Fresh round of licensing coming as NCC plans 7 InfraCos in 2014

A fresh round of licensing in Nigeria’s vibrant telecommunications market is expected to begin in December 2014, which would give birth to seven regionally-based infrastructure companies (InfraCos) as well as a new wireless last-mile operator, according to the Nigerian Communication Commission (NCC), which said it had already drawn up key timelines and activities that would lead to the issuance of these licenses.

The InfraCos are companies that will help in the deployment of critical Information and Communication Technology (ICT) infrastructures in the six geopolitical zones of the country towards accelerating broadband services deployment. Seven of these companies are expected to be licensed by the NCC.

“By January 2014, we would publish notice of expression of interest. By May, we would do the selections of the bidders and eventually by December 2014, we would award the InfraCos licenses to the winners,” said Eugene Juwah, executive vice chairman, NCC, at the maiden edition of Telecoms Stakeholders’ Summit held in Lagos yesterday. He added that based on the timelines already drafted by the commission, the companies would be subjected to due diligence and NCC would be fair and transparent to all bidders.

He explained that the InfraCos would be offered one-off subsidy based on peculiarity of the business model and geographical coverage to better meet the NCC broadband objectives.

It would be recalled that in January 2001, the NCC had conducted an auction for Digital Mobile Licences (DML), which was acclaimed locally and internationally as one of the best in the world due to the high level of transparency associated with the exercise. The auction brought about the emergence of three mobile network operators (MNOs) – Econet Wireless (now Airtel), MTN and MTEL, a subsidiary of the incumbent operator, the Nigerian Telecommunications Limited (NITEL).

The InfraCos will roll out national fibre optic network for broadband under plans by the presidency to boost high speed internet services across the country, according to the regulator. There are more than 30,000 kilometres of domestic fibre optic cables to connect those international cables to more than 50 percent of the population. But, access to fibre to move bandwidth across the length and breadth of the country is so far discriminatory and inordinately expensive. With this new exercise, the NCC says it is taking a direct approach towards resolving Nigeria’s broadband internet quandary through a new industry structure based essentially on an open access model.

This recent move, according to the telecoms regulator, has become imperative in view of Nigeria’s slow and inordinately expensive access to internet services which exists in spite of the N478 billion investment in international bandwidth connectivity on the coastline.

Earlier, Omobola Johnson, minister of Communication Technology, said the ministry had been taking measures to address some operational challenges facing telecoms companies. According to the minister, the implementation of the InfraCo model would enable ubiquitous broadband access, which would in turn help in accelerating economic development in the country, adding that broadband would particularly help in boosting the country’s Gross Domestic Product growth.

“ICT sector today contributes just over 8 percent to Gross Domestic Product. If we achieve our targets of a five-fold increase in broadband penetration by 2017, from 6 percent to 30 percent, we will deliver through broadband a phenomenal 3 percent increase in GDP,” she said.

The minister further said the National Broadband Strategy and Roadmap, which is the framework that that encapsulates the broadband initiative in the country, articulates how “we will deliver these broadband targets local government by local government and state by state”.

Meanwhile, Lanre Ajayi, president, Association of Telecoms Companies of Nigeria (ATCON), who spoke at one of the sessions at the event, cautioned the regulator to be wary of policies that could exert negative influence on the industry. “One thing that I have always advised us to watch closely in this country is the government policy being formulated to drive any sector. In most cases, the people who drafted a policy may have good intentions while in most cases, such policies may have some unintended impacts on the industry,” he said.

Funke Opeke, chief executive officer, Main One, while acknowledging the effort of the NCC and the ministry on the Right of Way challenge, however, harped on the permanent solution to cabling permits issues.

“If you cannot get capacity from Lagos Island to Ikeja because of the challenge of RoW and high cost of getting it, I wonder how easy it will be to take that capacity from the shores to the hinterlands,” she said.

While commending the Lagos State initiative in reducing cost of RoW per linear metre from N3000 to N500, representing an 85 percent reduction, Opeke also stated that the Open Access Model being introduced by NCC would help in encouraging faster broadband services to schools, hospitals, businesses, and so on.

By: Ben Uzor Jr