Broadband Access: Daunting Challenges Undermining Penetration Drive

DAUNTING challenges enunciated in the Nigeria’s telecommunications operating environment are likely to stagnate the industry stakeholders’ efforts in the actualisation of the professed 2018 set target for 30 percent broadband penetration by government.

There is a professed jubilation that the nation is on the pathway of excellent performance as far as broadband penetration is concerned but investigation showed that so little has been achieved when compared with what obtained in the global economies, whose telecoms expert labelled Nigeria as the fastest growing telecoms market in Africa.

President of the Association of Telecommunications Companies of Nigeria, ATCON, Engr. Lanre Ajayi disclosed to the ICT-BizAfrica that content is still a major subject of discussion when the quest for more broadband penetration is in focus.

According to him, the quest for more broadband penetration is not commensurate with what the broadband will be used for saying so many government activities are not yet online, and where there are government activities online, it is not properly deplored.

He said that for broadband availability to be useful there much be sufficient online activities, particularly from the side of government, since most business activities in the country are linked with governance.

However, speaking at the Commonwealth Telecommunications Organisation (CTO), Broadband forum 2015 held in Abuja, the Executive Vice-Chairman of the Nigerian Communications Commission, NCC, Dr. Eugene Juwah expressed satisfaction that the present level of broadband penetration has impacted on the economy.

Juwah who was represented at the forum by the Executive Commissioner, Stakeholders Management, Dr.OkechukwuItanyi cited education, health care provision, energy management, security, and information dissemination as areas in the economy wherein broadband services have had positive impact on the nation.

He however admitted that there is the lack of a robust fixed network infrastructure noting that there is the need to rapidly develop the infrastructure to provide universal broadband services required for a coordinated national approach.

Juwah stated that efforts have been made to address the challenge saying that one of such was the crafting of a National Broadband Plan covering the period 2013 to 2018.

The policy and regulatory strategies for accelerated broadband infrastructure development was thus articulated taking due cognizance of the unique conditions prevailing the country.”

The ATCON highlighted that the quest for broadband penetration seems to have left bulk of the nation’s citizen in the rural areas out of the broadband quest by the industry saying that presently most Nigerians in the rural areas do not have access to the internet.

He said that where that is present, the speed and stability of the connection is far below international standard. 

Secretary-General of CTO, Prof. Tim Unwin disclosed at the CTO that that is an area where government and the private sector need to focus on.

He said at the forum in his welcome address that government officials and policy makers should put all hands on the deck if the nations within the Commonwealth must harness resources to make broadband available to their citizenry especially in the unserved and under-served.

Permanent Secretary, Federal Ministry of Communications Technology, Dr.TunjiOlaopa said that broadband is the catalyst for achieving a knowledge based economy saying that it potentially influences the entire economy as a general purpose platform used as a key input across various sectors ranging from health, commerce, education, banking” among others.

According to him, the economic impact of broadband penetration has been found to be quite impressive, noting that World Bank studies showed, quite conclusively, that in low and middle-income countries, every 10 percentage point increase in broadband penetration accelerates economic growth by 1.38 percentage points indicating the need for the world over to do everything possible to ensuring the roll out of broadband infrastructure.

Still on the sideline of the CTO concerning the present state of broadband penetration in the country, Chief Executive Officer of Etisalat Nigeria, Matthew Willsher said that nothing has be done yet by government and their agents to address the challenges of broadband penetration.

He said that the Ministry of Communications Technology and the NCC must put in place policy and regulatory interventions to address challenges affecting broadband development in Nigeria.

According to him, in the telecommunication sector revenues and profits go to one operator while others struggle to survive noting that it is largely responsible for the broadband investment deficit and resultant low broadband penetration in Nigeria.

 Willsher stated that the presence of several struggling operators, many of whom are barely active, in an industry the size of Nigeria’s, is indicative of serious underlying issues with value distribution across the industry.

He said that the concentration of 70 percent industry EBITDA and probably all of the industry’s net profit in one operator is to the detriment of the rest of the industry.

 “Nigeria has underperformed in the area of broadband development in comparison to its peers. Nigeria’s mobile broadband penetration stands at 10.1 percent while the average for peer countries in Africa is 30 percent. Peer countries have an average Smartphone penetration of 26 percent while Nigeria’s Smartphone penetration averages 12 percent”, he said.

 He called for tailor-made regulations to enable unprofitable operators compete more favourably in order to attract a greater share of the currently lopsided value in the industry. 

According to him ‘it is perfectly normal to have asymmetric regulation in a market where one operator holds the sort of market share and significant market power – and pertinent to ask is whether Nigeria can learn from the success of other markets in restricting dominant players in the interests of the industry and the country at large’.

Aggrieved Willsher said that if struggling operators can extract a better share of industry value, they are more likely to increase their broadband investment which will drive broadband development in Nigeria.

 While identifying inadequate spectrum support broadband deployment as a key challenge in the provision of broadband services in Nigeria, he suggested that mobile broadband is clearly Nigeria’s best route towards achieving its broadband coverage objectives given the high cost associated with fixed broadband.

He stated that the most valuable coverage spectrum is under-utilised with the sub-optimal use of the 800MHz spectrum and the delays being experienced in the freeing up of the 700MHz spectrum saying that accounts for Nigeria’s inability to meet the June 17^th 2015 deadline set by the ITU to migrate from analogue to digital broadcasting.

He revealed that the recent closure by the Central Bank of Nigeria of the Wholesale and Retail Dutch Auction windows has resulted to telecommunications operators sourcing foreign exchange to fund equipment purchases at significantly higher rates through the interbank foreign exchange market.