Saturday, 13 January 2018

Operators doubt 30% broadband penetration target for this year

Telecommunications operators that are expected to deploy telecom infrastructure for the realization of government broadband penetration target of 30% by the end of this year have described the target as a mere wish.
 They explained that the operating environment and policies of government in relation to deployment and protection of telecommunications infrastructure does not encourage investment.
Engr. Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), expressed concern over issues of interference by state government agencies and their consultants in shutting down base stations of operators as well as lack of strong will on the part of federal government in driving stakeholders to bring about stability in the industry.

“How can you achieve 30 percent broadband penetration when efforts that are supposed to be channel to network optimization are used in repairing shut down towers by state government agencies. As I’m talking with you now (on Wednesday) our men are in Jalingo, Taraba state discussing with the state government over a state law on multiple taxation that has led to base stations of our members being shut down.

“We are facing the same situation in Kogi, Ogun, Edo and Ebony states. The issue surrounds environmental Impact assessment (EIA) for the state, this same EIA has been done through National Environmental Standards and Regulations Enforcement Agency (NESREA) an agency of the federal government by our members, why is state demanding same and shutting down cell sites if not for revenue generation. These elements and impediments to network optimization are scaring away investors and make deployment of telecommunications infrastructure for broadband penetration difficult,” he noted.

Engr. Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), said that the recessionary impact in 2017 led to uncertainty amongst their members and the industry at large, in particular the FOREX regime which was very unfavourable to operators.
“The mechanism in place to allow our members access to FOREX at the I&E rate was not well communicated by CBN and government disregarded our calls for a more enabling environment to prevail that would give our members encouragement and confidence that investments made will result in a viable Return-on-Investments (ROI) over a medium term period.

“If you dig into the numbers behind the 21 percent broadband penetration that NCC quotes, that was attained in Q4 2016, you will notice that it was on the back of 4G LTE and initial 4G LTE- deployments that were made in that year, however, there has been no further significant deployment and expansion of these ‘high speed internet networks’ alongside MNO(s) 3G networks. Our members, did not see and still do not see any viability in further bringing in hard earned money into an environment that appears hostile to them. Until Government seriously addresses the multiple taxation issue, multiple regulation and the harmonization of taxes and removal of exorbitant Right of Way charges applied to our members then there wasn’t and there still isn’t any logical or business reason for further investments to be made by them.”

“Just to emphasis the point, the INFRACO licenses were created to address the neutrality in accessibility, affordability and availability of undersea fiber into the hinterland that was the missing piece to ensure ubiquitous broadband infrastructure can be made available to the masses. What we witnessed and the records are there for all to see, is the numerous delays and slowing down of government to assist in the realization of the implementation – without government’s full buy-in there were mixed signals sent to the investment community as to exactly how this was going to be realized. So in Jan 2018 we are still yet to witness any rollout of any fiber by the two INFRACO operators that were licensed in 2015-16 and as yet the remaining five INFRACO licences are still pending – with less than 12 months to go, it’ll take a miracle to move the 21% to 30% by any measure,” he added.

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