Addressing Funding Gaps In Nigeria's Broadband Deployment

Omobola Johnson, the Minister of Communications and Technology for the Federal Republic of Nigeria. Nigeria has the largest population of any other African state on the continent., a photo by Pan-African News Wire File Photos on Flickr.

Addressing funding gaps in Nigeria’s broadband deployment

WEDNESDAY, 13 MARCH 2013 00:00 ADEYEMI ADEPETUN COMPULIFE - COMPULIFE

Globally, countries are putting in place various strategies to deepen broadband penetration, for economic growth. For Nigeria to tap into the immense benefits of broadband, stakeholders believe that the challenge of funding must be adequately tackled.

Against this backgrand, key sector players gathered last week, in Lagos, to address the issue headlong and proffer solutions.

ADEYEMI ADEPETUN was there. Excerpts

THE World Bank research indicates that the contribution of broadband to the GDP is 1.38 percentage points for every 10 per cent increase in penetration, for low- and middle-income countries.

Indeed, investments in broadband have a vital role to play, both in moving the global economy back onto a higher growth trajectory, and in generating sustainable social and economic growth.

Like water, roads, rail and electricity before it, broadband is of fundamental importance to the social and economic development of all nations. Arguably, investments need not be solely focused only on infrastructure development - they must also provide for advanced online services, locally relevant content and services, and support for media and information literacy development to address inequity and deliver broadband inclusion for all.

Today, it is no more news that networked Information and Communication Technologies (ICTs) play an ever-increasing role in all societies, with 2.4 billion people using the Internet, more than a billion mobile broadband subscriptions worldwide, and telecommunications service revenues now exceeding $2 trillion dollars yearly, Nigeria cannot afford to walk in other nations’ shadows. It must brace up to overcome its challenges of providing its citizens ubiquitous broadband.

Though, the Federal Government last year inaugurated a broadband committee, headed by Former Executive Vice Chairman of the Nigerian Communications Commission (NCC), Dr. Ernest Ndukwe and assisted by the founder of Visafone Communications Limited, Mr. Jim Ovia, government must play a key role – for example in helping to put in place pro-competitive and pro- investment policies for communications markets, lowering barriers to entry, as well as direct investment, where appropriate – the business sector remains a fundamental part of the equation.

Indeed, speakers at the Broadband ExPro Forum organised by Telecoms Answers Associates in conjunction with the , the theme: “Access to funding is a critical requirement of extending Broadband Internet Access to Nigerians”, noted that limited broadband infrastructure and high cost of service has created issues of affordability.

Speaking on: “Mapping the broadband investment in Nigeria”, Prof. Adekunle Suraj of the Department of Communications Technology and Broadcasting, School of Communications, Lagos State University, noted that there were vast broadband infrastructural investment opportunities in Nigeria.

Suraj listed two broadband infrastructure investment options in Nigeria, which were the access network and the backhaul and core network facilities.

According to him, access network comprised the connection between the end user and the nearest network node, while the other provide links between network nodes to allow connectivity over large distances.

Suraj noted that partnership and alliances with Mobile Network Operators (MNO) because of their firm grip on the consumer mass market could deepen penetration, stressing that this could involve ISPs, large corporations, and other wholesale users incorporating into broader long term partnership that goes beyond sales and purchase agreements.

He said, based on universal service targets for broadband access, investment in high-speed backbone networks to rural communities (schools, hospitals and other public institutions as anchor points for high speed connection in the community) may be more efficient than projects that pay for lost-mile connection to homes.

In the presentation of Fidelity Bank Plc, the firm noted that with improved infrastructure, the industry could deliver converged services (that is, voice, data, video streaming, IPTV and online gaming) with the aid of next generation equipment.

To this end, Fidelity Bank noted that the country required in addition about 16,100 Base Transceiver Stations (BTS) and 15,000km optic fibre to be able to improve broadband services.

To fund this gap, Fidelity Bank revealed that with an average sum of $200,000 per base station and $4,500 per km of fibre, the total sum of $3.9 Billion (N585 billion) was required to fund the gap.

According to the convener of the forum, Titi-Omo Ettu, the major issue hindering expansion revolves around Right of Way (RoW) issues, which required urgent government attention.

Omo-Ettu, in what he described as the “Bill of Request” to the government, advised that government should deploy Universal Service Provision Fund (USPF) to support the payment of RoW for Service Providers.

He also emphasized the need for service providers to be encouraged to approach the USPF and other institutional funding mechanisms in convenient cooperative groups to seek funding support for broadband related investments.

While appreciating the Ministry of Communications Technology for its achievement so far including the provision of an ICT Policy for the country, though in draft, significant work on issue of resolving the RoW guidelines, the creation of a critical infrastructure bill that will protect communications infrastructure and the Student PC Ownership Scheme, the establishment of ICT incubation Centres to facilitate software development, IT Innovation Capital Venture Fund among others, “using all these as realities, we can only take advantage of them if we bring to attention of our people to them and attention of government to the major hindrance which lack of access to investment funding is capable of throwing in to slow the march towards realising these goals.

In MainOne Cable Company’s presentation, Nigeria and other countries must secure their position in the global digital economy.

Jumoke Akande, who presented on behalf MainOne, said that submarine cables had significantly impacted broadband penetration in Nigeria, claiming that there had been over 80 per cent reduction in wholesale prices on International bandwidth.

By and large, in her response, the Minister of Communications Technology, Mrs. Omobola Johnson noted that providing country wide, demand driven ICT services at reliable broadband speeds and at affordable prices positively impacted several of the pillars by which the country’s global competitiveness is judged.

Johnson noted that with over $25 billion invested in the industry by the private sector to date and a healthy number of participants in the market, “I think you will agree with me that government has played her part credibly well.”

However, she said that with low broadband penetration rates and high cost of access significant work still remained to be done and significant investments are still required to be made.

“The industry landscape has changed since the early days of liberalisation – the competitive landscape has changed, the technology continues to evolve consumers are getting more demanding for bandwidth and industry priorities for infrastructure are now more focused on broadband employment raising new challenges for our network operators and infrastructure providers.