[Document] The Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Professor Umar Garba Danbatta. Photos; Twitter/NGCOMMUNICATIONCOMM

• Although there is only N2.5m license with a period of 20 years • Danbatta claims that the corresponding funds will be used in low economically viable areas based on service provision • It is unrealistic to achieve 90% broadband population coverage by 2025 • Lagos fiber optic pipeline The project may affect the status of MainOne • InfraCos's multiple challenges – Teniola

Despite the longer term and cheaper licensing costs, the planned nationwide broadband deployment is being threatened by the slow take-off of the licensing infrastructure company (InfraCos). The cost of the InfraCo license is 2.5 million Naira, with a term of 20 years, renewable. However, there are other payments, such as management fees. Until recently, when some governors began to review rights of way (RoW) fees, cheap permits were undermined by huge RoW fees.

The InfraCo project, which has been delayed for about six years, has become a source of concern for the telecommunications industry. This is true even if broadband penetration and speed continue to decline.

The current penetration rate of 39% and the promise of snail speed by licensees make Nigeria's hopes of connecting 90% of the population slim by 2025. This may further weaken the realization of the federal government's digital economy potential. The slow take-off is due to many challenges. These include insecurity, foreign exchange (forex) turbulence, poor expected investment returns, especially in areas that are not feasible, and the licensee’s inability to obtain the 64 billion naira corresponding funds provided by the Nigerian Communications Commission (NCC) for the project ( subsidy). InfraCos is licensed by the NCC to provide layer 1 (dark fiber) services on a commercial basis, focusing on the deployment of metro fiber and transmission services, which can be used at the access point-fiber to node or neighborhood (FTTN)- Seeker. They have obtained regional permits for maximum impact. Nigeria has 114 access gaps, which shows that about 25 million people still do not have access to basic telephone services. InfraCos is expected to fill this gap and provide lines for underserved and unserved areas. The InfraCo project started in 2015 in the late management of the late Dr. Eugene Juwah, the former Executive Vice Chairman (EVC) of the NCC. Dan bata. The Guardian’s investigation revealed that although some licensees obtained their licenses about three to six years ago, after many reviews, the seventh license was issued earlier this year. Industry insiders suggested that in addition to the current seven areas, some areas could have been divided into multiple units in order to require more InfraCos. Unfortunately, 80% of licensed operators have not yet started operations. In defending the cost of obtaining the InfraCo license and tenure, Danbatta stated that the 2.5 million naira was deliberately placed on the license. He said the government does not intend to make money from the permit.

“It’s affordable, so interested entities inside and outside Nigeria can get it. This is the most important thing. The committee has several other very expensive licenses.” The license is valid for 20 years , Because we consider the service life of the optical fiber. You can investigate the service life of the fiber optic cable. Therefore, we need to allow licensees time to recover their investment in laying optical fibers. Everything in the InfraCo project is done scientifically, with due consideration for affordability. "Despite the 20-year term, analysts claim that this may affect the operator’s service efficiency, but the NCC boss stated that there is a monitoring process. He explained that the InfraCo license has clear conditions, one of which is within one year. The licensee must show evidence of deployment. He said that the licensee should not hold a license for two, five and ten years without anything. "One year is a requirement that there must be evidence of deployment. If there is no basis, enforcement actions will be taken against the licensee to review the reasons for non-compliance, and then regulatory actions may be taken. According to the new review of the InfraCo model, the evaluation will be carried out one year after the deployment order is granted," he added. Danbatta revealed at a virtual conference a month ago that InfraCos has obtained open access in six geopolitical zones and Lagos. He said that the final approval to start deployment is April 2021. The licensed InfraCos are MainOne in Lagos, Zinox Technology Limited in the southeast and Brinks Integrated Solutions Limited in the northeast. There are others. O'dua Infraco Resources Limited in the southwest region, Fleek Networks Limited in the northwest region, Raeana Consortium Limited in the south-south region, and Broadbase Communications Limited in the north-central region. Brinks Integrated Solution has a license for the northeast region and is expected to cover Adamawa, Bauchi, Borno, Gombe, Taraba and Yobe states. Fleeks Networks Limited with a Northwest license will provide services to states including Jigawa, Kaduna, Kano, Katsina, Kebbi, Sokoto and Zamfara. Zinox Technologies Limited The processed southeast will cover the states of Abia, Anambra, Eboi, Enugu, and Imo. Raeana Consortium Limited will focus on Akwa Ibom, Bayelsa and Croatia in the south-south region. Ross River State, Delta State, Edo State and River State. MainOne will cover the entire Lagos, while Broadbase Communications is expected to handle Benue, Abuja, Kogi, Kwara, Nasarawa, Niger and the plateau. But the survey results indicate that the NCC’s new map will require Broadbase Communication to focus only on Abuja’s wiring, and in the case of Lagos, Abuja has been classified as a special focus area.

MainOne has been boosted because Equinix, a California-based digital infrastructure company, yesterday acquired the leading data center and connectivity solutions provider in the United States for a price of up to 320 million U.S. dollars.

In confirming the acquisition, MainOne stated that Equinix is ​​now in a leading position and can help develop digital infrastructure investments across Africa, which is the company's long-term vision.

According to the terms of the acquisition agreement, if both parties meet all customary conditions including regulatory approvals, Mainone will be merged into Equinix before March next year. The terms also stipulate that the management team, including CEO Funke Opeke, will continue to hold their respective positions. With the exception of Lagos and the Southwest, which seem relatively peaceful, other regions continue to struggle with one form of insecurity or another. In some states, telecommunications services have been shut down to curb the activities of bandits. However, the ban has now been partially reviewed. According to some license holders, insecurity, especially kidnapping and vandalism, is a major threat to the deployment of fiber optic infrastructure in certain areas. From January to July this year, telecommunications operators recorded 16,000 outages due to various sabotages, including fiber cuts, battery theft and damage, etc. Professor Isa Pantami, Minister of Communications and Digital Economy, confirmed this.

In addition, obtaining an unapproved N64 billion subsidy as supporting funds for operators is another potential challenge affecting deployment. The 64 billion naira will provide 50% of the matching funds to match InfraCos' investment in broadband infrastructure to transfer Nigeria from the current more than 54,724 kilometers of fiber optic infrastructure to 120,000 kilometers across the country. The Guardian also collected that the volatility of the foreign exchange market, the naira is currently hovering between N520 and 1 US dollar, which has seriously affected the investment in equipment procurement. It is worth noting that the current Lagos unified optical fiber project is expected to cost approximately 82 billion naira when completed, which may hinder MainOne's InfraCo project. A very close source at MainOne confirmed that InfraCos is not yet ready to deploy due to initial challenges. He said that nothing happened to the project. He told the Guardian that 60% of licensees depend on matching funds from the federal government. . He said MainOne seems to be the only licensee who wants to invest funds before any corresponding funds. "But the situation in Lagos is very dangerous for MainOne. I doubt whether MainOne will eventually be able to deploy. The Lagos unified fiber optic pipeline project is MainOne’s efforts have paid a price. MainOne started as early as 2017, but there is no concrete progress yet.” In response to the statement that InfraCo licensees are not yet ready, a source close to Zinox said that in the entire southeast The company has made some significant progress in its plans to lay fiber optic cables before the regional launch of high-speed broadband connections. According to sources, some of the region’s governors, such as Imo State, Hope Uzodinma, and his Anambra governor Willie Obiano’s recent efforts to reduce and eliminate RoW fees, also played a big role in promoting the launch of Zinox. However, sources confirmed that other challenges have hindered the progress of the plan's rollout and caused the delays encountered so far. “The core of this is the ongoing challenge of obtaining matching funding for the project, especially considering the cost-intensive nature of the project. The above situation caused Zinox and other licensed InfraCos to feel frustrated,” the source said. However, he stated that Zinox was not intimidated by the current situation and pointed out that people are optimistic that the deadlock will be resolved soon.

"Even Zinox continues to keep in touch with other governors in the Southeast, and conducts feasibility studies and participation of key resources to prepare for the large amount of basic work required for the project." Another company asked not to mention it because of fear of sanctions. Licensing companies said that although they are working hard to implement, "but you will remember that the federal government should provide grants. Most people are waiting. Maybe they are working on it.

"The InfraCo project was supposed to provide broadband (fiber optic cable) to all 774 LGAs in the country. FG is providing subsidies to those states. The capital expenditure involved is very high. FG should increase our capital expenditures, but they have not done so yet. There is currently no clear position, which is why the InfraCo project has somehow stalled.” According to him, the country’s current insecurity, the economy and the fluctuation of the Naira against the U.S. dollar are a series of new challenges that hinder take-off. "This is reality. The InfraCo network is structured in such a way that you have to run the network on a ring architecture, which means that you not only have to go to one place and run a cable there, but also have to run it in all local government areas for a given And put them in one rig, one leads to the other, the other leads to the other, you put the equipment around everything so that in case of failure, it will automatically reroute. This is its setting Way. You will do this and run the cables on two different paths. "So, take a rebellious state, in the past, it used to be the northeast, now the northwest and north-central has become a very difficult terrain. Remember that you will go to every local government to lay cables on highways, and now some highways people are afraid to drive, so obviously the degree of insecurity will affect the deployment speed and universal coverage of each LGA. "Secondly, the materials needed for this thing are all imported. Cables, network equipment, switches, routers, etc., you know what happened to the foreign exchange, which means that if you have 1 million guilders today, it will be the same as the next day. You buy it differently, and you get these things from overseas. So, obviously, these will affect the deployment.” The Guardian also learned that Odu'a Investment will implement this through technology partners that are competitive in the fiber business. project.

Odu'a owns 20% of the project. As an investment company, Odu'a will provide some funding and work with technology partners in Lagos. It hopes to start implementation as soon as possible, but it also hopes that the NCC will provide funding to speed up the action. In response to this, Dan Bata said in a telephone conversation with The Guardian that the InfraCo licensing framework was reviewed, after which the issue was resolved and the information was communicated to all six licensors, including the central and northern regions. “A letter regarding the directive of the NCC board of directors has been sent to all InfraCos, requesting them to mobilize sites that comply with the regulatory framework and deploy broadband infrastructure. However, in the view of the board of directors, the subsidy will only be paid in the following areas. The economic feasibility of field evidence. NCC will not subsidize all areas. "The essence of the InfraCo project is to deploy broadband infrastructure in the unserved and underserved parts and the country's 774 LGAs. The subsidy is intended to incentivize the deployment of infrastructure in these two areas. Therefore, the corresponding funds (subsidies) are not exclusive. The licensee is wrong to say that they are waiting for the subsidy to be paid to them. "So far, I have not received any request from any InfraCo licensee. They have deployed in the region of their choice so that we can start the evaluation work to determine the milestones that have been reached, if it is a The field needs to pay subsidies, we will calculate the length of the fiber optic infrastructure deployed, and we will propose the amount of matching funds to be paid." InfraCos said they are waiting for the NCC to provide them with funds, and they have not even started anything. This is wrong. So this is the position. "EVC further pointed out that the InfraCo license also has a validity period, and emphasized that if at the end of the period, "we have conducted a level assessment and found that the important milestones have not been reached, then we will change them, because it has clearly stated that you cannot stay for a long time. Hold the license and don't use it to do anything. "Regarding the preparation of N64 billion counterpart funds, EVC stated that NCC has written to the government and put forward a very convincing case. "We have been instructed by FG ​​to make a memorandum to FEC. We are almost there. We will not envisage any more problems. "Affordable Internet Alliance (A4AI) national coordinator Olusola Teniola said that the InfraCo project is still active, and some licensees have finalized plans to start fiber optics in the first quarter of 2022 before the end of this year.     

Teniola said that the COVID-19 pandemic affected InfraCos, which was planned to be launched last year, due to global supply chain challenges and financial implications, impact on the global economy, and revised country risks associated with capital-intensive projects. "Currently, the challenges they face are multifaceted; usually, they are all fighting against currency risks that have occurred in the past 18 months. Secondly, some people are still negotiating RoW fees, and thirdly, according to the expected continuous review of the project It remains to be concluded with the NCC. "The issue of security challenges across the country is very real, and every infrastructure company must take this into account in its revised plan. FG is working hard to ensure that telecommunications, especially optical fiber, are fully protected under critical national infrastructure. "