Nigeria’s broadband penetration rate moves at snail’s pace

Nearly three years after the launch of Nigeria’s National Broadband Plan, which seeks to cover 90 percent of the population by 2025, the broadband penetration rate in the country remains on a slow lane.

The plan, which was launched in January 2020, was designed to deliver data download speeds across Nigeria, a minimum of 25 megabits per second (Mbps) in urban areas, and 10Mbps in rural areas, with effective coverage available to at least 90 percent of the population by 2025 at a price not more than N390 per 1 gigabyte of data (i.e. 2 percent of median income or 1 percent of minimum wage).

Nigeria’s broadband penetration stood at 45.55 percent as of October 2022. The country has set a 70 percent penetration target by 2025. This means Nigeria has additional 24.49 percent in terms of broadband coverage to achieve.

In 2020, when the broadband plan was launched, penetration stood at 38.49 percent. At the current 45.55 percent penetration, it implies a growth of only about 7 percent in the two years the plan has been in force. If the pace of growth does not increase in the next three years, the country is most likely to miss the 70 percent target. It has eight proposed initiatives that need to be achieved in the next three years.

BusinessDay’s analysis of the progress of the initiatives found there is a need to speed things up, otherwise, the plan would likely not be achieved.

The eight initiatives include the issuance of executive order to declare telecom infrastructure as Critical National Infrastructure (CNI) and full implementation of the plan; to ensure open access, prevent overlap and facilitate right of way (RoW) issuance at statutory rates; leverage existing infrastructure of the Nigeria Communication Satellite (NIGCOMSAT) to reach unserved and rural areas; implement and enforce national uniform RoW charges for fibre builds at a rate of N145 per metre square and ensure open access and accounting separation; and work with states to implement one-stop shop to accelerate approvals and harmonise fees.

Others include ensuring efficient use of spectrum, use it or lose it policy, open and transparent spectrum planning including TV White Space deployment for broadband; incentivise low-cost smartphone devices and promoting local assembly manufacturing of telecom network and end device components; and coordinating government spending, schemes, and programmes to ensure access in public institutions, example, schools, hospitals, as well as ministries, departments and agencies.

Issuance of executive order for CNI

Status: Not implemented

Critical National Assets and Infrastructure refer to assets, services, and systems that support the economic, political, and social life of a nation. Operators have always argued that classifying telecom infrastructure as CNI would reduce cases of dropped calls, bad internet, and terrible network delivery.

Towards the end of 2019, the federal government said it was planning to issue an executive order to declare telecommunications infrastructure as critical national infrastructure. In June 2020, Ali Isa Pantami, minister of communications and digital economy, said President Muhammadu Buhari had approved and also directed that necessary physical protective measures be put in place to safeguard telecommunications infrastructure deployed across the country.

Nonetheless, the President did not issue any executive order declaring the telecom infrastructure as critical national infrastructure. Operators have also said it would take more than an executive order to provide adequate protection for telecom infrastructure. To do so would require legislation.

The industry has been pushing to make telecoms infrastructure national assets since 2004, when a bill to make electricity and other critical infrastructure national assets was passed. The bill has since been renamed the Critical National Infrastructure bill and introduced in the National Assembly in February 2021. It has since not made any significant progress.

Ensure open access, prevent overlap

Status: Work in progress

By ensuring open access and preventing overlap, the Nigerian Communications Commission (NCC) is trying to reduce the situation where a lot of the operators build fibre infrastructure in the same location, thereby causing glut in that location while other regions are neglected. With open access, an operator can lease their fibre infrastructure to other operators who use it in return for a fee.

The practice is not yet widespread, according to operators who spoke to BusinessDay. According to them, it is still early days in the telecom industry in Nigeria and there are still conditions that need to be in place to incentivise operators with fibre infrastructure to share with their competitors.

But some operators are tapping into fibre swap. Fibre swap means any exchange or lease of fibre optic strands or conduit in exchange for the ownership or use of other fibre optic strands or conduit. For example, an operator that has built fibre infrastructure in Kaduna but wants to expand to Imo State can approach another operator with fibre infrastructure in Imo and wants to expand to Kaduna. They agree on a deal that allows the parties to swap infrastructures in the various states.

Leveraging NIGCOMSAT infrastructure to reach rural communities

Status: Slow progress

NIGCOMSAT appears to be living up to expectations in other areas, except for delivering internet to rural communities. The NigComSat-1R, which is the only active satellite the country has, provides transponder leasing services on Ku-band, C-band, and Ka-band platforms.

Broadcasters rely on NigComSat-1R to transmit a variety of media content to their customers’ homes, including normal TV, HDTV, and Ultra HD channels, thanks to more than 50 DTH platforms.

But the prohibitive costs of running a satellite make it almost impracticable for rural broadband deployment. It is also important to note that the current NigComSat-1R would be decommissioned as its lifespan ends in 2026. The Nigerian government plans to deploy two new satellites, NigComSat-2 and Nig-ComSat-3 in 2023 and 2025 to replace the expired satellite. The government also plans to leverage the two satellites when they are launched in deploying broadband to rural communities.

Read also: The modern Nigerian workforce and the promise of a robust broadband penetration

Enforce national uniform RoW charges at N145

Status: Slow progress

In 2021, the government came very close to galvanising the states to embrace the N145 uniform fee for RoW, with as many as six governors pledging to either reduce the fees to N145 or remove fees altogether.

Only three states have actually implemented their pledge as of December 2022. Mohammed Bello, minister of the Federal Capital Territory, announced in November that telecommunication operators that want to deploy broadband infrastructure in green areas will only pay N14.50 per linear square as RoW charges. The discounted charges would commence on December 1, 2022 and run for the next two years.

The remaining 33 states have taken different approaches.

‘Use it or lose it’ spectrum policy

Status: Work in progress

The policy is to ensure effective usage of the spectrum assigned to each operator. The NCC has had a history of investors winning spectrum auctions and not deploying any service with the licence; an example is Alheri Engineering, which won a 3G licence in 2007 but did not use it for two years. It later sold the licence to Bharti Etisalat for double the price it acquired the licence.

The 5G licence issued by the commission to MTN Nigeria and Mafab Communication is still a work in progress. Only MTN Nigeria has deployed while Mafab requested a deadline extension. The NCC granted a five months extension, which elapses in January 2023. Airtel also recently won a 5G licence, which is yet to be issued until the telco has paid the entire $273.6 million reserve price fee.

Achieving these initiatives will determine the success of the targets the NCC set in the national broadband plan.