Nigeria’s broadband penetration spend to reach N17.4bn

by | February 1, 2018 1:05 pm

Federal Government’s determination to boost broadband penetration and expand telecoms infrastructure in line with proposed national broadband target of 30 percent penetration by the end of 2018 will gulp a minimum of N17.4 billion from the federation coffers.
Nigeria will need at least 120,000 kilometres of metropolitan fibre networks interconnected across the country for adequate broadband penetration. Currently, the country has been able to cover 38,000 kilometres of fibre, which is nowhere near enough to boost broadband penetration.
Going by the existing shortfall in available fibre network and the estimation of N145 per meter unit price rate, according to Umar Garba Danbatta, executive vice chairman, Nigeria Communications Commission (NCC), this will cost N17.4 billion.
It has become necessary to invest in telecoms infrastructure, as a report from the Gregory Kreston-led team of research analysts at FBN Quest Capital shows that “Nigeria’s internet subscription remains heavily dependent upon mobile networks services.”
According to the NCC, internet subscription via mobile networks accounted for over 95 percent of total subscriptions in November 2017.
The analysts’ views come on the heels of Danbatta saying, “The Federal Government needs to ensure that all 36 states of the federation need to adhere to the resolution of National Economic Council on the Right of Way (RoW) charges, which stipulates N145 per meter for laying fibre network in every part of the country.”
Danbatta showed uncertainty in the possibility of achieving the targets set for the national broadband plan in 2013, saying, “We cannot compel the state governments to charge N 145 per meter for fibre. The Federal Government can, however, meet with the governors and extract a commitment from them, to ensure that NEC’s provision is strictly adhered to.”
The country’s inability to meet the proposed target and surpass its current 21 percent broadband penetration rate has been a source of concern. This is especially among analysts who propose that huge investments should be made in telecoms infrastructure for Nigeria to stand a chance in becoming an active member of the current digital transformation within the global village.
Although, latest data from the NCC show a 2.6 percent year-on-year growth in internet subscriptions, with 94.8 million internet subscribers as of November 2017, the challenge with this, is that the telecoms industry is beginning to see a decline in internet subscriber numbers from recorded figures of 97.8 million subscribers in November 2015 to 94.8 million in November 2017.
“The current figures however implies density of 51 percent in a population estimated at 185 million, placing Nigeria well above the African average of around 16 percent as estimated by McKinsey.
“In November, there were 931,000 new internet subscriptions recorded, compared with 912,000 the previous month.”
Industry watchers say that although there has been gradual growth in recent months, there is a lot of contributory factors to the reduced numbers in the last two years, including the fact that the troubled 9mobile (formerly Etisalat) experienced subscriber loss for six consecutive months since it missed its $1.2 billion debt payment and was taken over by its lenders, losing almost five million subscribers from about 21 million to its current 17 million subscribers.
“Statistics show that there were slightly over 180,000 internet subscriptions lost on the network in the month of November,” the FBN Quest Capital report stated.
MTN, which accounts for the largest share of total subscriptions (35%), also lost a few million subscribers in the last two years as a result of the regulatory fine imposed on the company for failing to disconnect improperly registered SIM cards on its network. The company came down from having almost 38 percent of the market share and industry experts insist that competent infrastructure is the solution to survival and growth.
“The market competition is clearly dominated by MTN, which although has lost a few million subscribers in the last year or two, as a result of a huge regulatory fine, might have the capacity to cope with economic challenges because of its infrastructural advantage; that is, the ownership of both the 2.6GHz spectrum frequency and the 700MHz spectrum,” Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), told BusinessDay.
Danbatta said, “As Nigeria strives to build the needed ICT infrastructure, the efforts will be in vain if there is no mass of ICT adoption and use, to drive the digital revolution.”