Why Nigeria may miss 90% broadband target

The failure of the seven companies licensed by the Nigerian Communications Commission (NCC) to provide infrastructure across the country to deepen access to telecom services may derail the Federal Government’s 90 per cent broadband target of 2025.

Known as infrastructure companies (InfraCos), the initiative was started during the latter days of the late Dr Eugene Juwah as the Executive Vice Chairman of the NCC but was embraced and reviewed when Prof Garba Danbatta took over from him.

The idea was to license one InfraCo for each geo-political zone of the country and offer a licence for Lagos because of its strategic position to the economy.
Thus, MainOne got an InfraCo licence for Lagos, Zinox Technology Limited got for Southeast and Brinks Integrated Solutions Limited for Northeast.

Others are O’dua Infraco Resources Limited for Southwest, Fleek Networks Limited for Northwest, Raeana Consortium Limited for Southsouth and Broadbase Communications Limited for Northcentral.

Brinks Integrated Solution, which has licence for Northeast, is expected to cover Adamawa, Bauchi, Borno, Gombe, Taraba and Yobe states. Fleeks Networks Limited with Northwest licence will provide services to states, including Jigawa, Kaduna, Kano, Katsina, Kebbi, Sokoto and Zamfara

Southeast, which is being handled by Zinox Technologies Limited, would provide infrastructure to Abia, Anambra, Ebonyi, Enugu and Imo states while Raeana Consortium Limited would focus on Southsouth states of Akwa Ibom, Bayelsa, Cross River, Delta, Edo and Rivers.

Broadbase Communications was initially expected to cover Benue, Abuja, Kogi, Kwara, Nasarawa, Niger and Plateau states but had been asked by the Communication to focus on Abuja the way MainOne is focusing on Lagos. Through the open access model, they were licenced to provide Layer 1 (dark fibre) services on a commercial basis with a focus on the deployment of metropolitan fibre and transmission services, available at access points – Fibre-to-the-Node or neighbourhood (FTTN) – to seekers.

Each InfraCo licence attracted N2.5 million for a 20-year tenor and was subject to renewals. However, there are other payments that follow such as administrative fees.

Danbatta had said the Commission deliberately placed N2.5 million on the licence because it was not designed for revenue generation but to close the access gaps in the country.

He said: “It is affordable so that interested entities within and outside Nigeria can come and obtain it, which is the most important thing. There are several other licenses at the Commission that are very costly.”

You can investigate the life span of a fibre cable. So, we need to allow licencees time to recoup their investment in laying the fibre. Everything about the InfraCo project was done scientifically and with due consideration of affordability.”

But almost one decade on, the project has not taken off making it difficult for any of the licensees to access the counterpart funds of N64 billion earmarked for the project by the NCC. The counterpart funds would only be made available when the projects achieve certain milestones set by the Commission.

Factors such as insecurity, foreign exchange (forex) scarcity, consistent naira devaluation and the fear of return on investments (RoI) especially in rural areas where service deployment promises little prospect of returns.

“Can you invest in regions where kidnap-for-ransom has become a big business? Go and do your checks, apart from Lagos and Southwest that appear relatively peaceful, other regions have continued to battle one form of insecurity or the other. In some states, telecom services were shut down completely at a point in time to contain the activities of bandits.

There is wilful infrastructure vandalism too,” an operator said on condition of anonymity.

The NCC said broadband penetration in the country has increased from six per cent in August 2015 to 48.21 per cent by March of this year, hoping the figures would continue to grow