Seven infrastructure companies (InfraCos) licensed by the Nigerian Communications Commission (NCC) to deploy metropolitan fibre and associated equipment have yet to operationalise the licences since they were issued.
The NCC had between 2014 and 2018 issued licences to seven companies as part of efforts to scale Nigeria’s telecom infrastructure. The InfraCos were supposed to provide Layer 1 (dark fibre) services on a commercial basis, with a focus on the deployment of metropolitan fibre and transmission services, available at access points – Fibre-to-the-Node or Neighbourhood – to consumers.
For maximum impact, the NCC divided the country into regions and shared among the companies. Each licence cost the operators N2.5 million for a 20-year period and is subject to renewals.
The NCC also pledged to provide counterpart funding as an incentive to the operators to accelerate pace of deployment.
The first two InfraCo licences were issued in 2014 to MainOne and IHS. MainOne was issued the Lagos region licence while IHS secured the North Central licence.
In 2018, Garba Umar Danbatta, executive vice chairman of NCC, announced that the commission had budgeted N3 billion that will be paid in piecemeal to the licensed InfraCos to aid the deployment of fibre cables and ultimately expand broadband access in Nigeria. That money was never released, according to operators.
The same year, IHS returned the licence to the NCC, citing difficulties in securing right-of-way (RoW) approval to deploy equipment in the North Central zone.
The NCC reissued the licence to Broadbased Communications Limited in 2018. The five remaining licences went to Zinox Technology Limited for the South-East, Brinks Integrated Solutions Limited for the North-East, O’dua Infraco Resources Limited for the South-West, Fleek Networks Limited for the North-West, and Raeana Consortium Limited for the South-South.
As of December 2022, none of the InfraCos have been able to deliver the promise embedded with the licence, most of which was to cover the access gaps, particularly in underserved and unserved areas of the country, and provide a wholesale layer to transmission services on a non-discriminatory open access price regulated basis.
As outlined by the regulator’s ‘Open Access Next Generation Fibre Optics Broadband Network’ paper, which was published in 2013, InfraCos will be responsible for providing a national broadband network to service providers. The NCC says that the open access model for fibre-optic network deployment is best suited to bridge the digital divide, facilitate the development of local content, and deliver fast and reliable broadband services to households and businesses
The operators’ inability to operationalise the licence is a major setback for the country’s push for a digital economy as it means that there are still many parts of the country that lack connectivity.
As of December 2021, 114 communities in Nigeria have either weak or no internet connectivity, according to a report by the Centre for Information Technology and Development. The report also showed that 100 million Nigerians do not have access to internet services. Broadband penetration in Nigeria stood at 45.55 percent, hitting 86.9 million in October 2022, leaving about 54 percent of the country without connectivity.
A similar report by Alliance for Affordable Internet (A4AI) found that 81 percent of Nigerians lack meaningful connectivity. The World Bank defines meaningful connectivity as having access and the ability to apply the power of digital to today’s most pressing challenges with innovations like remote learning, telehealth, e-government services, and more. The A4AI claims that only 6.6 percent of the rural population and 16.4 percent of the urban dwellers have good internet service.
At 45.55 percent penetration, Nigeria is on course to miss the 50 percent penetration target it set for 2022. Without deploying telecom infrastructure, the country is likely to also miss its 70 percent penetration target by 2025.
The country continues to underutilise its telecom assets. As at April 2022, Nigeria had seven international subsea cables, with over 140 terrabits of capacity. Operators say less than 5 percent of this capacity has been utilised.
Rotimi Akapa, partner and head of Telecommunications, Media and Technology Practice Group at Advocaat Law Practice, said the main problem is the refusal of the state government to agree on reasonable terms for the issuance of RoW permits. Despite the federal government proposing a uniform RoW rate of N145, the states have different and sometimes extortionist rates.
“An InfraCo that was issued a licence for South-South, for example, could be asked to pay rates that could range between N1000 per kilometre to N7,000 per kilometre across the various states in the South-South,” Akapa said. “It is however good to note that a couple of states have either zero-rated right-of-way fees or charge very minimal amounts. I think about 3 or so.”
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In 2021, over six states made public pledges to either reduce the RoW charges to N145 or remove the charges entirely. Out of these, only three have matched words with action so far. However, operators say that even among the three states, there are still significant charges operators are made to shoulder. These include the cost of infrastructure build, which remains very expensive, and the multiple taxes the states and their agencies still have to collect.
Gbolahun Awonuga, head of operations at Association of Licensed Telecommunications Operators of Nigeria, told BusinessDay that the National Broadband Plan 2020-2025 may have overridden the InfraCos. The broadband plan focuses on every part of the country and does not zone any region to one operator.
The implication is that states are free to align or work with any infrastructure provider they believe will deliver what they need. This may explain why states like Lagos took a different turn with the dig-once policy.
“It is not just Lagos; other states have also adopted the dig-once policy. This is the problem the InfraCos are having,” Awonuga said.
Lagos State, also one of the states that refused to align with the N145 RoW fee, suspended fibre infrastructure deployment until the completion of the Unified Duct Infrastructure Project. This leaves an InfraCo like MainOne in the dark as to the next steps to take with its licence.
Abayomi Adebanjo, general counsel at MainOne, who confirmed that the company has yet to return its licence, said it’s exploring different options including partnership with the state. Funke Opeke, its chief executive officer, held the vice chairmanship position of Lagos State KITE for Yaba redevelopment.
