Right of Way fee for internet fibre still above N140 in 29 Nigerian states

Operators in the telecommunication industry will still have to pay above N140 to deploy fibre cables for the internet in 29 out of 36 states in Nigeria, despite an agreement by the National Executive Council ( NEC) and a diplomatic push by the Minister of Communications and Digital Economy last year.

In 2013 and further reviewed in early 2020, the National Executive Council (NEC), reached an agreement with the 36 state governors including the Federal Capital Territory to have a harmonized Right of Way (ROW) charge of N145 per linear meter for fibre broadband infrastructure investment across the country in line with the National Broadband Plan.

In 2020 when 14 states arbitrarily raised the ROW charges, operators in the industry said the increases would deter them from releasing capital to deploy fibre across the country, Ali Isa Pantami embarked on a diplomatic mission. The goal was to convince the governors to reduce the charges and possibly align with the N140 recommended by NEC. After a meeting with the chairman of the Nigerian Governors Forum, Kayode Fayemi, the Governor of Ekiti State, and a few Governors, the Minister announced that he has reached an agreement with all the states to drop the charges.

It wasn’t until May, five months after Pantami’s announcement, that Ekiti State took the lead and announced it was reducing the charges to N140 from nearly N3000 it was charging before. Soon after, it made the decision public, six more states followed.

So far, the few states that have complied with the N140 national fee include Ekiti, Imo, Plateau and Katsina. Kaduna and Anambra waived the fees while Kwara dropped the fees to N1. However, 29 states have stuck to their old charges. A few have managed to give concessions. For example, in 2020, Mainone said Ogun state gave them a charge waiver to deploy fibre cables across the state.

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The ROW for Rivers State is N1,500 per linear meter of excavation and N5000 per meter of thrust-boring.

The Right of Way for Lagos State is between N850 – N1,500 per linear meter depending on the category/ class of applicant. Members of the Association of Licensed Telecoms Operators of Nigeria (ALTON) are charged N850 while all other fibre operators are charged N1500 per linear meter.

Adejoke Owoso, CEO of Fibre One, an Internet provider with most of its assets in Lagos, told Businessday that the state is planning to review the charges.

“We currently do not have the rate card for Right of Way at the moment as the former rates have been advised to be disregarded especially that of Lagos which is due to the Lagos state smart city project which is still ongoing,” Owoso said. The Lagos State government is implementing a smart city initiative with the deployment of the Unified fibre duct infrastructure and connectivity project across the state.

The initiative is in line with the state’s “dig once” policy and operators would lease these ducts at project completion at rates defined by the Special Purpose Vehicle in charge of the project.

The Federal Capital Development Agency (FCDA) has provided fibre optic ducts across the Federal Capital Territory which telecom operators lease at an annual rate of N810 per meter. This is currently being reviewed according to some operators.

The high ROW charges are largely responsible for the little progress the country has seen in the deployment of infrastructure for high speed internet across the country. Data from the Nigerian Communications Commission (NCC) showed that investment in fibre broadband has remained below 1 percent whereas mobile broadband grew 99 percent.

“The high rates of the ROW adversely impact our business,” said Uche Nnakenyi, Divisional CEO, ipnx. “Fibre-to-the-home infrastructure is highly capital intensive hence with the high rates of the ROW, the total cost of ownership of our infrastructure is increased, impeding the rate of expansion of the footprint of our infrastructure within and across cities and states. Additionally, this increases the cost of service delivery.”

To be sure, right of way (ROW) refers to a legal right given to other persons to enable them use land for transportation purposes, which could range from highway, public footpath, rail transport, canal, electrical transmission lines, as well as oil and gas pipelines.

In the context of the telecom industry, a ROW refers to the land on which operators can lay their infrastructure, including connectivity cables. In Nigeria and many other countries, local authorities usually apply a charge or fee to Right of Way.

In different Nigerian states, these charges can vary and are often widely irregular. Uche Nnakenyi of ipnx told Businessday the decisions are primarily rooted in the bid to increase internally generated revenue ( IGR). Rates across states typically range from N300 to N6000 per linear meter of fibre cable. Only a few states charge the Nec-approved rate of N140.