Of hiked RoW and digital economy drive

By Omobayo Azeez

The move to accelerate digital economy drive in Nigeria is hinged on such factors as seamless deployment of infrastructure for broadband access across the country. With recent revelation of how some states have inflated right of way (RoW) charges however, the broadband access desired to drive the country’s digital economy may further be stifled. OMOBAYO AZEEZ reports.

In November 2019, the World Bank scored Nigeria low on digital economy drive when it sounded a warning note that the world’s most populous black nation could be left behind because of its lack of foundational infrastructure to drive digital economy agenda.

“Nigeria is currently capturing only a fraction of this growth and needs to strategically invest in the foundational elements of its digital economy to keep pace,” the World Bank has counseled in its Nigeria Digital Economy Diagnostic Report.

Digital economy is a growth platform for the entire Nigerian economy in which industries, old and new, are moving online, and finding new ways to do business in a way that impacts positively on the entire economy.

In pursuit of this agenda, the federal government had realized the need for all hands to be on deck, and went as far as rechristening the federal ministry of communication as ministry of communications and digital economy. This happened in October, 2019.

Under the leadership of minister Ali Isa Pantami, the ministry, which now has the new mandate of fostering a policy environment that can facilitate digital economic growth, immediately identifies that the dream of a smart Nigeria is only attainable when broadband connectivity in the country is deepened, accessible and affordable, and that critical to this is the involvement of infrastructural companies (Infracos) as key partners in the process.

Speaking recently while inaugurating a committee on broadband penetration target, Pantami harped on the importance of increasing investment in fixed broadband penetration which ride on infrastructures deployed by the Infracos.

According to him,“Digital economy today is strategically dominating the world economy. According to Oxford Economics, the value of digital economy today is 11.5 trillion USD which is approximately 16 per cent of the world economy.

“According to world economic forum, by 2022, 60 per cent of the world economy will be digitalised. By 2030, almost 85 per cent of the world economy is going to be a digital economy because surely, digital economy is dominating the world.

“We cannot promote digital economy without broadband plan at our disposal. That is why we feel it is necessary to have national broadband plan after getting our national digital economic policy in place,” he said.

He added that the ministry had developed a framework to facilitate the deployment of broadband infrastructure across the country through the licensing of Infrastructure Companies (Infracos).

The Infraco Project

Six years ago, the Nigerian Communications Commission (NCC) started licensing about six infrastructure companies (Infracos) to roll out broadband networks over a period of four years across all 774 Local Government areas in the country. This was briefly after the commercial rollout of 4G, and the plan rode conveniently on the back of NCC’s adoption of Open Access Model (OAM) and Optimum Spectrum Utilization to address the fixed and wireless broadband infrastructure deficits respectively.

However, the implementation of the initiative would be procedural based on a deployment strategy that put first economic viable areas to, one the one hand, meet the data consumption need of the urban areas, and on the other, enable investors to recoup returns on their investment; and from there, spread to other parts of the country.

According to Umaru Danbatta, the executive vice chairman of the NCC, the InfraCos will deploy at least one fibre Point of Access (PoA) in every LGA across the country and each fibre PoA will have a capacity of 10 Gigabit per second (Gbps).

To facilitate doing this however, the NCC has licensed Infraco Nigeria Limited to deploy infrastraucture in Lagos; Brinks Integrated Solution Limited for the North-East; Fleek Networks Nigeria Limited in the North-West; Zinox Technologies Limited in the South-East; Raeanna Consortium Limited in the South-South and O’odua Infraco Resource Limited in the South-West.

Danbatta had said that “No doubt, we have infrastructure gap/deficit and to bridge this gap, the commission has licensed six INFRACOs, one each in the six geo-political zones of the country with one specifically issued for Lagos zone because of its commercial centrality to the country. So far, six of the licences have been issued with the seventh one for the North-Central region being processed by the commission.”

Unending Row around RoW charges

Basically, Right of Way (RoW) refers to a legal right of passage over another’s property. In the telecoms parlance, this is the legal approval that the Infracos would have to obtain from various state governments in the geo-political zones assigned to them before they can commence deployment of broadband infrastructure.

This permission is not expected to come pro bono from the state government; however the advocacy, particularly by the federal government agencies and the Infracos had always been that the amount charged as RoW by states be affordable.

The amount originally fixed by the federal government for laying of fiber optic cables along federal government highways is N145 per linear meter. However, bringing state governments to comply with this has remained a hard nut to crack as many of the states charge ridiculously high prices.

Although, most of the states in the country have never complied with the N145 benchmark, there had been no serious controversy over their charges of between N300 and N500 per linear metre.

As reports emerged recently however that some 14 states governments have hiked RoW by over 1,200 per cent to charge as high as N3,000 and N6,000 per linear metre, this called for urgent attention to bring the process under control in the interest of the country’s digital economy agenda.

The states, according to report, include Lagos, Kano, Anambra, Ondo, Cross River, Kogi, Osun, Kaduna, Enugu, Adamawa, Ebonyi, Imo, Kebbi and Gombe.

Harmonising FG, state’s RoW charges

Efforts have been geared towards harmonizing state charges on RoW and that of the federal government at N145 but all to no avail. For instance, the communication minister recently said that he had written to state governments to comply with the N145 per linear metre as contained in the Nigerian National Broadband Plan (2013-2018).

Similarly, the NCC has had a record of multiple engagements with the state governors’ forum on the same matter and other related ones. For instance, on June 27, 2018, the NCC made a presentation to Nigerian Governors Forum (NGF) on Broadband Deployment in Nigeria.

In the presentation, the Commission highlighted the encumbering challenges in the deployment of Broadband Infrastructure in Nigeria, which amongst others include; high RoW charges, multiple regulation & and taxation, and delay in obtaining site acquisition permits.

Therefore, the Commission appealed to the NGF that its prayers , which the National Executive Council (NEC) had earlier approved, especially on the harmonisation of N145  per metre RoW charges, be given maximum priority it deserves to help mitigate the broadband Infrastructure challenges, so as to achieve the much needed ICT infrastructure for social and economic transformation of the country.

Despite all these efforts and many others that have followed, the state governments have remained adamant.

Operators kick, call for dialogue

Stakeholders in the industry have knocked the states found guilty of charging high on RoW. While the state governments must generate revenue to run the affairs of their states, stakeholders berate their heavy tax on investment.

They described the actions of the states as inimical to efforts being made by the federal government to establish an e-regime in the country, adding that imposing heavy tax on investment can send wrong signals to the investing community.

According to Gbenga Adebayo, the national president of Association of Licensed Telecommunications Operators of Nigeria (ALTON), if care is not taken, the increase in RoW is capable of derailing the Digital Economy agenda of the Federal Government, adding that it will lead to negative sentiments among investors, especially, those involved in the deployment of fibre optic cables across the country.

Association of Telecommunication Companies of Nigeria (ATCON) has however urged state governments to embrace dialogue as means to find lasting solutions to the trending issue of Right of Way Charges.

Responding to the burning issue, Olusola Teniola, president of the association said, “The reality on ground is for continued dialogue with all governors that the development of our country will only happen when we balance the immediate need for revenue generation versus building and preparing a nation for the future which is digital.”

Last line

Broadband penetration in a country contributes significantly to its gross domestic product (GDP) the World Bank had, in a report, correlated 1-2 per cent growth in GDP with 10 per cent penetration of broadband. It is instructive therefore that as Nigeria pursues more pervasive broadband access, all hands must be on deck for delayed gratification rather than frustrating the efforts by immediate revenue needs by some states.