Broadband provisions and tasks before InfraCos
The issuing of Infrastructure Company (InfraCo) licences to two telecommunications companies shows that the country is set for pervasive broadband infrastructure expansion, but the challenges before the licencees, though surmountable, but huge. ADEYEMI ADEPETUN writes
UBIQUITOUS Broadband, faster speed, reliability and affordability of services are capable of driving increased participations in the digital economy, translating into social and economic growth and an enhanced Gross Domestic Product (GDP).
Globally, broadband facilitates e-commerce, e-education, e-entertainment, e-health and e-government – the smart world as it is commonly referred to, where online activities bring about huge efficiencies in daily activities and also create new opportunities.
Greater access to the Internet and broadband applications and services has been found to also help accelerate achievement of internationally agreed development goals, including the Millennium Development Goals (MDGs).
Indeed, in Nigeria, the recent licensing of MainOne Cables and IHS Consortium, as two fibre infrastructure companies (InfraCos) for Lagos and North Central zones respectively by the Nigerian Communications Commission (NCC) is seen as another step that will aid the achievement of pervasive broadband in the next few years in the country.
The announcement of the successful winners, in the first phase of the InfraCo licensing exercise was disclosed in Lagos, last month at a stakeholder forum by the Executive Vice Chairman of the NCC, Dr. Eugene Juwah.
According to Juwah, “After about six months of paper work and rigorous evaluation process for the selection of the licensees for the country’s improved broadband provisioning, MainOne Consortium and IHS Consortium have been selected as InfraCos for Lagos and North Central respectively.”
He assured that the licensing of other five InfraCos for North West; North East; South South; South West and South East zones would be completed before the end of the year.
Though, the country increased its broadband penetration from six per cent to eight per cent by the end of 2014, the national target is to achieve 30 per cent penetration by 2018, according to a five-year National Broadband Plan (NBP) approved by President Goodluck Jonathan in 2013.
Consequently, Juwah said that the InfraCo policy has been designed to fast-track NBP target, saying necessary spectrum auctions, such as the 2.3GHz spectrum licensed to Bitflux in February 2014, would be carried out to accelerate ubiquitous broadband access.
The country currently boasts of over 11 terabytes of internet bandwidth in-country brought about by the landings of several high capacity submarine cable systems that have slashed wholesale international bandwidth cost by well over 42 per cent in the past years.
Pattern of services
The InfraCo licensees, according to the regulator, are expected to deploy Metropolitan Optic Fibre Infrastructure and Associated Transmission Equipment on an open access, non-discriminatory price-regulated basis in the state and region respectively.
Juwah, had stated that the open access model has been considered as a strategic means for the deployment of optic fibre backbone transmission infrastructure network in Nigeria.
This, he said, is expected to bridge the current broadband gap in the country, facilitate the development of local content and deliver cost effective services to households and businesses.
As such, the success of the process would address the challenges of fibre deployment in towns and cities, promote infrastructure sharing, reduce Right of Way (RoW) issues and transform the beneficiary states to smart states, among others.
The activities of the InfraCos shall be complimentary to the existing integrated operators that offer end-to-end services and long distance operators offering whole sale services, even as the licensees are also expected to specifically bridge market gaps in the metropolitan and regional fibre segment as well as provide end-to-end transmission services, to be available at point of access (PoAs), to access seekers.
Strictly, the InfaCos shall deal with wholesale wireless last mile operators, retail service providers (RSP), independent operators/wholesale operators who require leasing transmission services and other access seekers such as vertically-integrated operators.
To market observers, the challenge before the InfraCos is huge and such would require concerted efforts to overcome.
The argument, according to them, is that if those who had gotten license to provide one broadband service or the other after one, two and three years ago have not been able to achieve any meaningful feat by now, how fast can the the InfraCos deliver.
On Monday, while NCC went to defend its 2015 budget proposal at the National Assembly, the Senate described as worrisome the poor access of Nigerians to broadband services despite the number of undersea cables running across the country and the huge investments channelled into the project.
The Chairman, Senate Committee on Communications, Senator Gilbert Nnaji, noted with concern that the country finished the year 2014 with just eight per cent broadband penetration, having stagnated at six per cent from 2011 to 2013.
Indeed, chief of the challenges before ubiquitous broadband in Nigeria is ineffective distribution and transmission of the available bandwidth inland. This has continued to make accelerated expansion of broadband Internet access at more affordable end-user price a major challenge and a barrier to faster realisation of the desired boom in the country.
Though, the market is here, a telecoms expert, Kehinde Aluko argued about the awareness strategy of both regulator and players’, especially getting people in the hinterland acquinted about the benefit broadband holds for them as individuals.
While some states including Lagos, Ondo, Bayelsa are commendable for reducing RoW levies, other states still see telecoms firms as ‘cash cow’ that must be milked.
Besides, the country is still provide shelter for vandals. Vandalism has become another challenge operators will continue to cope with as no law currently looks into that.
Pervasive broadband provision would also increase online activities. Today, there have been increase in cyber attacks, yet the National Assembly has refused to pass into law the cybercrime bill.
While defending NCC’s budget on Monday, Juwah explained that the NCC would propose a bill to the National Assembly, with a view to tackling the challenges in the sectors.
The NCC boss said, “We have, in conjunction with the National Assembly, plan a bill on telecoms-critical infrastructure, which we hope will be presented to the two chambers and be given accelerated hearing.
“We hope that most likely, it will be in the interest of telecoms firms and this committee in particular if this bill is passed during this parliamentary session. This bill will deal with vandalism of telecommunication infrastructure and fibre cuts due to road networks, shutting down of services by state governments, planning permit restrictions and right of way restrictions.
“We hope that if this bill is passed as a federal legislation, all these problems will be reduced and there will be a remarkable improvement in the quality of service.”
According to NCC boss, the need to bridge this capacity distribution gap has, among others, informed the decision by the commission to come up with the open access model for broadband deployment.
Consequently, “We believe that the InfraCos and the ongoing plans to auction the 2.6 GHz spectrum this year and other spectrum bands being arranged for auctions, would help in unleashing the real broadband revolution in the country. The InfraCos will operate to make their infrastructure affordable to businesses and end users,” Juwah said.
The InfraCo regime is being supported by the government with the hope that the licensees would accelerate the country’s drive towards pervasive broadband access.
“As part of Nigeria’s drive for more investors into the blossoming Information and Communication Technology sector and based on the open access model, which has been adopted for the licensing round, beneficiaries of the licences shall get adequate incentives to operate in Nigeria,” Minister of Communication Technology, Dr. Omobola Johnson, has said.
Consequently, the minister said InfraCos shall be given tax holidays of between five and seven years to cushion the burden of their capital investments, stressing that this will also encourage them to invest areas, where many consider being less commercially-rewarding.
She also said that the licensees will also be granted pioneer status as part of the incentives to boost their interest in investing in such areas or zones that may look unattractive. This is in addition to other incentives that could be up to 30 per cent mark up on their capital expenditure (CAPEX) and employee tax holidays as well.
Meanwhile, the MainOne Consortium and IHS have explained what their roadmaps would look like as Infraco licensees.
Speaking on MainOne’s blueprint as InfraCo licensee, the company’s spokesperson, Kazeem Oladepo, said, “Fundamentally, our roadmap is more of building pervasive infrastructure on an open access level to make broadband infrastructure more available and accessible to Nigerians.”
He said MainOne Consortium, “is also coming up with a strategy to provide the infrastructure to our customers at more competitive rate, than what used to obtain during the regime, when some companies used to engage in predatory pricing, which is not helping the industry.”
Though this, Oladepo said his company would be able to support sustainable broadband business case for the users of the infrastructure. “So, basically, our roadmap is to achieve pervasive build and rollout; drive affordability, accessibility and availability,” he said.
The Company Secretary of IHS, Jimoh Umoru, also succinctly captured his company’s roadmap as an InfraCo licensee.
“We would focus on putting smiles on the faces of businesses and end users of broadband services. We would provide affordable and resilient broadband infrastructures to our customers to deliver on our mandate: bridge market gap in broadband provisioning.”
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