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Challenges stall performance of $20b broadband investments in Nigeria, others

By Adeyemi Adepetun (Lagos), Nkechi Onyedika-Ugoeze and Beta Nwaosu, (Abuja)
22 July 2015   |   11:32 pm
Utomi wants govt to reposition economy with technology • 52% of country’s population still lack access to Internet • 2018 NBP target not feasible FOR five consecutive years, Nigeria’s five submarine fibre-optic cables expected to facilitate ubiquitous Internet and broadband services, have failed to deliver.     The systems, which came in from different parts…


Utomi wants govt to reposition economy with technology
• 52% of country’s population still lack access to Internet
• 2018 NBP target not feasible

FOR five consecutive years, Nigeria’s five submarine fibre-optic cables expected to facilitate ubiquitous Internet and broadband services, have failed to deliver.
The systems, which came in from different parts of Europe —Portugal, England and others — are MainOne, Glo1, West African Cable System (WACS), South Atlantic 3 (SAT3) and Africa Coast to Europe (ACE).
Going by the capacities of the submarine cable systems, experts believed that a revolution, as witnessed in the mobile phone segment, ought to have been replicated in e-Governance; e-Health; e-Banking; e-Education; telemedicine and e-Security. The revolution would also have allowed Nigerians employ themselves on the back of the immense opportunities the Internet is capable of offering.
Availability of robust Internet service, according to analysts, is also expected to allow skilled diaspora Nigerians contribute to national development.
Besides, they have also posited that broadband will lower the cost of real estate as people will be able to work from anywhere, without necessarily converging in urban areas and needing to commute.
The International Telecommunications Union (ITU) noted that investments in broadband infrastructure and broadband-enabled applications and services facilitate long-term sustainable economic development, economic productivity and growth, and job creation, and generate significant returns. It stressed that investments in broadband are necessary if developing countries are to eradicate poverty and take part in the digital economy of the 21st century.
The World Bank also found a direct correlation between a rise in broadband penetration and increased economic growth, citing China, where a 10 per cent increase in broadband penetration boosted GDP growth by 2.5 per cent.
McKinsey & Company also estimated that bringing broadband penetration levels in emerging markets to today’s Western European levels could potentially add $300 billion to $420 billion in GDP and generate 10 million to 14 million jobs.
As at 2014, investments in submarine cable system across Africa was put at over $20 billion, with Nigeria accounting for about $7 billion including the logistics.
Today, Nigeria is estimated to have over 180 million population; it is interesting to note that while the country has attained 104 per cent teledensity mark with about 145 million active mobile subscriptions, about 52 per cent of the people still lack access to the Internet.
The Nigerian Communications Commission (NCC) statistics put Internet subscriptions at about 88 million of the population in the country. These people mostly accessed the online space through the narrow band, which the GSM platform provides.
Painfully, The Guardian investigations showed that Nigeria’s submarine cable capacity utilisation rate is still less than 10 per cent. This situation, according to analysts is discouraging for an emerging market like Nigeria, considering recent international studies which show a clear correlation between broadband penetration and economic growth.
Indeed, these submarine cables, adjudged to have about 19.2 terabytes and over 340 Gigabytes bandwidth capacities belong to MainOne; Globacom; MTN Group; NITEL and Dolphin Telecoms.
In specifics, the submarine cables included the $300 million 7,000-kilometre MainOne cable, which landed in Nigeria in June 2010; the 10,000 kilometres Globacom’s $800 million Glo 1 cable. It landed in October of the same year.
The worth of NITEL’s South Atlantic 3 (SAT 3) is put at over $600 million and the MTN’s West African Cable System (WACS), cost about $650 million. ACE cable, which was landed in Nigeria by Dolphin Telecoms, cost about $700 million.

While the federal government had set the target of a five-fold increase in broadband penetration, in consonance with the National Broadband Plan (NBP) by 2018, the submarine cable systems have been virtually stranded on the coastline, unable to deliver service to the hinterland, due to the under-developed distribution networks, including national long distance fibre, metro fibre and last mile connectivity, required to push Internet services in-land.
The challenge of underutilisation of the submarine cable systems appeared not peculiar to Nigeria alone. At a global press conference in Johannesburg, South Africa last quarter of 2014, Africa was said to be grossly underutilising 16 submarine cable systems.
While the continent’s submarine cable market is estimated to worth over $20 billion, the operators included the South Atlantic 3; MainOne; Glo1; West African Cable System (WACS); Lower Indian Ocean Network (Lion); African Coast to Europe (ACE); Seacom, EASSy; TEAMS; South Africa Far East (SAFE); West Africa Festoon System (WAFS), among others.
As at today, report has it that the total capacity in sub-Saharan African submarine cable systems increased by 71 per cent over the last five years, with the availability of over 25Tb/s bandwidth capacity.
In one of her interviews with The Guardian, the Chief Executive Officer, MainOne Cables, Ms. Funke Opeke, said years into the landing of submarine cables in Nigeria from separate cable operators, the country was yet to make maximum use of the cable capacities.
Opeke, who disclosed that the firm will be investing additional $300 million in the business, lamented that MainOne was yet to utilise five per cent of its cable capacities, and that the same was applicable to other cable operators like Glo 1, and MTN WACS.
The MainOne CEO lamented a situation where Nigeria has more than enough broadband capacities from several submarine cables at the shores of the country, yet less than 10 per cent of the total broadband capacities from the several cable operators was being utilised in a country of over 180 million persons.
The scarcity of spectrum, according to a telecoms expert, Kehinde Aluko, is also another challenge limiting broadband penetration.
Aluko urged the NCC to play a part in the revolution by making spectrum available. He however, urged them to be very transparent in spectrum auctions.
Also, reacting, the President of the Association of Telecommunications Companies of Nigeria (ATCON) Lanre Ajayi told The Guardian, that broadband service was expected to facilitate the provision of good health, education, agricultural services, adding that it will stimulate economic growth by facilitating cross-industry linkages and improving efficiency.
According to Ajayi, an engineer, Nigeria was yet to benefit from accessible broadband services provided by sub-sea cables due to infrastructural constraints.
Speaking in Abuja on Tuesday, at a two-day Internet Governance Forum 2015, Ajayi said that the FG’s plan to achieve 30 per cent broadband penetration by 2018 may not be realized except urgent steps are taken to ensure accelerated broadband deployment across the country.
He specifically urged that FG to create the right environment for the operators to enable them deploy the right infrastructure for more access to broadband services.
Ajayi noted that Nigeria currently have less than 10 per cent broadband penetration which is very poor, when compared to other African countries, noting that Ghana already have 30 per cent broadband penetration, while Nigeria which is supposed to be the giant of Africa boasts of less than 10 per cent.
“The plan was from 2014 to 2018. At the time the plan was being formulated, in 2014, broadband penetration was at six per cent, now it is merely 10 per cent. If you project it at the rate at which we are going, you will realize that achieving that 30 per cent in 2018 will be very difficult except something change drastically. It is not impossible but we cannot continue to go at the speed at which we are going. Really, we need to accelerate, create the right environment.

“The difference between the regular internet access and broadband access is that broadband access is a fast Internet, faster than regular Internet. For regular Internet, it is true we have more than 50 per cent penetration but for broadband access, it is also what we need is broadband access. What we need to do is to get every Nigerian to have access to broadband internet. With broadband, you can get almost everything done; you can even do your voice, skype, whatsapp calls and so many others. But on the narrow band internet, you have lots of limitations, that is why we need to emphasize access to broadband for our people”, he stated.