In the strategic wisdom of the lead telecoms regulatory agency, the Nigerian Communications Commission (NCC), it structured what it called Infrastructure Companies (InfrCos) to drive the deployment of broadband infrastructure across the nation about 10 years ago.
However, that has not been able to happen over the years, thus raising questions and issues in the industry.
While structuring the idea, the Commission considered the facts that size and complexity of the country will make it difficult for a single nationwide InfraCo, bearing in mind issues like Topography and Socio-economic factors.
Also, to address the difficulty of Local regulatory requirements, taxes and fast track Broadband penetration, the Commission developed a structure to license a total of 7 InfraCos (One InfraCo per geopolitical zone + One InfraCo for Lagos because of its peculiarities).
However, the implementation of the initiative was designed to be based on phased deployment strategy that focuses on commercially viable areas first.
Business Hilights gathered during the cause of this investigation that the key objectives of the Broadband initiatives through the InfraCos project are as follows:
To increase broadband penetration across all geo-political zones of the country,
At the end of the four year intervention, all the 774 LGAs will be provided with fibre connectivity.
Deployment of at least one fibre Point of Access (PoA) in each LGA across the Country. Each fibre PoA will have a capacity of 10 Gbps, and
It is also on record that the NCC has made presentations to the National Economic Council (NEC) and the Nigerian Governors Forum (NGF) on its Broadband initiatives.
For instance, on May 17, 2018, the Commission in collaboration with the National Industrial Policy and Competitiveness Advisory Council made a presentation to the NEC on improving Broadband Penetration.
In the presentation, the NCC highlighted key issues that need to be resolved to improve Broadband Penetration; Notable amongst is Right of Way (RoW) and Security of ICT infrastructure.
Also, the NCC made prayers on the key issues during her engagement with NGF.
Otherwise, On June 27, 2018, the Commission made a presentation to Nigerian Governors Forum (NGF) on Broadband Deployment in Nigeria.
In the presentation, the NCC highlighted the encumbering challenges in the deployment of Broadband Infrastructure in Nigeria, which amongst others include; high RoW charges, multiple regulation & taxation, and delay in obtaining site acquisition permits.
Therefore, the Commission appealed to the NGF that our prayers (as approved by NEC), especially on the hamonization of N145/m RoW charges, be given the maximum priority it deserves to enable us mitigate the Broadband Infrastructure challenges, so as to achieve the much needed ICT infrastructure for social and economic transformation of our country.
The Commission’s Prayers to NGF are on:
Ensuring compliance to NEC’s resolution om harmonization of Right of Way charges on State Government highways with the Federal at the cost of N145/m, Assigning a Single Point that will approve RoW applications, Limiting the approval process on RoW to a maximum of 30 working days, Mandating the installation of utility ducts on road shoulders and buildings during construction and rehabilitation, Elimination of Multiple Taxation, and Elimination of Multiple Regulations.
Submission made by the six licensed InfraCos relating to the Capital cost (Capex) for the project for four years, subsidy requirement, network design and roll out plan were reviewed.
There is a subsidy provision created in the 2017 Budget to the tune of N3 billion and a plan for more in subsequent budgets of the NCC.
The Capex submissions were found to be high, based on the network design assumptions of multiple PoA’s per LGA and other equipment costs.
InfraCos were requested to submit revised financials, network design and rollout plan based on, one PoA per LGA only for subsequent review.
Four out of the six InfraCos have re-submitted their new financials as requested, review has begun towards the negotiation of percentage subsidy to be considered for their respective zones.
It is important to note that at the end of the subsidy negotiation, Subsidy Agreement Documents shall be signed to kick start the project for each zone.
NCC said the subsidy negotiation and signing of Subsidy Agreement are currently ongoing, but industry observers say the negotiation has become endless.
Based on the speed of re-submission received from the respective InfraCos and the conclusion of the subsidy agreement, NCC had expected that the project will kick off before the end of 2018.
But since the end of the above paper works in 2018, nothing has been done by any of the Infracos.
Considering the cold feet of these licensees, industry observers have started thinking that they may not roll out after all, thus igniting the fears of possible return of licences any time soon.
The fear is higher when one considers that the initial lifespan of the licenses is about 10 years.
The ultimate imperatives for Open Access Model objective, is to realize affordable prizing, high speed connectivity, high level of coverage and targeted government support.
MainOne (now an Equinix Company) and IHS Limited got the first two licenses to cover Lagos and the North Central zone including the Federal Capital Territory (FCT) respectively in November 2014.
In a recent media chat with Mainone, an Equinix Company, the General Counsel, Mr. Abayomi Adebanjo made it clear that the will in 2023, make a business decision on the InfraCo licence.
Business Hilights recalls that after about three years, IHS returned the license to the NCC over difficulties in securing the right of way approval to deploy infrastructure in the North Central Zone.
Other licensed InfraCos are Zinox Technology Limited for Southeast and Brinks Integrated Solutions Limited for Northeast.
O’dua Infraco Resources Limited is meant to serve the Southwest, Fleek Networks Limited for Northwest and Raeana Consortium Limited for South-South.
Whereas Broadbase Communications Limited had last recently picked up the license for parts of the North Central, there had been nothing on ground to show for it.
The InfraCo license costs about N2.5 million for a 20-year period and is subject to renewals even as the first 10 years is going without anything to show for it.
Besides, there are other payments that follow such as administrative fees.
Even though recently some governors have commenced a review of Right of Way (RoW) fees downwards, experts say despite the RoW, the height of insecurity nationwide cannot allow for any meaningful investment at a time forex is at running amorc.
Accordingly, whereas a lot of experts accuse the regulator, NCC, and by extension, the Minister of Communications and Digitqal Economy, Mr. Isa Panatmi of not doing much to persuade states fall in line with cheaper RoW, the prevailing forex crisis and insecurity may force forward minded InfraCos to take a business decision in which returning the licenses may be an option in 2023 after all.
