Telcos prepare InfraCo bids as NCC begins selection process

Efforts to deploy widely accessible and affordable broadband internet services across the length and breadth of Nigeria have begun in earnest as major telecommunications firms have started preparing bids for the InfraCo (Infrastructure Company) licences offered by the industry regulator, the Nigerian Communications Commission (NCC), according to industry insiders.

The InfraCos are expected to deploy critical Information and Communications Technology (ICT) infrastructure in the six geopolitical zones of the country.

The NCC has issued an invitation to capable and interested companies to submit bids for the first phase of the InfraCos programme which will cover Lagos State and the North Central zone of the country, in consonance with the National Broadband Plan (2013-2018). The broadband plan has set a target of a five-fold increase in broadband penetration by 2017.

BusinessDay gathered that underwater cable operator, MainOne, South Africa’s MTN, national carrier Globacom, ipNX Nigeria, Visafone Communications, India’s Airtel and UAE’s Etisalat, amongst others are some of companies expected to submit bids for the licence.

The boards of these companies, industry insiders say, are already strategising on the best course of action in view of the inherent complexities in the licensing requirement, especially in the area of ownership structure.

In defining the ownership structure of the InfraCos, the commission said prospective companies would need to enter into partnerships and strategic alliances with industry players and telecoms operators if their bids were to scale through.

Prospective firms will also need to have a separation of entities. This means that they would run the InfraCo and their core business as separate firms in order to keep the price and cost structure open and transparent.

In the notice of invitation to interested bidders, Eugene Juwah, executive vice chairman, NCC, said the Infracos would be expected to deploy metropolitan optic fibre infrastructure on an open-access, non-discriminatory, price-regulated basis.

Juwah explained that the Open Access Model adopted by the commission “has been examined and considered as a strategic means for the deployment of optic-fibre backbone transmission infrastructure network in Nigeria that will bridge the current broadband gap, facilitate the development of local content and deliver cost-effective services to households and businesses”.

He said InfraCos 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, amongst others.

Speaking with BusinessDay recently, Funke Opeke, chief executive officer, MainOne, said they would look at getting licences for InfraCos, “perhaps more than one, depending on the scope of the eventual framework that the NCC decides to implement”.

“We believe the challenge that the NCC is trying to address is: how do we bring broadband to all parts of Nigeria without every operator having to build redundant infrastructure that is unnecessary and drives cost to Nigerians?” she said.

Some large operators are taking advantage of the situation because they have the most fibre infrastructure on ground. These operators, according to the MainOne CEO, had the opportunity to self-regulate this segment of the market by working through some of the existing rules on open access and infrastructure sharing “that could achieve the broadband policy objectives, but they would rather protect the status quo”.

Lanre Ajayi, president, Association of Telecommunications Companies of Nigeria (ATCON), said the intention behind the InfraCo model was laudable. He, however, expressed reservations about the implementation process.

“I have concerns about having just one InfraCo in a geopolitical zone. It just creates a lot of uncertainty for existing and potential investors in the market,” he said at the eWorld forum held in Lagos, weekend.

Such moves by the government, according to Ajayi, could take the telecoms industry back to the ‘dark days’ of NITEL (Nigerian Telecommunications Limited), the incumbent national monopoly, where inefficiency, lack of productivity and corruption held sway.

Ben Uzor Jr