Multiple Levies By States Frustrate FG’s National Broadband Plan

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The bid by the federal government to attain 30 per cent broadband penetration goal by 2018 and ensure telephony access to all nooks and crannies of the 774 local government areas nationwide is facing serious challenge, with state governments’ penchant for multiple levies and charges attributed for the poor capital investments in infrastructure build outs by telecommunications operators.

Investigation by Weekend LEADERSHIP showed that the Nigerian telecom sector lacks the requisite infrastructure to develop into a digital economy, sustain and increase growth rates and increase broadband penetration levels, as well as enabling environment to allow for more infrastructure rollout.

Broadband penetration level is now up to 14 per cent from 10 per cent in 2014. Submarine fibre cable systems have increased bandwidth capacities at the shores from 4.78 Tbps in 2011 to over 11Tbps at the moment.

Optic fibre cable infrastructure deployments now cover over 60,000km. However, there are gaps in the ICT ecosystem that is inhibiting the kind of growth, sectoral connections and contribution to the sector is capable of.

The broadband fibre infrastructure meant to address transmission of bandwidth capacities from cable landing stations in Lagos to the hinterlands and within metropolitan areas and cities nationwide remains fragmented, ineffective, inefficient, costly and unable to contribute meaningfully in the growth of the ICT sector and the economy in general.

Mr. Ibrahim Dikko, managing director, Backbone Connectivity Limited said, “The major challenges mitigating against pervasive broadband infrastructure range from exorbitant Rights of Way (RoW) charges normally required to be paid upfront, multiple taxation, network asset vandalism and misunderstanding of Federal Government’s strategic broadband policy direction by the state governments.

He said, “We believe that the time has come for bold, innovative and refocused ideas and solutions that will accelerate broadband deployment, unlock ICT supply and value chain thereby creating sustainable growth for telecom companies and the economy at large. Even though federal government has standardised ROW rates, the state governments are yet to align with those rates despite being the biggest beneficiary of increased broadband infrastructure.

“The current ROW policy, effectively a tax on investment, disincentives investment due to high cost, upfront payment and in some cases charged annually. It is pertinent to point out that both developing and developed countries have embraced fibre broadband infrastructure development as a critical pivot for socioeconomic growth.

“Therefore, the National Economic Council should be encouraged to recognise the harmonisation of ROW charges and increasing broadband penetration as a critical national imperative and a strategic cornerstone of the change and diversification agenda of the Federal and state governments”.

A World Bank study between 2000 and 2006 found that low-income and middle-income countries experienced “about a 1.38 percentage point increase in GDP for each 10 percent increase in (broadband) penetration.

“With Nigeria’s projected 2017 GDP estimate of $657 billion, a 1.38 per cent GDP growth is equivalent to $8.6 billion (N309.6 billion) additional input to the Nigerian economy annually. Dikko said “this is greater than the current combined contribution of the Arts, Entertainment and Recreation sector to Nigeria’s GDP. This we believe provides a very strong basis for reengagement with the National Economic Council”, it noted.

Mr. Biodun Omoniyi, managing director, VDT Communications, the largest indigenous broadband service provider said there is market shift in favour of data compared to voice. Out of the total subscriber base of 150,660,631, 92,181,178 representing 61 per cent use mobile internet and this is expected to continue on the upward swing.

“The next five years in the Nigerian telecom industry will witness tremendous growth, especially in the data segment of the market. This is bound to give rise to several rewarding opportunities in the industry, however with accompanying challenges”, he stated.

He further said if the challenges of Right of Ways and multiple taxations are addressed, “more defunct Internet Service providers (ISPs) will be revived to take advantage of the growing opportunity, increase in the number of new entrants into the broadband communications sub-sector is not ruled out and investment in broadband communication would significantly increase.

He also said there will be increase in wireless network infrastructure and investment; Cloud  and IOT services will be consolidated; E-Commerce including e-payment will be on the upward swing with many innovative applications and offering and M2M applications especially in the health and automobile sectors will be on the rise.

Mr. Lanre Kolade, managing director, Vodacom Nigeria noted that Demand for mobile handset data services is set to grow fast, offsetting a decline in voice and messaging revenue. “Telecoms operators will remain the main investors in fibre networks to extend high-speed fixed broadband services to enterprise customers and wealthy urban and suburban neighbourhoods”, he explained.

Meanwhile, Professor Umar Danbatta, executive vice chairman of NCC has assured telecommunications subscribers and stakeholders that the Commission is intensifying efforts to address the major challenges facing the industry including slow investments, vandalisation of telecom infrastructure, multiple taxation and Right of Way issues as well as security challenges at mobile base stations, among others.

“To resolve multiple taxation and Right of Way challenges, we have adopted a pragmatic approach, and one of the platforms used by NCC is the engagement of the Governors Forum through outreaches. Ogun State Governor, His Excellency, Ibikunle Amosun recently ordered for the unsealing of 47 base stations hitherto under lock and key before my visit to the state” he said.

Prof. Danbatta said to curtail the problem of vandalism, NCC is tirelessly working to ensure the passage of the critical infrastructure bill at the National Assembly so that telecoms infrastructure will be declared as national assets.



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