Nigeria would need three times more fiber infrastructure than it currently has to reach the Nation Broadband Plan (NBP) target set by 2025.
To meet the target, the country needs roughly between 120,000 to 167,000 km of fiber infrastructure, in addition to the 55,000 km set at the cost of $3.4 billion. Urgent deployment of fibre infrastructure is critical to the success of upcoming national events like the 2023 elections and the successful commercialisation of 5G technology.
About 23 percent of Nigerians use broadband services and 36 percent of the population has internet access, according to reports.
The average cost to fix broadbands has been known to round up to $80 per month making internet access unaffordable to most households With the high cost of the Internet and mobile connectivity, SMEs face poor quality in internet service, impacting their efficiency and productivity.
The amount for fiber development cost is approximately $870 million and an estimated $2.5 billion for 10 years cost of Right of Way(ROW) fees, which would be payable by operators deploying the fiber if current ROW fees remain in place.
If the ROW charges by all states are reduced to N145 per meter, then the cost of dark fiber deployment including ROW fees would decline dramatically from $3.4 billion to $1 billion as the DCF of 10 ROW fees would decrease from $2.5 billion to approx. $150 million.
Speaking with BusinessDay, Karl Toriola CEO MTN Nigeria, gave his comment on Stae governors who have agreed to the Right of Way pricing and are open for fiber infrastructure.
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“We have to give a lot of credit to the honorable minister for being extremely progressive in accelerating the pace of advancement in the telecoms industry,” Toriola said “Right of way, for example, is one of them. Some states have leaned into the right away pricing as requested by the minister, and we’re investing aggressively in those states.”
“For other states, it’s within the jurisdiction and right of the state governors to decide how they want to manage that policy. I think over time, as we see the ICT progress of the states that have opened up to fiber infrastructure and the right of way, a lot more states will come into the fold,” he added.
“We, without a doubt, need fiber capacity to provide the backhaul for 5G, and if you’re ready for 4G, it helps the quality of service.”
The lack of an open-access wholesale network, combined with inefficient wholesale access regulation, different Federal and State taxes, and expensive rights-of-way costs, continues to hinder investment in the industry.
Nigeria, unlike its West African neighbors Ghana and Senegal, lacks a widespread, open-access national backbone network through which high-speed Internet connectivity can be expanded across the country at a reasonable cost. As a result, most Nigerian telecommunications companies continue to build their infrastructure.
This has resulted in excessive expenditures, with high-traffic intercity routes frequently having three or more fiber-optic cables while others have none. Excessive rights of way (ROW) fees, as well as federal and state levies from a variety of government agencies and departments, have artificially raised the price of this much-needed deployment.
Only roughly 7 states out of 36 have consented to use the N145 per meter ROW tariff, with governments such as Benue, Ogun, and Lagos charging N2,500, N4,000, and N750 per linear meter as of 2021.
Even then, several of these states have converted the ROW costs that were previously abolished into new administrative fees that telecom operators must pay.
According to the World Bank, about $900 million in ROW fees could be paid yearly to deploy the fiber needed to meet the NBP penetration rate targets while removing the impediment that these high and unclear payments pose to the government’s ambitions.
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