‘InfraCo can help Nigeria speedily overcome its infrastructure challenges’

Kazeem Oladepo, MainOne’s general counsel, and Oluwagbenga Osinoiki, acting project manager – InfraCo, in an interview with Frank Uzuegbunam, talked about the NCC-instituted Infrastructure Company (InfraCo); implementation status and current challenges; its role in achieving the national broadband plan and why InfraCo is important for Nigeria’s economy. Excerpts:

 

What is InfraCo?

InfraCo means Infrastructure Company, and it is one of the initiatives of the telecoms regulator, Nigerian Communications Commission (NCC), to actualise the National Broadband Plan. Under the plan, the NCC is required to license new classes of telecom operators to fill critical infrastructure gaps and enable broadband services on a wholesale basis i.e. wholesale wireless and metro fibre companies.

 

Specifically, optic fibre InfraCos are to be licensed for six geopolitical zones of the country and Lagos, to enable retail operators leverage shared infrastructure to expand their reach and lower the cost of broadband services. This model was developed by the NCC in partnership with consultants and significant industry consultation and has been found to be an appropriate model for optic fibre backbone infrastructure development across various parts of Nigeria to bridge current gaps.

 

Each InfraCo is required to deploy large capacity wholesale networks under strict performance criteria, which would be made available on an open-access basis to retail operators who want to deliver fast, reliable broadband services to household and businesses in their coverage area. Retail operators who require infrastructure in any of the zones will have the benefit of utilising InfraCo infrastructure on a shared basis, at competitive prices regulated by the government.

 

This model has worked across the world as it instils infrastructure sharing, accelerates investment in infrastructure beyond the requirements of any singular retail operator and enhances competition. In the United Kingdom, BT’s “InfraCo” subsidiary, OpenReach is a successful example of this model as it continues to improve UK’s digital infrastructure under supervision of Ofcom, the Telecom Regulator.

A consortium led by MainOne, InfraCo Nigeria Limited, won the bid for Lagos InfraCo and is getting ready to roll out services before the end of this year. Members of the consortium include VDT Communications, Swift Networks Limited and United Capital Limited. IHS won the bid for the north central zone.

Who Issues the InfraCo Licence?

As the national regulator, the Nigerian Communications Commission (NCC), under the mandate of the Federal Ministry of Communications, issues licenses for telecom operators in Nigeria.

 

What does the InfraCo licence cover?

The license covers the deployment of metropolitan fibre-optic infrastructure within the assigned territory on an open access, non-discriminatory and price-regulated basis. As outlined by the regulator’s ‘Open Access Next Generation Fibre Optics Broadband Network paper’, the InfraCos will be responsible for providing wholesale broadband network services to retail telecom service providers.

The InfraCo model is seen as a strategic means to accelerate the deployment of optic fibre backbone transmission infrastructure network nationwide and will contribute significantly to increasing broadband penetration, delivering cost effective and reliable broadband services to households and businesses and facilitate the development of Nigeria’s digital economy.  It is also expected to help address the right of way challenges currently faced by operators in the deployment of fibre optic infrastructure in towns and cities.

What is the process of getting a license?

The Nigerian Communications Commission (NCC) initiates the process by announcing the bid, via advertorial in national dailies. Information and Communications Technology companies who have the capacity and interest in building fibre infrastructure then submit their bids including the business model with provision for open-access and low cost services to the Commission, who work out the evaluation modalities and announce the winner. In the instance of the earlier bids, the NCC worked with KPMG as adviser to manage the bid process and select the winning bid. The process is quite rigorous and requires significant financial commitment to meet the bid obligations.

 

What is the National Broadband Plan?

In its thrust to address the broadband challenges in Nigeria, the Government, under the auspices of the Presidential Committee on Broadband, articulated an ambitious plan- the Nigerian National Broadband Plan- to facilitate the provision of affordable and reliable access to broadband to all Nigerian citizens.

The key objectives of the Nigerian National Broadband Plan are to promote pervasive broadband deployment; increase broadband adoption and usage; and ensure availability of broadband services at affordable prices.

The Broadband Commission of the International Telecommunications Union (ITU) has encouraged countries to establish such national broadband plans in order to drive national competitiveness and drive increased use of broadband enabled applications and services. Globally, 134 national plans were in force by mid-2013 and it was recognised in studies that countries with such plans out-performed those taking a more laissez-faire approach to broadband development.

The plans have taken different forms (legislation, policy frameworks, government strategy and/or regulations) but focused largely on infrastructure required to enable broadband services. Effective plans have been found to be comprehensive, clearly identifying priorities, and have specified frameworks for partnership between government, industry and other stakeholders in a consultative, participatory approach.

The Nigerian National Broadband plan is anchored on the rapid rollout of wireless and wireline infrastructure and provides incentives to encourage a national 3G wireless coverage to at least 80% of population, and broadband connections to 30% of the population by 2018.

 

What are the Roles of NCC and state governments?

The Nigerian Communications Commission is the independent regulatory authority for the telecommunications industry in Nigeria. The Commission is responsible for creating an enabling environment for competition among operators in the industry as well as ensuring the provision of qualitative and efficient telecommunications services throughout the country. Federal and State Governments at various levels also have a critical role to play in the drive to deploy pervasive broadband infrastructure across the nation. Bottlenecks that could be inadvertently introduced by government include obstructing, delaying or denying Right of Way requests, or the imposition of arbitrary and multiple taxes. Government can partner with the InfraCos to reduce RoW costs and harmonise taxation to accelerate the rate of investment in building out new infrastructure.

 

Why is this important or beneficial for Nigeria’s economy?

It has been empirically proven that every 10% increase in broadband penetration in developing countries results in a commensurate increase of 1.3% in GDP. We live in a global village where ICT has a direct impact on a nation’s competitiveness and its ability to improve the economic well-being of her people and compete globally.

 

Broadband has been globally acknowledged as the foundation for transformation to a knowledge-based economy. It has the potential of enabling entire new industries and introducing significant efficiencies into education delivery, health care provision, energy management, ensuring public safety, government/citizen interaction, and the overall organisation and dissemination of knowledge.

Nigeria’s broadband roadmap and strategy shares the global optimism concerning the opportunity for broadband to contribute to socioeconomic advancement and competitiveness of nations.

 

Will InfraCo not create a monopoly for metro fibre in Nigeria?

InfraCos would accelerate the rollout and deployment of a nationwide metropolitan and backbone fibre network on an open access, non-discriminatory, price-regulated basis. The prescribed corporate structure of the InfraCo has been designed to ensure that it does not become or exhibit tendencies of an infrastructure monopoly in the industry. The NCC had earlier allayed fears of the emergence of monopolies in the telecoms market and is ensuring that no single operator can control any InfraCo. As the regulator, the Commission will also directly regulate prices and encourage infrastructure sharing, among all operators. Already, we have similar shared infrastructure models being operated by tower companies now providing most of the access infrastructure for the mobile telephone companies.

 

What is the state of readiness of MainOne’s InfraCo Consortium?

The Lagos InfraCo License document was recently released to InfraCo Nigeria in the month of July 2016 with an effective date of July 1, 2016.   Our Consortium members had been engaging prior to issuance of the license on the critical path to deployment of the required infrastructure in accordance with the bid undertakings. We have made significant progress with Lagos State government and its broadband infrastructure management company (Ibile Broadband) to harmonise the InfraCo fibre build with Lagos State’s Smart-City Project. Pending issues include the completion of the Commercial Agreement between the InfraCo Nigeria Consortium and the NCC, and also finalisation of our agreements and permits with Lagos State Government/Ibile Broadband. The commercial agreement with the NCC would regulate the build and operation of the broadband network and infrastructure, including specifying terms for the subsidy payment.

 

Our plan is to break-ground during Quarter 4, 2016.  We have made significant progress in terms of planning (corporate, financial and technical) to operationalise InfraCo Nigeria Limited and have commenced the ordering of some of the long-lead items such as fibre optic cable, which was recently delivered to our warehouse in Lagos. We will be ready to start deployment within 30 days of execution of the Commercial Agreement with the NCC, hopefully, during the month of September.

 

Frank Uzuegbunam