Operators say funding, others hamper ICT development in Nigeria

Chief Executive Officer of Medallion, Ikechukwu Nnamani

Telecommunications operators in the country have said that funding is the biggest challenge they face in their efforts to ensure increased access and affordability of telecommunications services in the country.

According to them, right funding for the development of transmission infrastructure which is necessary for increased access and affordability of telecom services is lacking in the country.

Ikechukwu Nnamani, chief executive officer, Medallon Communications, a data centre operator, told Nigeria CommunicationsWeek that the biggest challenge in information and communications technology today is right funding.

“It has been identified that cost of leasing transmission infrastructure in the country is very high because of the fact that operators that built these transmission infrastructure have borrowed money with high interest rate and will have to pay back in record time.

Banks in the country charges interest rate of 35 percent. How can you borrow money with 35 percent interest rate to execute a long term project and still charge reasonable cost? They have no option than to charge high to enable them to have quick return on investment.

“More so, ‘Right of Way’ issues as we are witnessing today is also tied to right funding.

He said that since the country does not have venture capital firms that can fund long term capital projects, “our best alternative is for the federal government to borrow money to finance the building of telecommunications transmission infrastructure that operators can lease to deliver services at cheaper cost as well as reliable.

“Since government can borrow money to finance railway project which is long term project that helps to ease means of transportation at reduced cost, it is not out of place to extend same to ICT development knowing that availability of telecommunications services has a wide range of positive impact on the economy.

“Today we complain of impediments to broadband penetration, inability to reach 30 percent target. Even where we have access, reliability is a problem due to high cost of backbone infrastructure. Federal government needs to come out with right funding mechanism to address these problems,” he stated.

Mohammed Rudman, managing director, Internet Exchange Point of Nigeria, IXPN, said that the issue of right of way has been there for a very long time and that the best solution to the problem is for all the various stakeholders to come together.

“All the right actors should come together. As it is today the industry is a bit fragmented, we need to really come together, have a strong voice and ensure that the highest authority in the country is aware of the current situation and propose solutions to the problem.

“For instance, the president of Nigeria should be aware of these inconsistencies in the prices of right of way that the telecommunications operators in Nigeria are facing in various states and it should be address at Federal Executive Council.

“They need to approve a common rate across all the states and the states should be in agreement with the presidency and if the presidency wants to do this I think it is possible for them to push the states to agree certain conditions.

“Not only right of way, there are constant bottle necks in terms of regulations just to boost internally generated revenue for the states, there are various kinds of regulations. As at the last time I checked there are 38 different levies and taxes on telecommunications operators across the federal, states and local government areas.

“This is huge. It doesn’t make sense. What should happen is for each state to possibly harmonize and get under one ministry where all the telecommunications related taxes and regulations can be pursued and be paid their instead going to various ministries departments and agencies,” he added.

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