RoW: State Govts Demand N600Bn from Telcos

Telecommunications companies licensed to deploy broadband infrastructure across the country will have to cough out about N600 billion in Right of Way (RoW) charges to the 36 states of the federation.

New Telegraph reported that the fee may be the next big hurdle to cross for Nigeria to achieve ubiquitous broadband.

This amount is calculated based on the recent declaration that Nigeria requires 120,000 kilometres of fibre to achieve nationwide broadband coverage and an average of N5,000 per meter of fibre being charged by states.

This sum is, however, conservative considering the fact that some states, according to the Nigerian Communications Commission (NCC), are charging as high as N25,000 per meter of fibre.

The charges are also in defiance of a 2013 National Economic Council (NEC) recommendation of N145 per meter fee for Right of Way across states.

This recommendation was made as part of solutions towards ensuring that Nigeria achieves the 30 per cent penetration target set out in the National Broadband Plan.

According to a World Bank study, a 10 per cent point increase in fixed broadband penetration would increase Gross Domestic Product (GDP) growth by 1.21 per cent in developed economies and 1.38 per cent in developing ones. With this realisation, Nigeria came up with a broadband plan to ensure the country benefits from the global digital economy, but the plan is being dogged by myriads of challenges among which RoW is prominent.

Speaking on the current challenge with RoW, Prof. Umar Danbatta, executive vice chairman, NCC said states and in some instances, local governments, constitute stumbling blocks to fast deployment of broadband infrastructure.

According him, all Nigerian citizens are supposed to have access to broadband services, no matter their position in the society and no matter where they are, but efforts to achieve that are being frustrated by high RoW fees.

“It is unbelievable that in a country where we have a NEC document on RoW, which specifies what should be charged for a meter length of fibre deployment as N145 only, telecommunications companies are subjected to charges between N5,000, N6,000 and N25,000 by states and local government. This is really draining the efforts we are making to deploy more infrastructures,” he lamented.

Danbatta noted that the NEC recommendation, which covers the period between 2013 and 2018 is not being respected by states and pointed out that if the states had realised that the recommended charge is not in tune with the current economic realities, they should have called for a review, which would ensure that another considerable uniform fee is fixed, rather than charging indiscriminately. According to the EVC, Nigeria currently has about 38,000 kilometres of fibre, whereas, the country requires 120,000 kilometres to achieve pervasive broadband nationwide.

“One of the ways to improve quality of service is to build capacity by deploying more infrastructures, but with the challenge of RoW, service quality is affected. This is a nationwide problem and we are still talking to the states highlighting the importance of pervasive telecommunications,” he said.

Aside the Right of Way charges, telecommunications companies in the country have also been lamenting multiple taxation being introduced by states. As at the last count, the number of taxes telcos are paying across states have risen to 38.

Also speaking, Mr Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON) said the country would not be able to achieve its 30 per cent broadband target with the current RoW charges across the country. “Untill the states realise the economic importance of telecommunications infrastructure and change their focus on IGR growth to economic development, we will not move forward,” he said.

Besides, Teniola said ATCON as an industry association would also continue to advocate and sensitise governments on the need to remove the RoW and multiple taxation barriers.

As part of its efforts to fast-track deployment of broadband infrastructure, , the Commission had, two years ago, licensed two infrastructure companies (InfraCos), MainOne and IHS to deploy broadband infrastructure in Lagos and North Central respectively.

However, due to the Right of Way challenge, neither of them has been able to roll out as expected. While the regulator has just licensed another four companies to cover other regions, IHS is said to have returned its own license.