States’ indifference compounds delays in InfraCo take-off
•MainOne to make business decision on license at right time
MainOne, an Equinix company, has explained its inability to roll out services with its Infrastructure Company (InfraCo) license. The firm, which explained that the challenge cuts across the entire region, even with other licensees, stressed the regulatory and fiscal challenges regarding InfraCo model.
Recall that MainOne and IHS were the first set of companies that were awarded the licenses as far back as 2014 during the tenure of the late Executive Vice Chairman of the Nigerian Communications Commission (NCC), Dr. Eugene Juwah. IHS however, returned the license citing several bottlenecks to its roll out plan in the area given.
The entire process was later reviewed and given a fillip by the NCC under the leadership of Prof. Umar Danbatta, where more licenses were issued on regional sub-regional basis. But almost a decade since the process started in the country, several issues have stalled the eventual take-off of the project, making it difficult for InfraCos to summon courage to roll out.
Indeed, in Lagos, during an interaction with journalists, General Counsel, MainOne, Abayomi Adebanjo, said the inability of the firm to begin service with the license had to do with regulatory issues, with respect with procuring ROW with the Lagos State Government.
Adebanjo stated that notwithstanding the non-issuable of ROW in Lagos State, the Regulator together with InfraCo and the State continues to actively seek constructive options of solving the impasse. He mentioned the proactive steps taking by the Regulator but noted that these steps were yet to yield any results. Adebanjo also mentioned that the fiscal incentive in the form of counterpart funding, which was in the original construct of the InfraCo model was another challenge. He however, noted that MainOne is ready to do business.
He noted that despite appreciable gains through the reduction of Right of way (RoW) charges, the cost of infrastructure build remained expensive because of other government taxes costs layered into. According to him, I as regards roll-out of InfraCo in Lagos State, Lagos State Government had chosen to different strategy with regards infrastructure build model by embarking on a concession programme under the Unified Duct Infrastructure Project however MainOne continues to partner with the State on other several projects including delivering best in class services to several parastatals as well as its Chief Executive Officer, Funke Opeke, heading the Vice Chairmanship position of Lagos State KITE for Yaba redevelopment .
“There are a number of issues. I mean the InfraCo license has several layers of issues stalling its take-off in the country. One is the regulatory issue. As you are aware, we have the license but we have not been able to do anything with it because of the Right of Way challenge. “Even though InfraCo is a Federal Government agenda, you still need the state to be involved and Lagos State Government decided for itself to move in a different direction with the Fibre Duct agenda, which has been concessioned and that is the direction that they have gone. So, there is a big regulatory gap on RoW issuance,” he stated.
However, he said the NCC is aware of these challenges, stressing that in fairness to the commission, it had continued to also discuss and push all the different states to make the licenses operational and allow InfraCos move to underserved areas.
“What we see largely is the non-alignment of FG with State Governments. Lagos has seen the direction that is best for them. Did it affect us? Yes, it did hurt our business, but there are other complimentary services that we can provide for the state.
“InfraCo will remain an issue the Federal Government would need to work around and solve the problems confronting it, especially RoW with the states. But we are committed to doing it if we are handed the opportunity,” he stated.
Adebanjo, who ruled out selling the license to another operator, said at the appropriate time, “MainOne will make the best business decision on the license at the point we consider it is no longer viable, but we are going to be objective and rational in the interest of all stakeholders.”
Earlier in the year, The Guardian had reported how topography and insecurity had forced some licensees to return the license.
Then, two operators cited the high level of insecurity and the topography of the individual regions under their purview as reasons for the return of their licenses.
Also, the issue of vandalism of telecoms infrastructure, which has refused to abate in these regions, coupled with delays at the ports for customs clearance and the challenge of foreign exchange scarcity, as part of the considerations on the part of the licensees.
The licensed InfraCos are MainOne for Lagos, Zinox Technology Limited 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 South-South and Broadbase Communications Limited for parts of the North Central.