• Wednesday, November 29, 2023
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FG threatens $2.25bn investment in underwater cables


The profitability of undersea cable operators in Nigeria is being threatened by the delay in the approval of a national broadband policy. The policy is expected to accelerate the pace of wholesale fibre access through infrastructure sharing and deepen broadband penetration.

Industry analysts have said that government’s delay in approving a broadband policy is counter-productive, as cable operators have invested $2.25 billion in deploying these infrastructure. However, most of the operators are not getting the needed return-on-investments due to poor utilisation of the cable infrastructure.

Cable operators have however identified prohibitive cost of wholesale fibre access as the fundamental drawback limiting speedy up-take of available bandwidth capacity.

The Nigerian Communications Commission (NCC) had developed a broadband plan based on ‘Open Access.’ But the policy is still awaiting President Goodluck Jonathan’s approval.

“The government should intervene to accelerate the pace of wholesale fibre access. We need to agree to a commercially viable framework for infrastructure sharing with incentives for

the incumbents to share their proprietary networks,” Funke Opeke, CEO, MainOne Cable, said in an interview.

Speaking in the same vein, Christian Rouffaert, UK and Ireland Network Strategy lead, Accenture, said “Nigeria needs to clearly articulate its broadband strategy with a view to defining expected roles of government and the private sector in the emerging broadband ecosystem.

“Most of the European nations have an active broadband plan focused on driving high-speed connectivity. I don’t see any reason why Nigeria does not have one. This is because there is a correlation between broadband and economic growth.”

There are four active cables carrying an installed capacity of over 19.2 terabytes, with a combined capacity of about 340 gigabyte, which is a massive increase in capacity available to drive bandwidth dependent services.

MainOne, the 7, 000-kilometre cable, is valued at $240 million. The 10, 000-kilometre Glo-1 Cable costs $800, 000 to build. Industry analysts place the worth of NITEL’s South Atlantic 3 (SAT 3) at about $600 million, while MTN’s West African Cable System (WACS) costs about $600 million.

Industry analysts told BusinessDay that 95 percent of the capacity on these infrastructure were redundant due to the lack of distribution and last-mile connections needed to move available bandwidth capacity across the length and breadth of the country.

There is more than 30,000 kilometres of domestic fibre optic cables to connect those international cables to more than 50 percent of the Nigerian population, BusinessDay learnt. But from all indications, access to fibre infrastructure to move bandwidth capacity across the

length and breadth of the country is so far discriminatory and inordinately expensive. This, according to analysts, has grave implications, as Nigeria’s 70 percent internet penetration target seems very unlikely.

Beyond that, most Nigerian schools, hospitals, government agencies, and small and medium businesses have been inhibited from accessing broadband services.

Kamar Abbas, managing director, Ericsson Nigeria, told BusinessDay that “government should try to identify and maintain a public database of where the fibre is today and where it is planned to be in the short to medium term, so that investors and indeed consumers can understand where there is supply and where there is deficit. That is the first thing we will encourage government to think about.”

There is an extremely convoluted process of securing right-of-way to embed fibre in the ground, he said, adding that, going forward, this discourages investment in fibre deployment.