FG stakes N126.7bn loan on connecting 19 northern states to telecoms services

By Omobayo Azeez

The Federal Government of Nigeria is taking a sum of N126.7 billion credit from the China EXIM-Bank to deepen penetration of telecoms service facilities in the 19 states in the northern region of the country.

The money is meant to facilitate the Phase 2 of the National Information Communications Technology Infrastructure Backbone, (NICTIB II) aimed at providing rural connectivity in the country.

The focus on the north, according to some observers, follows the intelligence that the region hosts the highest number of poor people in the country and has also been contending with poor connectivity.

This, operators say, is ascribed to the huge cost of rolling out service relative to poor average revenue per user (ARPU) in the region, which operators do not see as making a good business case.

According to Satya Mekala, the director of World Telecom Labs, a mobile infrastructure provider, even with the involvement and interest of titans like Facebook and Google, connecting the unconnected is as big a challenge as it has always been.

“The problems remain the same: capital-intensive infrastructure and low ARPUs make many rural deployments commercially unviable,” he said.

He however, noted that the Nigeria rural communities can be connected profitably, on the back of people’s excitement to use the service, and thus steer interest.

“Most people would be happy with a 2G network for phone calls only. 44 per cent of the Nigerian population does not use the telephone and, to be honest, outside Lagos there is no good connectivity.

“2G networks are the fastest and cheapest way to provide the voice connectivity that so many people want and need so they can speak with their loved ones who have moved away,” Mekala said.

He further explained that to build sustainable voice and data networks in Nigeria, “we would like to see the Nigerian Communication Commission (NCC) concentrate on building open wholesale networks– and to allow open access to all existing Government-owned or sponsored telecom infrastructure.

“The removal of the capital expenditure (CAPEX) cost of building a rural network will enable NCC to pressure previously reluctant operators to start offering services in these areas.

“Indeed, pressure might not even be needed. For-profit telcos are naturally competitive beasts and will not want to see their rivals scooping up rural customers. Pricing and customer service will, as ever, be the key differentiators,” he said.

Mekala’s explanation further justified the Nigerian government’s commencement of the NICTIB II, which, according to Galaxy Backbone, the state-owned telecoms infrastructure agency executing the project, will further deepen telecoms coverage and give impetus to realization of National Broadband Plan (2020-2025) targets.

Checks by Business A.M. indicate that the 19 northern states collectively have 55.286 million active internet connections as at Q1, 2020, according to the latest telecoms industry report by the National Bureau of Statistics.

This figure represents 40.59 per cent of total active internet connections of 136.203 million in the country, and is concentrated in major cities like Kano, Kaduna and Niger.

This is despite the fact that the region has the highest number of states (19) and largest population of 90 million people.

Speaking on the NICTIB II project, Mohammed Abubakar, the managing director, Galaxy Backbone (GBB) explained that the internet fibre network will move from Abuja to Plateau, Gombe, Kano and the rest of north-western Nigeria.

Abubakar said that the critical national infrastructure deployed through Galaxy Backbone, the government ICT services provider, connects all FGN secretariat complexes in the FCT and other parts of the country.

“Now, we have linked Lagos to Benin-Onitsha-Owerri-PH-Calabar and Onitsha to Enugu-Makurdi-Akwanga-FCT. This is in addition to providing metro fibre in major cities across the country.

“It is expected to bring economic benefits in line with the 4th Industrial Revolution. In two to three years, we hope that the hinterland will be covered, including Gombe State,” he said.

The project, he explained, interconnects with undersea fibre cables, provides an e-Government connectivity backbone and broadband Internet.