Issue #25   •   Quarter 3/4 Edition   •   December 2018


2014Q1-news open accessThe Nigerian telecom sector has been variously hailed as the fastest growing sector in the nation’s economy. From a $50 million industry in the days of state-run NITEL, it has grown to a $25 billion sector in investment with sundry multiplier effects in job creation, wealth creation, ease of living and doing business. Yet, in spite of this phenomenal growth, services have eluded some remote parts of the country. Plus, there has been intense debate over issues of cost, quality of service and internet penetration.

In thinking through these challenges, the federal government rolled out a National Broadband initiative. The initiative targets massive urban and rural deployment of all aspects of telecoms including data applications. This is expected to boost the economy and throw up a rash of opportunities for telecoms investors and consumers. Besides, it will trigger a wider dimension of enablement for commerce, education, agriculture, healthcare, banking, entertainment among other endeavours. To make good government’s expectations, the NCC has adopted Open Access Model to push Broadband into all nooks and crannies of the country as well as making investment in the emerging broadband frontier an attractive one for investors. Dr. Eugene Juwah, the Executive Vice Chairman of the NCC is upbeat about the positive transformation that Open Access model would bring to the economy. The model adopted was not an imposition by the regulator but the result of wide-range consultations with industry stakeholders. With this, the regulator hopes to unbundle the broadband infrastructure market to meet the Federal Government’s 80 per cent broadband penetration target by 2017.

According to Juwah, the Commission is committed to putting in place a new broadband deployment environment through an ‘Open Access Model’ in line with the National Broadband Plan. The “Open Access Model” has been examined as the model for optic fibre transmission network deployment to bridge the current gap and deliver fast and reliable broadband services to households and businesses. The model is also envisaged to address the challenges of congested and unplanned towns, the challenges around infrastructure sharing and other issues such as high cost of Right of Way. He continues: “the Open Access Model will potentially help optimize the cost of broadband access across Nigeria and ensure that all operators, whether large or small, have equal access to broadband infrastructure. In this regard, the NBN is envisaged to be an open-access carrier-neutral backbone and metropolitan fibre network that spurs service innovation. The National Broadband Network (NBN) framework will provide an open- access, non-discriminatory and non-exclusive pricing to all service providers”. The objective of this initiative is to stimulate a new national broadband network that is not only more widespread but also faster and more secure than what is available today, thereby stimulating other sectors of the economy and leading to higher economic growth. In addition, it will offer efficient connectivity as well as ultra-high-speed broadband services that are available, affordable and sustainable.

This industry direction, the NCC said, had become imperative owing to the high cost of Internet access and the prevalence of poor quality of service in the industry. In line with this, the commission also said it would auction the two remaining slots in 2.3GHz spectrum band in order to enable the provision of last mile wireless access on a wholesale basis. Juwah had maintained that the current situation was mainly attributed to the lack of a comprehensive domestic fibre backbone within the country connecting the local government areas as well as a widespread and expansive metropolitan fibre mesh network within the cities. Juwah said, “It is estimated that about 56 per cent of the 774 LGAs have backbone optic fibre present. The presence of fibre in an LGA does not necessarily mean that high capacity transmission services or dark fibre services are available from existing operators at competitive prices.” He said in spite of the recent progress recorded in the telecoms industry, fibre deployment in the country had been plagued by a myriad of difficulties ranging from administrative procedures regarding right of way permits to poor urban planning. Juwah also identified lack of infrastructure sharing among operators as also hindering efficient Internet access.

It is in a bid to address these challenges that the NCC is proposing an overhaul of the current industry structure, which consists of integrated operators offering end-to-end services and long distance operators offering wholesale services, among others. According to NCC, the legacy structure has served the country well in terms of penetration of mobile services. Something else has to be done to trigger efficient data delivery via broadband. The NCC boss said: “But, it has faced limitations in terms of increasing availability and penetration of high-speed broadband infrastructure. Teledensity has reached 88.3 per cent as of July, 2013. On the other hand, broadband penetration is still low at about eight per cent.” It is envisaged that the new model will help address challenges of Multiple taxation/Right of Way, unplanned towns and cities, damage to fibre cables, poor infrastructure sharing and insecurity and vandalism. It would be recalled that as a result of insecurity and vandalism, a section of the North was cut off from the national telephone grid for many months.

The import of the new Open Access model is that government will help absorb some financial pressure, thereby making services available and affordable to even the most far-flung people.

The regulator predicts that the growth of broadband will be driven by the following initiatives:

  1. A robust National Broadband policy to support an open access broadband model and deployment of a nationwide broadband network. These will ensure sustained investment and ensure greater penetration of broadband in the country
  2. Harmonised and reduced Right of Way (ROW) cost for all tiers of governments. Efforts by the Minister of Communication Technology to agree and harmonise RoW charges across states through the National Economic Council and the Presidency is already yielding results as some states have cut drastically their charges for RoW.
  3. Harmonisation of taxes to prevent multiple taxation by all tiers of governments
  4. Government policies and initiatives including support for e-governance and growth of e-commerce.
  5. Resolution of the security concerns, vandalism and damaged cables due to road construction in the country.
  6. A robust telecommunication regulatory regime encouraging non-discriminatory and price-competitive open access to support nationwide fibre deployment and provision of transmission and fibre services.


Why Open Access Broadband Network Model

In order to achieve the Nigeria Vision 20:2020 economic transformation blueprint, there is a need for a long term widespread deployment of a robust nationwide comprehensive backbone and metropolitan fibre infrastructure. The following highlights the salient principles for a national open access broadband network:

  1. Nationwide fibre penetration
    The broad objective of the Nigerian National Broadband Plan is to target a fivefold increase in broadband penetration by 2017 over the 2012 penetration levels. This can be achieved by extending the backbone fibre infrastructure network to beyond state capitals into metropolitan areas in Nigeria bringing it as close to potential customers as required to encourage and support investments in “last mile” technologies and systems by the private sector.
  2. Non-discriminatory and open access
    Existing nationwide operators are vertically integrated with end to end service offerings riding on their own infrastructure. There is also duplication of fibre infrastructure on some routes while there is lack of access to fibre infrastructure in other areas. On certain routes, limited capacity swaps are being implemented between operators to enhance coverage and/or provide redundancy. Most operators also build fibre only in commercially viable areas, to follow demand of their own retail services rather than lead it; the industry fibre deployment is concentrated and sub-optimal leaving large parts of the country including metropolitan areas without any access to fibre optic infrastructure. Even where fibre is available, there is little wholesale capacity available in the market on open access basis and at reasonable prices. Hence, there is currently very limited wholesale dark fibre and limited wholesale bandwidth availability on a geographically widespread non-discriminatory and open access basis.
  3. Optimized Deployment Strategy
    Notwithstanding NCC’s aim to provide nationwide backbone and metropolitan fibre coverage, a phased roll-out deployment strategy that focuses on proof-of- concept for commercial viability in select parts of Nigeria is crucial. Towards this end, existing stakeholders will be consulted for the deployment phasing and structuring a sustainable business model that benefits whole of the industry while achieving the objective of greater broadband penetration towards stronger economic impact.
  4. Co-operation of Existing Operators
    There are quite a number of existing operators that have already laid fibre infrastructure in certain parts of Nigeria, mostly intercity. In order to move towards the long term deployment of a robust nationwide comprehensive backbone and metropolitan fibre infrastructure, cooperation of existing operators is envisaged to drive faster rollout and cost efficient delivery of the infrastructure, thereby benefitting all the stakeholders involved.

Various industry stakeholders have hailed the Open Access model adopted by the NCC. They see it as the best possible option to optimize the broadband infrastructure in the country as well as provide a level-playing field for operators rather than promoting undue domination and quasi monopoly in this new frontier of telecoms in the country.