‘Nigeria Needs $461m To Provide Telecoms Services To 97 Clusters

Nigeria will need $461 million to connect 97 clusters of communities in different parts of the country that are bereft of access to telecom services, LEADERSHIP findings revealed.

In 2013, a report by the Universal Service Provision Fund (USPF) revealed that an estimated population of about 36.8 million people and 207 clusters, do not have access to telecoms services.

In another update study carried out in 2019, the number of people living in the unserved and underserved areas was estimated to have dropped to 31.16 million and the number of clusters reviewed down to 114. Based on the outcome of the new study in 2022, the number of clusters has further dropped from 114 to 97 clusters with an estimated population of 27.91 million.

To connect the 97 clusters to telecoms services, would require a total of $461 million, a new report by GSMA has disclosed.

While telecoms operators in Nigeria have increased funding to rollout their services,  the report averred they cannot do it alone, considering the fact that expanding mobile broadband networks has become increasingly costly, while revenues for each additional mobile site decline as the number of people covered per new site becomes smaller.

For instance, in 2021, MTN Nigeria and Airtel Africa recorded N536.91 billion in capital expenditures (largely network roallouts), which increased to N613.13 billion in 2022 and N732.42 billion in 2023. Yet, they are unable to close the cluster gaps in the country.

The report therefore suggested the need to incentivise internet infrastructure rollout in underserved locations and stimulate demand for services among consumers.

“Closing the remaining coverage gap is primarily an economic challenge. Expanding mobile broadband networks become increasingly costly, while revenues for each additional mobile site decline as the number of people covered per new site becomes smaller. Furthermore, mobile broadband adoption would likely be lower in uncovered areas, as these are more likely to be low-income communities and encounter greater barriers in terms of digital literacy and skills.

“Governments in Africa and around the world have consequently introduced policies to incentivise internet infrastructure rollout in underserved locations and to stimulate demand for services among consumers. Several approaches have been adopted in various jurisdictions to close the coverage gap. These include market-based reforms, public-private partnerships and USFs.

“In Africa, at least 51 of the 54 countries in the region have introduced or are in the process of introducing the USF mechanism as a means to deploy mobile broadband infrastructure in commercially nonviable areas, with the intention of bridging the connectivity gap. In all cases, USFs are partly or entirely financed through contributions from telecoms service providers,” it stated.

Following through with these recommendations, the Nigerian government introduced the Universal Service Provision Fund (USPF) to facilitate the achievement of national policy goals for universal access and universal service to ICTs in rural, un-served and under-served areas in Nigeria.

Policy advisor and founder, Science, Technology and Innovation, Mr Jide Awe told LEADERSHIP that, no doubt, tge Nigerian Communications Commission (NCC) has great policies that could move the ICT sector to the next level, but then, there are lots of bureaucracies in implementing them, even as he suggested that the Commission must sit down with players who are rolling out ICT services. The regulator must know their challenges and find ways to solve them, he stated.

According to the Nigerian National Broadband Plan 2020-2025, the country hopes to increase broadband penetration to 70 per cent by 2025 and to achieve 96 per cent mobile broadband coverage by 2030 (which will offer internet access to almost all).

Citing an example, the policy advisor affirmed that the broadband targets set by the federal government is commendable, but to achieve them, there is need for operators to go to the unserved and underserved communities.

To encourage players to deploy infrastructure in those areas, however, the federal government must set aside soft loans as incentives, he advised.

While the USPF is being managed to facilitate the widest possible access to affordable telecommunications services for greater social equity and inclusion for the people of Nigeria, Awe advised that, “Government must make noise about this fund, so that more players can key into it. The Agency in charge of the fund must make it more transparent, as it disburses the fund.”

President of the National Association of Telecommunications Subscribers (NATCOMS), Adeolu Ogunbanjo told LEADERSHIP that there are approximately 95,000 kilometres of fibre optic cables across the country. “So far, the private sector has laid around 35,000 km. Part of the minister of communications, innovation, and digital economy, Bosun Tijani’s mandate is to complete 70 per cent of the 95,000km of Fibre. He should do such things as quickly as possible.

“I also believe that the licensing of seven Infrastructure Companies (InfraCos) to deploy fibre infrastructure across the six geo-political zones will also help to galvanise increased connectivity. This will also bring about a reduction in the cost of data with a broadband penetration target of 70 per cent to cover 90 per cent of the population by 2025 as contained in the new Nigerian National Broadband Plan (2020-2025),” Ogunbanjo stated.