By Omobayo Azeez
Experts in the Nigerian telecoms industry are mounting pressure on state governors in Nigeria to honour the sanctity of right of way (RoW) charges agreement for deployment of telecoms infrastructure across their states.
The lingering RoW issue was raised again after Kayode Fayemi, governor of Ekiti State, issued an executive order demanding that charges for laying of fibre optic cables across his state be slashed by 96 per cent to the prescribed N145 per linear metre going forward.
According to information issued on the order, Governor Fayemi signed an Executive Order reducing the Right of Way charges related to laying broadband or any other telecommunications infrastructure from N4,500 to N145 per meter, equivalent to 96 per cent reduction.
Experts now say this is a challenge to other state governors of the federation, noting that reduced taxing of the infrastructure would lead to broader coverage of the services in those states, as well as reduce cost of data access.
Particularly, Isa Pantami, the minister of communications and digital economy, has urged Lagos and other states in Nigeria, including the Federal Capital Territory (FCT) to emulate the government of Ekiti to reduce RoW charges.
Pantami said this in response to the action taken by Ekiti State government to slash the charges to hasten broadband deployment in the state.
He said the reduction in RoW charges will undoubtedly facilitate broadband penetration and, ultimately, boost the national digital economy pursuit of the federal government.
“The report of the reduction in Right of Way charges by the Ekiti State Government is highly commendable. It will undoubtedly facilitate broadband penetration in Ekiti State. I hope other states will emulate the action as earlier agreed during our meeting,” he noted.
Following the hike in charges of Right of Way by 14 state governors and their agencies, Pantami and Umar Danbatta, executive vice chairman of the Nigerian Communications Commission (NCC), had in January this year met with Kayode Fayemi, who doubles as the chairman of the Nigerian Governors Forum (NGF).
Governor Fayemi’s order reads in part: “The government of Ekiti state is desirous of providing all those living in Ekiti state, especially rural communities with access to reliable, affordable broadband connectivity.
“Broadband connectivity across Ekiti state will enhance the ability of the government of Ekiti state to increase economic prosperity; attract new businesses, enhance job growth, extend the reach of affordable, high-quality healthcare, enrich student learning with digital tools, and facilitate access to the digital marketplace,” it further stated.
Through its latest step, Ekiti has claimed the first state in Nigeria to comply with the National Executive Committee (NEC) approved Right of Way charges for broadband thus, becoming the cheapest state for broadband infrastructure investment as 1km of cable will now cost just N145,000 as against N4.5m previously.
“This Executive Order is part of the ongoing reforms by the Ease of Doing Business project inaugurated by the governor last year to improve indices that will make Ekiti State an attractive destination for national and international investments in five years,” a source in the state noted.
According to Fayemi, the decision will ensure Ekiti achieves full broadband penetration by 2021 to attract new businesses, create jobs, improve access to quality healthcare and digital education while improving internally generated revenue.
With Ekiti state government setting the pace, there are still 35 state governors yet to implement the recommended relaxation of excess charges on telecoms infrastructure.
Olusola Teniola, president of the Association of Telecommunications Companies of Nigeria (ATCON) commended Governor Fayemifor his bold step.
Teniola said over the phone on Fridaythat the Nigerian Broadband Plan of 2020 to 2025, just as the previous plan of 2013 to 2018, indicated that a normalized fee of N145 per linear metre is the fee that enables, encourages and incentivizes affordable deployment and roll out of internet to 774 local government authority spread across the expansive landmass of the country.
“So, we are encouraged that the intervention of Minister Isa Pantami has now been converted by the Ekiti State governor as an executive order in the state to ensure that this example can be used by other governors in the states to also encourage the normalization of this fee.
“Remember that N145 per linear metre translates to N145,000 per kilometre. There are still charges being applied to right of ways, but they are reasonable in terms of encouraging investment that is made in capital expenditure; that is relevant to the rolling out of the much needed fibre optic infrastructure.”
Teniola also hinted that, currently, Nigeria has a tall order to achieve 120,000 kilometres of fibre optics by 2025 as stipulated by the Nigerian Communications Commission (NCC).
He said by the advent of the Infracos, that are due to launch and deploy fibre, Ekiti state has demonstrated the incentives needed to encourage wide deployment of fibre to line-up stage and to the hinterlands.
“So, with this, it is an example that demonstrates other states like Kaduna, Oyo, Edo, Osun and Ondo, that are also thinking of following suits or that have followed suits should be encouraged to also make it an executive order, if they are not doing so already, in line with what Fayemi has done in Ekiti State,” he explained.
Teniola further explained that in effect, the 96 per cent reduction in RoW charges, will put an end to paucity of telecoms infrastructure in that state and lower cost of accessing data by subscribers.
“By reducing it by 96 per cent, which I believe other governors can also do, it will now relax and remove the inhibiters that were preventing affordable internet access.
“So, we have a situation where research from Research for Affordable Internet (A4AI) has already stated that affordability, as measured by average monthly income per household, should only represent no more than two per cent per one gigabyte (1GB) of data.
“With the move by the state government, the operators have the opportunity now to even lower the price further to ensure that Nigerians now can reach below 2 per cent and even approach one per cent of monthly income spent on 1GB of data per month.
“With this, ATCON members and Infracos will key into this, to now ensure that the much-needed fibre infrastructure is brought to Ekiti State and other states that are encouraging and incentivizing optic fire to be rolled out for the development of the citizen,” Teniola said.
Similarly, industry watchers have noted that the need to encourage convenient deployment of broadband infrastructure is pressing on governors to create several streams of revenue for them as proceeds from oil continues to dwindle, leading to slim allocations from the federal government.
“The thing we also need to realize is that COVID-19 has changed the new normal. It is also been highlighted that any state that does not transform itself from analogue to digital will realize that there is not any ability to generate new additional income known as IGR.
“It is very well known that every 10 per cent increase in broadband penetration leads to GDP growth of typically 1.38 per cent. It also leads to increased productivity, which comes from increased employment, increased taxes being rendered to those states.
“We believe that the current economic situation that we find ourselves in will mean that governors must try and key into initiatives that that will bring in additional revenue that is not just reliant on proceeds being allocated to those states on monthly basis,” one analyst said.