High Cost Limits Broadband Penetration

Broadband internet is still a scare commodity despite the arrival of two major submarine fibre optic cable infinitives because it still costs some $2, 400 for one mega byte per second and that has accounted for the low penetration of the internet in the country, Nigeria CommunicationsWeek can now reveal.
Currently, operators demand for wholesale broadband internet is put at 1,705 Megabyte per second (Mbps) and it cost some $2, 400 for one Megabyte per second of broadband internet. Megabyte per second is equivalent to 125 KB per second meaning faster broadband services.
In the United States, the same megabyte per second costs $3.33 and in Japan $0.27 while in Kenya it is $600.
Due to the relatively high cost of broadband internet, Nigeria has only managed 16 per cent internet penetration because the cost of accessing internet in the country is the highest in the world.
According to Ovum, an independent telecoms analyst “the key to making broadband more affordable for emerging markets such as Nigeria will be an increase in supply and competition, which is currently modest in most markets and non existent outside the key urban areas”.
Nigeria CommunicationsWeek investigations revealed that the much talked about competition in the sector occasioned by the landing of two submarine cables — MainOne and Glo 1 may change the pricing.
That is if the challenge of the last mile optic fibre network to deliver the service to organizations and homes is sorted out immediately.
But until the two initiatives take root, Nigerians will still continue to connect the internet through Very Small Aperture Terminal (VSAT) links and Sat-3, the notoriously unreliable cable infrastructure which has been on ground for some years now.
The good news is that the sheer size of Nigeria’s population allows for much growth in the broadband market.
Investment opportunities lie in areas such as internet access infrastructure; ICT applications for government and educational institutions; Voice over Internet Protocol (VoIP) services; and developing online payment solutions.