Funding Gap in Broadband Deployment

For many people ‘broadband’ implies nothing more than a connection to the Internet.

Well, broadband is another name for high speed internet.  It is exactly what it sounds like: internet access that has a fast connection speed.

Providing an abundance of Internet access would spark a wave of innovation.

High speed internet enables businesses, especially small ones, to remain competitive by reducing transaction costs and allows consumers to benefit from many advanced online services that improve their quality of life.

Apart from Lagos and other major cities; the private sector is reluctant to invest in the deployment of broadband networks because infrastructure deployment outside urban/high income areas by private sector operators or resulting from public-private co-operation, are perceived as higher risk transactions.

The matter is not helped by longer pay back periods; Nigeria’s notoriously unreliable public power supply; lack of funds; among others.

The key to broadband living up to its potential is the ability to find an appropriate financing model.

Finding the financing model therefore requires a clear understanding of the industry’s evolution and the interplay of telecom network transformation, government oversight and private investment.

Whatever the situation, the obvious is that over the next years, huge investments are needed to ensure the development of high speed broadband internet in all regions of country.

The Presidential Committee on Broadband Strategy and Roadmap has done a very good in highlighting several industry issues limiting the penetration of broadband for a 170-million-strong population.

But driving universal broadband access requires more than just government intervention; it must have a lace of integrated strategies for developing and financing telecommunications services.

Such strategies should be used alongside national funding instruments to compensate for the lack of private sector financing.

And before adopting public investments in rolling out broadband networks, the federal government should first look at regulatory tool that might be able to increase entry and competition and hence maximize what the market can deliver on its own, including in unserved and underserved areas.