Nigeria Requires U.S.$136 Billion to Bridge Telecoms' Infrastructure Deficit - NCC

2 December 2019

The Nigerian Communications Commission (NCC) has said Nigeria needs to double its current $68 billion investment in telecoms infrastructure to $136 billion in order to address the infrastructure deficit in the sector.

The Executive Vice Chairman of NCC, Prof. Umar Danbatta, while delivering the keynote address at the 2019 Distinguished Electrical and Electronics Engineers (DEEEAL) Annual Lecture in Kano, at the weekend, said although Nigeria had huge bandwidth capacity of submarine cable landings on the shores of Lagos, the country could not boast of ubiquitous broadband infrastructure in the hinterlands.

This he attributed to inadequate telecoms infrastructure to transmit and distribute broadband capacities from the shores of the country to the hinterlands.

According to Danbatta, more than 60 Tera bits per second (60Tbps) bandwidth capacity of submarine cable landings from submarine cable operators like MainOne, Glo1, MTN WACS, and SAT 3, are on the shores of Lagos, yet Nigeria uses less than 10 per cent of the 60 Tbps capacity as a result of infrastructure deficit.

"More than 60 Tera bits per second (60Tbps) bandwidth capacity of submarine cable landings are on the shores of Lagos. Operators and the Universal Service Provision Fund (USPF) have laid over 42,000 kilometres of intercity fibre. Sub-optimal intercity fibre capacity utilisation exists due to duplications of some routes. Internet access is mainly through wireless infrastructure, and more than 40,000 Base Transceiver Stations (BTSs) are broadband enablers, yet Nigeria is underutilising its huge broadband capacities sitting at the shores of Lagos for lack of sufficient telecoms infrastructure.

"Currently there is under-utilisation of the submarine broadband capacity on the landing shores. As it stands, Nigeria uses less than 10 per cent of the 60 Tbps capacity. There is inadequate intra metro fibre infrastructure in several towns and cities, and 120, 000 km fiber is required. We have deficit in telecoms investment. So far, telecoms investment in Nigeria is put at $68 billion, which is huge, however, double the amount is required to address our infrastructure deficit," Danbatta said.

Explaining the importance of ubiquitous broadband capacity for national development, Danbatta said broadband remained an interconnected, multi-layered ecosystem, which would provide exciting value chain of digital readiness, digital development, digital opportunity, and digital inclusiveness.

"Therefore, broadband revolution is aspired globally by all countries, as it triggers remarkable changes in productivity and employment, economy and enterprise development, public services and national competitiveness, governance, among others", Danbatta said.

He cited a World Bank study, which has shown that for every 10 per cent increase in broadband penetration, there is a corresponding increase of 1.3 per cent in Gross Domestic Product (GDP) of developing countries, adding that broadband is an enabler for social and economic transformation of every nation, and that Nigeria has adopted the Open Access Model (OAM) for the development of her broadband ecosystem.

Explaining efforts made by NCC in addressing the issue of infrastructure deficit and other identified challenges, Danbatta said the commission adopted the Open Access Model (OAM) and Optimum Spectrum Utilisation to address the fixed and wireless broadband infrastructure deficits in the country.

He said NCC had also licensed Infrastructure Companies (InfraCo) project and adopted strategies for attracting investment, bridging clusters of access gaps, as well as engaging stakeholder management.

According to Danbatta, a subsidy would be paid-out to each and every InfraCo on reaching predetermined milestones, which is based on a predetermined percentage of the CapEx of the InfraCos.

The InfraCos are to roll-out broadband networks over a period of four years across all local government areas (LGAs), with deployment taking place in every state annually in order to ensure national spread of broadband penetration and services.

The Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, at a different telecoms fora, had highlighted the challenges of the telecoms industry to include: multiple taxation, multiple regulations, and Right of Way (RoW) charges, electric power supply and vandalism of infrastructure and scarcity of foreign exchange.

According to him, the challenges continued to increase telecoms capital expenditure (CapEx), which he said, may compel telecoms operators to transfer such additional cost to the end users who are the telecoms subscribers. He therefore called on the federal government to rise up to the challenges and deal with them appropriately.

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