Last mile infrastructure stalls $3b submarine cable investments
• Despite over 50TB bandwidth capacity, varsities, airports, hospitals yet to connect
• InfraCos reluctant to move to site despite NCC directive
• Lack of counterpart funding will stall service expansion, say experts
• FG commits to N390/GB by 2025 as competition drags services
• NCC assures underserved areas of broadband availability
Dearth of last mile infrastructure in Nigeria appears to be stalling full utilisation of the various submarine cable systems, which have berthed at the nation’s shores.
Last-mile infrastructure means broadband facilities that serve as the final leg connecting the service provider’s network to end-user’s on-premises telecommunications equipment.
This challenge remains a source of worry to government and operators, as it has hindered nationwide connectivity. What has become the irony of Nigeria’s poor broadband penetration is that in abundance of submarine cables, with volumes of terabytes, citizens hardly get enough bandwidth to do their daily Internet activities. The Guardian checks showed that as of 2021, while there were approximately 436 submarine cables in service around the world, Nigeria currently has SAT3 cable, MainOne cable, Glo1 and Glo 2 cable, ACE cable and West African Cable System (WACS) cable, which were landed by Natcom, MainOne, Globacom, Dolphin Telecoms and MTN respectively. Earlier in the year, Google announced the arrival of its 12,000km Equiano cable in Nigeria.
Undersea cables, which consist of several strands of fiber optic cable surrounded by a protective covering, are a critical part of the global telecommunications infrastructure. Used to connect the land-based telecommunications net
works of different countries that are separated by large bodies of water, these cables are laid on the seabed, stretching between countries’ coastal landing stations.
From about $1 billion investment some four years back, today, the investments in the various submarine cables that have landed in Nigeria have exceeded $3 billion going by available data.
Specifically, the cost of SAT3 fibre optic cable, which now belongs to ntel, is put at $600 million. MTN’s WACS costs $650 million; ACE cable, by Dolphin Telecoms, is worth $700 million; while MainOne gulped $300 million. The cost of Globacom’s Glo1 cable is estimated at $250 million, Glo 2 is expected to be in that range.
Though the estimated investment of Equiano cable is not public, Google informed that the facility is part of the $1 billion investment support for digital transformation across Africa.
Meta’s (Facebook) $1 billion 37,000-kilometer undersea cable is coming to Africa cum Nigeria and should go live by 2023.
The submarine cable systems are said to have bandwidth capacity potential in excess of 50 terabytes, and should be responsible for providing high speed Internet services in the country, but one of the operators hinted that only about 10 per cent of the existing capacity has been utilised thus far.
While there has been revolution in the mobile phone segment, over two decades now, such a feat is however, not replicated yet in e-governance, e-health, e-banking, telemedicine and e-security, which are supposed to be Internet/Broadband enabled.
Except for e-learning that saw some level of improvement due to the COVID-19 pandemic, which forced the new normal on the people, where students had to be taught virtually for close to a year and meetings were conducted via the web; e-security on the other hand has not taken-off in Nigeria, as evidenced by the rise in criminal activities, especially kidnapping.
More worrisome is the fact that these operators claimed they are yet to break even, let alone making substantial profit after years of investment.
Consequently, while there is a glut in bandwidth capacities at the shores, network expansion to hinterlands and expected fall in prices of subscriptions that would fuel explosive growth in mobile broadband and other Internet-related services, are still seriously constrained.
Already, some 114 access gaps still exist in Nigeria with some 25 million people still lacking access to basic telephone services.
Amid this, a larger section of the country believes the cost of data is still very high, though, through the National Broadband Plan 2020 to 2025, the Federal Government has said by 2025, Nigerians should be able to buy a gigabyte of data for as low as N390. Operators are gradually democratising the prices, but consumers are more worried that even at that, their data burn off as fast as possible before the due date.
The World Bank, meanwhile, has found a direct correlation between 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 noted that bringing broadband penetration levels in emerging markets to today’s Western European levels could potentially add between $300 billion and $420 billion in GDP and generate 10 million to 14 million jobs.
The Guardian findings revealed that dearth of last mile infrastructure could be a major impediment to Federal Government’s plan of 70 per cent broadband target and 90 per cent population coverage.
To make things worse, the Nigerian Communications Commission (NCC)-licenced Infrastructure Companies (InfraCos) are extremely reluctant to move to site, citing several issues, including insecurity, lack of funds, low capacities and topography of area to be covered, among others.
The InfraCos, consisting of seven ICT/telecoms firms, have been licenced by NCC to ensure wholesale broadband deployment across the country, especially in Nigeria’s 774 councils.
For operators, the licence costs N2.5 million for a 20-year period and is subject to renewals. However, there are other payments that follow as administrative fees. The InfraCos are to cascade broadband infrastructure to the hinterland.
The InfraCo project started at the latter part of the administration of former NCC Executive Vice Chairman (EVC), the late Dr. Eugene Juwah, in 2015, but it was reviewed, expanded and given a boost by the current EVC, Prof. Umar Danbatta.
Checks by The Guardian showed that while some licencees got theirs about three to six years ago, which had been subjected to several reviews, the seventh licence was awarded early last year.
Feelers from the industry suggest that some of the regions could have been divided into units, to necessitate more InfraCos, in addition to the current seven. Sadly, 80 per cent of the already licenced operators are yet to commence operations, this is even as they were handed five months from last December to begin deployment.
On the challenges of last mile infrastructure, the Director, West Africa at Google, Juliet Ehimuan, during the unveiling of Equiano submarine cable system in Lagos, told The Guardian that indeed, last mile is an issue in the country, stressing that to realise the benefit of the cables with end users, capacity needs to be transmitted to every part of the country.
According to her, looking at the end-to-end value chain of Internet infrastructure provision, there are different points, while Equiano is taking care of the international leg.
She said capacity also needs to be distributed and that is why Google is open and looking forward to partnerships with telecom operators and Internet Service Providers so that they can take advantage of the additional capacity and make an impact in terms of last mile.
Ehimuan explained that there are so many factors that influence last mile, which is something government, regulators, relevant ministries and service providers in the private sector are working through.
“We have ease of expansion, Right of Way, different levels of taxation, protection of cable infrastructure when you have road constructions, infrastructure sharing and power (cost of powering base stations). So, these are some of the factors that come to play when you look at metro access and there are different stakeholders looking at that.”
According to her, there is research, which claims that in Africa, over 300 million new people will come online in the next five years, as the demand for Internet, broadband services will increase.
“So, these additional capacities will serve to support the demands. It is an additional capacity that will be of immense help, but we must tackle the issue of the last mile.”
The Google boss said there won’t be capacity glut in the country because of the huge market potential Nigeria has got. “We are already seeing some of the amazing things happening online. Think about video and all the great contents shared on YouTube (which are Nigerian by the way). I believe that as awareness increases, challenges solved, more Nigerians are still coming online to create opportunities for themselves. So, it is really important that there is capacity and underlining infrastructure, especially the last mile to really serve these demands,” she said.
According to a senior telecoms expert and a Chief Executive Officer in the industry, who pleaded anonymity, expansion of telecoms services, especially broadband, requires funding.
“What you are saying about last mile connectivity involves huge funding, which we are not getting, even from the banks,” he stated.
The expert said the Federal Government InfraCo project in the telecoms industry would have been able to bridge the last mile gap, but it has been threatened by funding. He noted that in climes such as the USA, UK and the EU, there are budgets for projects such as broadband expansion, but that is seriously missing here.
He said the planned digital economy of the Federal Government would only succeed if the infrastructures are in place, especially broadband.
“It must also be stated that fibre is a long-term investment, it requires funding and differs from what the bank can afford to do. It requires the funding that government and multinationals can give to service providers at low interest rates. The problem is that when they see the mobile network operators (MNOs), they say there is no investment required in the sector again, but they have forgotten that what the MNOs did was to provide mobile connectivity.
“There is no 4G without fibre to base station, there is no 5G without fibre to base station, then where is the money going to come from? The whole Sustainable Development Goals, all of them ride on ubiquitous broadband infrastructure (health, education, agriculture, girl-child education, women empowerment and even security), the challenge of expansion is an issue of funding.”
The telecoms expert admitted that there are policies on ground, “but no funding or support for players in the sector. So, all these capacities that have been dropped at the sea shore would get to other part of the country when the funds are available.”
According to him, long haul is expensive, stressing that if an operator goes to lease capacity from any of the long haul service providers, “if you mention 10GB, you will need to sell your house. There are no regulated rates. The NCC should come out with metro fibre regulated rate and long haul regulated rate.
“As we speak, there is none of such and we have been talking about this for long. The same way voice service was regulated is the same way the other sector should be regulated. The regulated rate will give us stability.
“The money required for fibre business is a long-term fund and low interest rate. What we can get from local banks are short-term funds and high interest rates. So, on this issue of fibre deployment, unless there is funding with concessional financing, nothing will happen. Fibre is a long-term investment, it is not like export and import.”
On his part, the Executive Secretary, Association of Telecommunications Companies of Nigeria (ATCON), Ajibola Olude, said it is unfortunate that the country has not been able to spread the over 45 terabytes of bandwidth brought into the country by submarine operators.
He admitted that the challenge of spreading this huge capacity will remain until the issue of RoW is addressed, stressing that only few states have agreed to charge N145 per linear meter.
According to him, the issue will be addressed if all the state governments are ready to adopt Broadband as a critical tool for the development of their respective states.
“Other challenges that are responsible for the slow deployment of Broadband are multiple taxation, lack of foreign exchange, poor power generation and a host of others.
“The current national broadband plan is already impacted negatively because FOREX is needed to import equipment. Another issue that has affected the national broadband plan is the continuous devaluation of our national currency (Naira). The operators are afraid to take loans because loans are in dollars and if you notice, the price of a dollar to naira has continued to be on the increase. With all these challenges, expansion, especially the last mile would be a challenge.”
MEANWHILE, the NCC has assured underserved communities in the country of broadband services. According to Danbatta, the Commission is mindful of the infrastructure gaps in the country and therefore, committed to driving the national digital economy to the grassroots.
“As a Commission, we have a mandate to ensure availability of universal access to telecom services irrespective of circumstances and location of Nigerians and other users in Nigeria. I can inform you that voice communications enjoys over 100 per cent penetration,” Danbatta stated.
The EVC of NCC, who spoke through Freda Bruce-Bennet of the Digital Economy Department, reiterated the Commission’s focus in supporting the quest for financial inclusion through provision of robust infrastructure such as broadband.
Bruce-Bennet said the Commission has been at the forefront of driving technology platforms required to drive increased access to financial services by all and sundry.
Related
Get the latest news delivered straight to your inbox every day of the week. Stay informed with the Guardian’s leading coverage of Nigerian and world news, business, technology and sports.
0 Comments
We will review and take appropriate action.