Nigerian Communications Commission (NCC), in August 2012, announced the adoption of an ‘Open Access Model’ approach as a measure to provide ubiquitous and affordable broadband services in the country.
The key elements driving the objective focus on open access deployment of fibre infrastructure, is to achieve high level of penetration across all geo-political zones, contribute to GDP growth and development of knowledge economy, provide commpetitive and affordable pricing, and ensure intelligent incentives to support industry players while equipping Nigeria with leading infrastructure in Africa.
The ultimate imperatives for this objective, is to realize affordable prizing, high speed connectivity, high level of coverage and targeted government support.
NCC made frantic and graphic representation of the mapping where the Commission would be responsible for provision of licenses, regulation of services, and facilitation of agreements.
This relationship was supposed to be guided by an industry structure of the open access model of the type being implemented in Australia which involves provision of non-discriminatory broadband access and services to end users, and provision of non-discriminatory equal wholesale broadband connectivity using active infrastructure, while NetCos build and operate passive infrastructure.
There is no gainsaying that global phenomenon such as the scissors effect and economic recession pose significant threat to the capacity to finance broadband infrastructure developments, especially for nationwide rollout. This, was probably chief among reasons NCC adopted the Open Access Model that would led to Infrastructure Companies (InfraCos) rolling out services at regional approach with Lagos having a special attention.
Years down the line, State Governments seem to have orchestrated means to arm-twist the InfraCos thereby frustrating the NCC’s move.
Recall that NCC has gone ahead to license six (6) InfraCos across the six geo-political locations of Nigeria, with additional InfraCo to operate in Lagos.
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.
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.
TechEconomy gathered that Broadbase Communications Limited last year picked up the license for parts of the North Central.
However, rolling out has not been easy for InfraCos despite a longer tenor and cheaper license costs.
The InfraCo license costs about N2.5 million for a 20-year period and is subject to renewals. However, there are other payments that follow such as administrative fees.
Until recently when some governors commenced a review of Right of Way (RoW) fees, the cheap licenses were undermined by huge RoW fees.
How States frustrate InfraCos
You remember this photograph, right?
Around January 2020, Prof. Isa Pantami, the Minister of Communications and Digital Economy, and Prof. Umar Danbatta, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), in Abuja, met with the Governor of Ekiti State and Chairman of the Nigerian Governors Forum, Dr. Kayode Fayemi (he has since handed over as both Governor and the chairman of NGF).
The meeting, it was disclosed is a follow-up to discussions on how to address the issue of Right of Way (RoW) and other similar challenges confronting the telecoms industry.
Recall that 14 state governors and their agencies increased Right of Way charges, which is pegged at N145 per linear metre by the Federal Government. The states, according to reports are Lagos, Kano, Anambra, Ondo, Cross River, Kogi, Osun, Kaduna, Enugu, Adamawa, Ebonyi, Imo, Kebbi and Gombe.
This drew the ire of various stakeholders in the Information and Communications Technology sector who described the action of these governors as an affront and disregards to an earlier resolution reached by the National Economic Council (NEC).
Well, there were some positives from Pantami and Danbatta’s neeting with the then NGF Chairman. However, an industry play (who prefers to remain anonymous) confided in TechEconomy that some States that had agreed either to bring RoW charges to N1 per linear meter or outright removal of the charges, have resorted to gimmicks to frustrate the operators.
For instance, an InfraCo has entered into agreement with a State in the Southern part of the country for possible collaboration to lay metro fibers. While the InfraCo has sourced fund and was ready to embark on the phase-by-phase deployment of fibre cables and building of ducts, the State, through its Agency, started rolling out such infrastructure.
The State, according to our source, insists that the InfraCo must patronize them or they will be frustrated from using the NCC InfraCo license to commence the process.
“And the price the State wants to rent the infrastructure to the InfraCo is very high. It is not acceptable. NCC needs to find another means to get the States to support the InfraCo model because as it is today everything is on a standstill”.
The InfraCo project, which has dragged on for over seven years now, has become a source of worry to the telecommunications industry. This is even as broadband penetration and speed continue to gallop.
“The slow take-off of the InfraCos can also be attributed to other challenges such as insecurity, foreign exchange (forex) inconsistencies; poor projected return on investments (RoI) because people’s purchasing power is getting lower. The truth is that some regions are less viable. You also have to consider the fact that licensees have not been able to access Nigerian Communications Commission (NCC)’s N64 billion counterpart funding (subsidy) for the project.
In conclusion, NCC came up with a brilliant idea called InfraCos under its Open Access (infrastructure) Model and has gone ahead give license to operators for the 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.
The InfraCo Project is considered as the beginning of the “Next Level” journey towards achieving the 120,000km target of fibre connectivity set by the current administration. However, we believe the lack of political will on the side of the States, among other challenges, must be urgently addressed so that the InfraCos can ‘commence’ business as expected.