THE NIGERIAN TELECOMS INDUSTRY BRIEF (May, 2018)
Here is an update on the Nigeria Telecommunications Sector (June, 2018), highlighting the activities of the Nigerian Communications Commission across subject-matter pertaining to the sector.
- ISPs and Renewal of Licences:
Another 22 licenses will expire next year, and it is doubtful if the ISPs can cough out the renewal fees. The individual license category costs $500,000 for a period of five years. Already, about 17 ISPs with expired licenses, due for renewal since February this year have failed to do so. The fate of the ISPs also raises concerns over the quality of internet connectivity in the coming days; the future of firms; as well as the jobs of hundreds of employees.
- Spectrum Re-distribution: 800MHz
Demand for Spectrum has increased due to emergence of disruptive innovations such as Mobile Broadband, Web Applications, Cloud Computing (CC), Internet of Things (IoT) and the proliferation of smart devices amongst others. To reap the benefits of effective utilization of Spectrum as well as improve operational efficiency and regulatory excellence, the Commission in accordance with its mandate as enshrined in the Nigerian Communications Act (NCA) 2003 embarked on re-planning of some of its frequency bands.
The commission has completed a new framework that would give telecommunication companies the opportunity to participate in spectrum sharing. With the new framework, you can transfer, lease and share spectrum.
- Digital Economy
The future of nations will be driven by ICT and broadband technologies. Priority areas for the digital economy to strive on include: Expanded broadband access and improved quality; Investment promotion in the ICT Sector; Supporting entrepreneurship and promoting digital transformation; Encouraging e-commerce cooperation; Enhancing digital inclusion; Promoting development of MSMEs.
Constrained digital economies can potentially realise a 0.5 per cent increase in GDP per capita for every 10 per cent increase in digitisation. Digitisation also has a secant impact on job creation in the overall economy: an increase of 10 per cent in digitisation reduces a nation’s unemployment rate by 0.84 per cent.
The 8-Point Agenda of Management of NCC is to key into the Digital economy framework and the flagship of the 8-Point Agenda is Broadband.
- Mobile Broadband Penetration; Right-of-Way Charges; Broadband and the 2018 Budget
So far, mobile broadband penetration in the country stands at 22 percent – NCC Claims. The National Broadband Plan was not restricted to mobile broadband Penetration but also terrestrial infrastructure. There is need to look into terrestrial infrastructure.
The NCC is Licensing 7 Infracos to provide Broadband penetration for accessibility at affordable rates. So far, 5 Infracos have been licensed to provide metropolitan fibre Infrastructure. The commission had, earlier in the year, licensed two infrastructure companies to lay the foundation for internet penetration and increased broadband services. The two INFRACOs are Zinox Technology Ltd. for Southeast and Brinks Integrated Solutions Ltd. for Northeast. Over a year ago, MainOne Cable Company had been licensed to provide services in Lagos, while IHS got its license to cover the North Central Geopolitical Zone including Abuja. This and other support services provided by the Universal Service Provision Fund Department of NCC (USPF) (BTRAIN-Backbone Transmission Infrastructure of over 3,250km of fiber across six geo-political zones-Base Transceiver Stations (BTS) :155 BTS sites) to unserved and underserved areas will help close the Communication gaps in existence.
12 metropolitan fibre cable network companies and 12 national long-distance operators have also been licenced.
Mobile Network Operators (MNOs) have deployed about 52,000 kilometres of fiber optic cables as at April 2018; There are about 33,000 2G, 29,000 3G and 4000 LTE sites deployed as at April 2018. The sector’s investment is put at over $70 billion.
Five international submarine cable and landing station services operators have landed cables in the country.
The federal government is working on an initiative with the governors’ forum that would see to laying fibre that would cover up to 18,000km in the country.
The commission had examined the open access model as the model for optic fiber transmission network deployment to bridge the current gap and deliver fast and reliable broadband services to households and businesses. It also established a Broadband Implementation and Monitoring Committee (BIMC) charged to drive the broadband infrastructure licencing and deployment using the open access model.
The Commission is also engaging necessary stakeholders to address the extant challenges to telecoms infrastructure deployment, such as Right of Way (RoW) issue, multiple taxation, multiple regulations, vandalism, fibre cuts, equipment theft at sites, and indiscriminate closure of telecoms sites by state agencies etc, which affect Quality of Service (QoS).
A deluge of submarine broadband cable investments by private concerns like Mainone, Glo 1, West African Cable System, WACS and NITEL’s Sat 3, have a volume of terabytes lying fallow on the shores of Lagos while the country struggles fruitlessly to achieve last mile deployment.
On Right-of-Way Charges, The National Economic Council (NEC) RoW guideline stipulates N145 per metre for laying fibre network in every part of the country. But it is observed that states have arbitrarily fixed their own charges which range between N1,500 and N6000. While states like Rivers and Abia, charge N1,500 and N2,000 respectively, others like Lagos, Delta and Ogun charge up to N5840, N4,600 and N6,500 respectively. Yet, only a paltry 38,000 km fibre out of about 120,000 km of fibre network required for pervasive coverage has been deployed in Nigeria.
On the National Budget: The 2018 Budget allocated N100 Million to Broadband penetration and N1.58 billion to NigComSat.
- New ICT Policy
There are plans to formulate a new national policy on Information Communication Technology. The new policy would provide a framework for streamlining the ICT sector and enhancing the ability to catalyse and sustain socio-economic development. It would cover ICT infrastructure, internet and broadband, local content development, legal and regulatory framework.
(Update: The new ICT policy has been launched)
- Multiple Taxation
We have 26 taxes impinging on the industry and there are 27 communication services tax to be introduced – ATCON President, Olusola, Teniola. There is the first level tax, which is the federal government, the state government tax and even the community where base stations are built demand money.
- OTT Regulation
Many traditional telecom service providers believe traditional telephony and SMS revenues are under threat from newer, IP based alternatives like WhatsApp, Skype, Viber etc. Internet Service Providers are calling for regulation of OTT Services: Any potential licencing structure for players?
TELECOM INDUSTRY STATISTICS (May, 2018):
Number of Subscribers: 162,522,772
Operator Market Share: MTN – 41%, Globacom – 24.61%, Airtel – 24.51%, 9mobile – 9.88%
Technology Market Share: Mobile GSM – 99.7, Mobile (CDMA) – 0.1%, Fixed (Wireless/Wired) – 0.1% VoIP – 0.1%
Internet Subscriber Data: GSM – 103,152,726; CDMA – 30,309; Fixed (Wired) – 10,328; VoIP – 321,634
Contribution to GDP: 9.19%
Internet Penetration: 47%
Mobile Penetration: 84%