How Broadband Penetration Will Boost National Economy | Independent Newspapers Nigeria

To transform the Nigerian economy to a digital knowledge-based economy for national development, the government needs to provide available, accessible and affordable broadband services to all citizens.

Engr Lanre Ajayi, former president, Association of Telecommunications Companies of Nigeria (ATCON), speaking with DAILY INDEPENDENT on the development, said if factors responsible for the under-achievement of the broadband penetration such as the Right of Way (RoW), licensing of spectrum among others are addressed holistically, the country would achieve significant development and growth within a reasonable period of time.

According to him, “We need proper planning. But it is not enough to just plan, we must have a robust plan that can lead to desired results. The 2013 broadband plan was well set out by the government.” 

Several factors are responsible for slow broadband penetration. The licensing of spectrum process is not quite encouraging because of the slow pace in giving out the required spectrum. Some states and local governments have not been confrontational in this resolving the issue. Also of importance, is the need to have good broadband pricing that will encourage existing investors to invest more and attract potential ones.

The telecommunications industry is one that is characterised by significant upfront investment in spectrum licenses, equipment purchases, and network infrastructure roll-out among others. But at the very top of the list is bureaucracy, which Merriam Webster dictionary defines as a system of administration marked by officialism, red tape and proliferation.

The Inclusive Internet Index of the Economist Intelligence Unit (EIU) recently ranked Nigeria as the country with the most affordable Internet in Africa. 

However, when price is compared with minimum wage, the ratio for the cost of 1GB of Internet data in Nigeria is likely higher than some other African countries. However, some telecoms operators have been dropping their data prices in recent months.

NCC has been playing on both the defence and offence — threatening to revoke licenses while also highlighting the reasons Infrastructure Companies (InfraCos) are not building telecom infrastructure.

This will in no way help the achievement of the activities any proposed broadband plans.

That bureaucracy is responsible for the high cost of Internet is not far from the truth. It has been estimated that InfraCos will have to pay a combined ₦600 billion to the 36 state governments in Nigeria as Right of Way (RoW) charges, which can often be as high as 50% of the entire cost of building infrastructure.

RoW is the legal instrument that gives permission to lay fibre-optic cables along specific routes through facilities that are typically government-owned like roads, water, power lines, etc.

Before now, state governments were requesting for as high as ₦25,000 as against a recommended charge of ₦145 per metre of fibre for RoW. 

This exuberant cost, among other expenses, is then transferred along the value chain which drives up the price to the end-users. But NCC has been able to intervene, with states agreeing to a more affordable rate.

Giving free RoW to build infrastructure will definitely go a long way to boost penetration while also reducing the cost to the end users. 

In Nigeria, having a higher spread of infrastructure is about how deep a company’s pocket is. Infrastructure sharing has the potential of broadening broadband penetration, and it also makes it easier for new entrants into the market. 

Policies and regulations within the sector don’t really address how to make access affordable while also limiting the impact of the factors that are driving up the price of Internet.

Stakeholders have been calling for a strong regulation that would enhance the collaboration among players which is still lacking. And enforcement of the existing policies and regulations is key.

There’s also the need for regulations that facilitate the cost-effective use of infrastructure and resources by service providers like permission to share active elements of network infrastructure among others. 

Multiple taxation and unfavourable conditions for the industry in terms of access to foreign exchange only serve to exacerbate the high cost of delivering Internet services and, by implication, the cost of access to Internet services.

According to Ericsson’s report titled “How Important Are Mobile Broadband Networks for Global Economic Development?”. The data from 135 countries, including Nigeria, were examined.

It points out that previous reports have examined fixed broadband, and researchers have only been able to estimate its effect on economic growth.

The study, on the other hand, has been able to conclude the introduction of mobile broadband has an immediate positive effect on a country’s economy, and a longer-term knock-on effect as mobile broadband gradually spreads to different economies.

 According to the International Telecommunication Union, mobile broadband subscriptions have grown about 30% annually in the last six years.

A GSMA study shows that in Africa, limited network coverage remains a key barrier to mobile Internet adoption. Presently, mobile broadband networks cover around 50% of the population, meaning that 600 million people in the region do not have access to a mobile broadband service.

“To ensure efficient mobile broadband adoption, stable and efficient policies and regulations are essential for mobile operators to have the best conditions to roll out mobile broadband networks in underserved areas. Private investment depends heavily on the regulatory climate,” Ericsson advised. 

On his part, Engr Stephen Bello, former Commissioner at NCC, said that much can be achieved if there is a political will. 

Bello said: “Talking of broadband, it is an infrastructure that requires government full support because of its spread to facilities. There are three levels of permission to pass through before broadband can get to the last mile. For physical cables to be drawn to the cities, permission must be obtained from the respective cities and other authorities before full deployment of broadband to the last mile. Why all these permissions are necessary is because of utilities such as railway line, pipelines and power lines.  

In his view, Dr. Jimson Olufuye, former president, Information Technology Association of Nigeria (ITAN), posits that the country is doing her best in the area of broadband penetration. He how submitted that a lot needs to be done to justify what is being invested in the initiative.

In his words: “What I think we should be focusing our attention on mostly is the quality of service. The telecoms service providers are in almost every part of the country. If they can provide quality and steady service, it will become easier for the underserved and unserved in the periphery of the country to be reached with internet service.

“Today, there are many smartphones users. This in a way will aid broadband penetration. Many mobile devices are available in the hands of many people in the country. This will help the operators to know how to get people from any part of the country to connect to their service. The drive of G4/LTE is a laudable development too. If there is quality service, we can cover more grounds than planned for.”

The government at all levels needs to reconsider the importance of the ICT sector, especially since increasing broadband access is a key component of the nation’s economic growth.  

But it’s not enough to talk about the benefits of broadband penetration. The government needs to reevaluate its activities and particularly the National Broadband Plan and this will drive penetration and its effect on the economy.

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