) permits required for the deployment of requisite fibre infrastructure, BusinessDay can now reveal.

Market observers are of the view that Nigeria may fail to meet the broadband targets clearly outlined in the National Broadband Plan (NBP) as state government apathy towards the implementation process continues to hinder network rollout timelines set by Mobile Network Operators (MNOs).

Omobola Johnson, minister of communications technology, has been promoting the ‘Smart State’ initiative; a campaign geared towards engaging state governors and relevant authorities at the state level to address the issue of multiple taxation impeding the rollout of critical infrastructure across the length and breadth of Nigeria. 

Already, three states,  Lagos, Cross River and the Federal Capital Territory (FCT) have signed the Memorandum of Understanding (MoU) with the ministry. Meanwhile, the initiative is being tested in Anambra, Bayelsa, and Ondo. Omobola Johnson, minister of communications technology, had earlier said that unless more state governments agree to come on board the initiative,  Nigeria’s quest to become a digital economy may be derailed. 

Majority of the country’s 36 states continue to shy away from participating in the initiative due to political affiliations and sentiments, and the lure of multiple taxation, which helps them boost their Internally Generated Revenue (IGR). 

The Federal Government has already set a target of a five-fold increase in broadband internet penetration by 2017. Nigeria, Africa’s largest economy by GDP, currently has an abysmal broadband penetration of 8 percent, according to statistics from the ministry of communications technology. 

In recent times, MNOs have accused various state governments of slowing down the process of RoW approvals by deliberately imposing unnecessary and inordinate taxes on them, even after long months of deliberations on the economic benefits of increased broadband infrastructure.

BusinessDay further gathered that lengthy approval timelines, which in some cases take up to two years, also contribute greatly to the escalation of costs in the rollout of broadband internet networks. This situation, they say, makes it difficult for MNOs to lay fibre cables in order to facilitate the delivery of internet services to homes, schools, hospitals and offices.

RoW is a legal instrument allowing operators to deploy infrastructure on federal or state roads at a fee. “We have sufficient broadband capacities sitting on our shores, but distributing the capacities through a national backbone and last-mile connectivity is a major issue for us”, said Olajide Aremu, director, network operations for Globacom. 

“This is because of the outrageous taxes imposed on telcos by state government agencies and the refusal to speed up the process of granting RoW approval by the same state government agencies,” he added. The national broadband plan also has eyes fixed on the attainment of an 80 percent growth penetration in 3G services by 2018.

The said target will remain a tall order for the industry, considering the high cost for procuring RoW for laying infrastructure, and sites for Base Transceiver Stations (BTS). 

Available statistics show that the cost of obtaining RoW could account for as high as 50 to 70 percent of the total cost of deploying fibre in states of the federation. BusinessDay found out that the cost of procuring RoW in Ogun State for metro fibre deployment is as high as N6, 500 per metre. Only recently, the Osun State Government vowed to confiscate the base stations of MTN Nigeria, over its failure to pay the RoW permit fees due to the state, to the tune of N399.4 million.

According to market observers, the country’s ability to meet the outlined broadband targets and objectives are dependent on the speedy removal of major operational bottlenecks, including multiple taxation, delays in site approvals, inordinate RoW charges.

These operational challenges hinder the effective and efficient deployment of critical network (fibre) infrastructure across the length and breadth of Nigeria. This year, the Federal Government, through the Nigerian Communications Commission (NCC) is planning to license Infrastructure Companies (InfraCos) to assist in the speedy deployment of broadband fibre in all the six-geopolitical zones.

Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON) is however of the view that the Federal Government should move beyond granting of additional licenses to eliminating those operational barriers such as bottlenecks in securing RoW, which impede smooth network operations.

According to Adebayo, operators with deep pockets, who have secured licenses to roll out broadband services are yet to invest in fibre deployment due to the clumsy process of securing RoW from various state agencies. These InfraCos will be faced with similar operational challenges, he said, adding that there is need for well articulated policies so as to encourage investments. Despite the fact that sufficient international bandwidth has been achieved with multiple cable landings on the shores, excessive upfront charges for RoW for national fibre cable roll-out initiatives, have hampered efforts to push these capacities into the hinterland.

“We have been confronted with the issue of multiple taxation at the various strata of the government. This has contributed its own challenge to quality of service, as the spread of these critical infrastructure is restricted on account of some of these actions,”said Eugene Juwah, executive vice chairman of the Nigerian Communications Commission (NCC).