Telecom industry stakeholders in recent times have expressed worry over the slow pace at which Nigeria is approaching digital inclusion, an imperative in the digital era, which is solely dependent on Internet connectivity. Justice Godfrey Okamgba writes on the issues, bottlenecks and the approaches adopted by different players in the sector to salvage the situation.
Jimmy Nweke, a graduate of Economics visited his hometown for a wedding ceremony. Before Jimmy arrived, he got invitation via email for an interview from one of the biggest financial institutions. Jimmy was expected to confirm if he would be available for the interview in the next 24 hours. He couldn’t do that immediately and it became imperative for him to seek for Internet access in one of the closest cities.
It took time and a bit of stress for Jimmy to respond to the bank due to the lingering lack of access to the Internet, the backbone for digital inclusiveness. Put simply, digital inclusion means having access to communication via the Internet.
The benefits of being digitally inclusive are immeasurable; communication barriers are eliminated for improved economic development just as it reshapes the society by making knowledge available to the citizens amongst others.
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Today, the issue of connectivity may have been slightly different in some part of the country, especially in the urban areas. People in the same shoes with Jimmy will not struggle to respond to emails if they have fibre optic cables deployed in their various localities.
This is one of the reasons the Nigerian government tries year in year out to ensure that it joins other comity of nations that are digitally inclusive with different initiatives been rolled out. However, most of the efforts are yet to yield the in- tended results.
State of inclusiveness
At the moment, it is only the urban areas that are enjoying the benefits of the Internet, bringing to fore the urgent need to open up the hinterlands. Most Nigerians who reside in the hinterlands are yet to be captured in the web of digital inclusiveness.
In the 2018 Digital Competitiveness Report Nigeria was missing in the global ranking while South Africa was the only African country, ranking 49th out of 63 economies. The USA, Singapore and Sweden were the top three ranking economies.
Another report – the Inclusive Internet Index: Measuring Success 2018 – released earlier this year by the Economist Intelligence Unit indicates that Nigeria ranked 4th in Africa but occupies the 56th position out of 86 countries globally.
In fact, Nigeria has always lagged behind countries like South Korea, or Singapore, often considered as it peers in terms of technology development cum connectivity. These countries have accessible broad- band having put the necessary infrastructure in place.
The country’s connectivity is still at 22 percent with hope that it could hit 30 percent before the end of 2018,
according to the Nigerian Communications Commission (NCC). The number of Internet subscribers as at May when NCC released its last figures shows that Nigeria has about 103 million Internet users.
Till date, the NCC has only given license to four infracos out of seven needed to lay fibre optic cable and other infrastructure needed to cover the entire landscape in Nigeria. The move to grant licenses to infracos through an open access model be- came imperative after Nigeria rolled out the National Broadband Plan in 2013 in order to fill the gap caused by lack of infrastructure.
Zinox group, which was the last infraco to receive license will cover the southeast region, Brinks Integrated Solutions for Northeast, IHS to cover North Central and Mainone covering Lagos. NCC is yet to grant the remaining three licenses. These infracos may probably have to de- ploy up to 120, 000 kilometres of fibre, which is currently needed to cover Nigeria.
In all of these, industry stakeholders believe that Nigeria’s slow pace in terms of connectivity indicates that much work still need to be done to achieve digital inclusiveness.
Digital inclusiveness bottlenecks
The challenges impeding the growth of digital inclusiveness over the years spread across multiple taxes, delay in rolling out infrastructure, and the right of way.
The grant of right of way to mobile operators has trailed for many years with many back and forth discus- sions and often looks like an insurmountable task for the government, as this already slowed down the progress of connectivity in the long run impeding digital inclusiveness in the country.
This challenge is directly responsible for the inability of telecom operators to deploy the robust infrastructure required to deepen the current meagre penetration level. With seven infracos needed to lay fibre and solve connectivity issue in the country, the NCC has only granted four licenses to the infracos.
According to Aderoumu, some companies including MainOne have brought submarine into the country with huge bandwidth capacity and are yet to be effectively utilized. The reason, according to him, stems from the task of moving the band- width capacities to other part of the country and this is stalled by the right of way challenges.
Similarly, multiple taxes remain an issue as the telecom industry annually contributes N450 billion in form of taxes to Nigeria’s economy. According to the Association of Telecommunications Companies of Nigeria (ATCON), there are currently 38 taxes being paid by the telecom industry as against 10 taxes. These taxes range from the right of way, annual operating levy, corporation tax, custom duty and stamp duty.
Another ugly and subtle develop- ment that could be hindering digital inclusiveness is the interconnectiv- ity debt by the telecom industry. Umar Danbatta, the executive vice chairman, NCC in one of the meet- ings with stakeholders disclosed that that the interconnectivity debts stands at N165 billion, a source of worry to the Commission.
The NCC opined that a pragmatic approach was needed to mitigate the industry’s interconnectivity debts and had sought for the assistance from ATCON to approach the situation considering the distractions the debt was causing to the Com- mission.
Ongoing efforts and prospects
Last week in Abuja, Danbatta told stakeholders in an engagement forum that efforts were made by the NCC, in collaboration with some states, such as Ogun, Kano and Kaduna to bridge the gap between the served and the under-served of over 40 million Nigerians.
At that same forum, Sunday Dare, the NCC’s executive commissioner on stakeholder management, noted that the Commission has developed an engagement template to deal with the national network was not functioning at optimal levels as a result of certain factors.
Some of the factors such as frequent interruptions, security of infrastructure, power issues, high cost of approvals and slow permit- ting processes were affecting the licensees as they were finding it difficult to meet the prescribed rollout and quality of service benchmarks.
In another development, Yemi Osinbajo, Nigeria vice president, had made efforts to ensure that the state governors and the Nigerian Communications Commission (NCC) discussed the grant of right of way, one of the biggest challenges in the telecom industry, and how to build additional 18,000 kilometres of fibre optic cable to the national backbone powered through four operators. These operators include MainOne, IHS Nigeria Limited, Broadbased and Phase 3 Telecom.
These efforts ride on a move to leapfrog connectivity in the country and Olushola Teniola, president, Association of Telecommunication Companies of Nigeria (ATCON), believes its all about promoting greater awareness about the states’ technology and broadband investments potentials.
“This initiative will help identify viable technology investment projects for both the private and public sectors; increase government and private investments and spending in broadband infrastructure.”
Additionally, with the 2018 bud- get approved last month, the tele- com industry through the ministry of communications still has in its coffers some money to spend, although analysts believe that the sum allotted to the sector is paltry. The sector got a total allocation of N19,260,740,637 ($53.7m). However, the breakdown of the budget show that N100 million is meant for “National Broadband Penetration”.
Suggestions and recommendations
Stakeholders in the telecom industry are of the view that the federal government should look into the fundamental areas it could invest to achieve the target goal of inclusion especially digital literacy. Digital inclusion they say, will happen when Nigerians both in urban and rural areas all digitally literate as this would go a long way in developing the country.
Aderoumu advised that as Nigeria invests in technology, it is imperative that the existing divides in society are not widened as the sustainability of efforts requires inclusion.
“The excluded and vulnerable rural populace needs to be part of the digital revolution for Nigeria to fulfill its immense potential. For example, can we really have e-government if
the majority of citizens lack access to digital infrastructure and fall short in terms of required digital skills?” Aderoumu asked.
At the 27th National Conference of the society held last week at the University of Ibadan, Oyo State; Aderoumu, advocated for new policy that would should cover ICT infrastructure, broadband Internet, fibre optic communication and local content prioritization. The policy according to him will bridge digital divide, grant access, application and ensure affordability.
Access to him, has to do with speed and being available to all members of society such that people who cannot afford the digital technologies can do so for free in public places.
“Application implies that digital technologies and services are usable by people with varying levels of digital skills and abilities, including people with disabilities. For overall sustainable national development, nobody should be left behind.”
Be it as it may, for progress to be made in the sector and improve digital inclusiveness, the state governors and other relevant stakeholders will have to speed up implementation in the removing multiple taxes in various states where the telecom operators run their businesses.
ATCON’s Teniola recently called for harmonisation of all taxes in the telecom industry by the federal ministry of finance as this would ensure a seamless process that eliminates the chances of paying many taxes.
“If that is done, the state and local governments will stop asking for money that is not even paid at the federal level.
Likewise, local government should go to the state to request for its share of taxes paid by the industry,” he said.
The multiplicity of tax is not limited to the telecom sector alone, there are other sectors of the economy that feel the same heat from the Nigerian government.
Taiwo Oyedele, the head of tax and corporate advisory services at PwC Nigeria, has a different dimension on how the issues of multiple taxes should be tackled as this would also be beneficial to the telcos.
He specifically recommended that the government should look at the constitution and make key amendment., as there was no need for tax incentives for people to do businesses.
In his words: “There is need to amend the constitution to ensure coordination among the three tiers of government and their agencies. The multiplicity of government agencies with the same work func- tion was becoming worrisome.
Bola Agboola, the managing director, Ximalog Global Solution, an ICT company, is of the opinion that there is need for the government at all levels to offer incentives to operators that can lay fibre optic cables of broadband in the country, as this would allow them to expand their services and increase investment in the sector.
“There is also the need to overcome infrastructure and policy challenges that inhibit growth in the telecom sector or overcome the infrastructure challenge by using satellites networks, cables, digital subscriber lines etc.,” Agboola said.
If all the beautiful initiatives are to be achieved, the industry needs more prioritization, dedication and speedy implementation. That is the way to get majority of Nigerians connected to the current wave of digitalization in the world.