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InfraCos’ viability, incentive beyond subsidy


[FILE PHOTO] NCC Boss, Umar Garba Danbatta

Early this week Nigerian Communications Commission, NCC, said it has concluded process for the disbursement of subsidies to the six licensed Infrastructure Companies (InfraCos).

Prof. Umar Danbatta, executive vice chairman of NCC, disclosed this when delegates from the United States Trade and Development Agency (USTDA) paid him a courtesy visit at the commission’s headquarters.

Danbatta said that the planned disbursement was part of the commission’s strategies to boost broadband penetration and make it pervasive nationwide.He said that the subsidy would augment the InfraCos’ Capital Expenditure (CAPEX). And that the InfraCo scheme had a public-private partnership (PPP) arrangement, with a subsidy component that was being worked out for the licensees to fast-track deployment in their respective zones.

Even as subsidy is part of the challenges InfraCos are faced but their survival goes beyond subsidy as other bottleneck that have over the years prevented the first set of licensee from deploying infrastructure still remain.It would be recalled that IHS that returned its lnfraCo license cited frustration it faced in securing right of way approval to deploy infrastructure and not subsidy.

MainOne another InfraCo licesee for Lagos are having running battle with Ibile holdings a holding company Lagos state government transferred the authority to grant ‘Right of Way’ that made NCC to intervene.Acknowledging this Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), said that subsidy is not necessarily the major challenge holding InfraCos from deploying.

“The Right of Way (RoW) issue in certain states is a major challenge to the viability and commercial incentive to rolling out in un/underserved areas. With NCC now agreeing to back ended disbursement of the subsidy after technical auditing, it should encourage those InfraCo licensees that have gained agreements with certain states at N145 per linear meter for RoW to go ahead and rollout so that they can gain access to the subsidy,” he said.

He explained that what subsidy does for the InfraCos is that It discounts the input costs associated with fiber deployment and this provides an InfraCo with the ability to sell its services to the communities served.On the way forward, he urged government to provide an enabling environment that provides the InfraCos opportunity to gain the courage to address the complex challenge of achieving a moderate rate of Return on Capital expended.

“There should be continued collaboration between NCC, state governors, and local community representatives to achieve a win-win outcome on driving deeper broadband penetration.Nigeria CommunicationsWeek investigations revealed that leasing of intra city fibre optic costs N200, 000 to transmit 20mega byte of bandwidth from Victoria Island to Ikeja in Lagos Nigeria.

It was also gathered that some existing national and metro fibre links are not being used by operators as a result of high cost which is why stakeholders are calling for articulated business friendly policy in the deployment and provision of telecommunications transmission infrastructure in the country.


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InfraCosNCCUmar Danbatta
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