Infracos Scramble For Fund As Fibre Deployment Deadline Looms
Infrastructure Companies licensed by the Nigerian Communications Commission are making moves to raise capital for the implementation of the nationwide deployment of fibre optic infrastructure.
The telecom infrastructure development project, developed as a public private partnership model, will be subsidised by the Federal Government when the infracos have successfully laid some kilometres of fibre optics, specified by the NCC.
The regulator said the six licensed infrastructure service providers had within six months to start building broadband infrastructure and warned that failure would lead to the withdrawal of their licences.
It was gathered that the companies were finding it difficult to secure funding from international investors due to insecurity and inconsistent policy in the country.
Some of the operators said they had not been able to build a good business case for the project to attract funding due to poor demand for Internet services in certain areas of the country.
Speaking with our correspondent, the Managing Director, Broadband Connectivity Network, Ibrahim Dikko, said though there were challenges with commencing work on the network infrastructure project as the demand for data services was low in certain areas outside Lagos State.
Dikko, whose company was licensed for North West region, noted that there was no guarantee that the infrastructure would be used after deployment as there were no policies mandating government agencies to utilise the digital infrastructure.
“Is there a policy that will ensure all schools are connected and government agencies are digitised? What if I take the fibre to the Local Government Areas and there is not digital uptake? Our biggest client is the government. If we move away from Lagos and move to other states, there are few industries. The willingness to fund will ultimately rest on a variety of factors- the business case, Right of Way and insecurity,” he added.
The Head, Corporate communications, Zinox Technologies, Gideon Ayogu, pointed out that the telecom infrastructure project would require the importation of equipment that had been included in the CBN’s forex exclusion list.
He called on the government to review the policy, relax the restriction on some of the critical equipment which the infracos would need.
On his part, the President, Association of Telecommunication Companies of Nigeria, Mr Olusola Teniola, explained that operators were finding it difficult to attract funding due to the concerns ranging from vandalism of telecom infrastructure, arbitrary taxes to uncertain government policy.
“It is difficult to attract funding to telecom projects due to the perception of the international community regarding Nigeria’s business climate. Factors limiting access to finance are insecurity, uncertain government policies such as RoW, insecurity of infrastructure and multiple taxes,” he added.
According to him, the predominant concern in the North Eastern region of the country is vandalism of telecom infrastructure due to the ongoing insurgency in the region.
He said, “Telecom investment is not attractive due to currency risk as telecom operators are not given a favourable window for foreign exchange.
In the South-East and South-West geopolitical zones, Teniola stated that Right of Way charges of over N500 per linear metres would not make the project profitable for operators.
He asked the Presidency to prevail on state governments to charge N145 per linear metre, which was obtainable at the Federal level as the right of way charges.
