Recently, the Ekiti state governor, Kayode Fayemi issued an executive order which set in motion a reduction in the Right of Way (RoW) charges related to laying broadband and other similar telecommunications infrastructure in the state.
The reduction is from an initial ₦4,500 per metre to the Federal Government recommended ₦145. To put this in context, laying of broadband fibres across a length of 1km in Ekiti state that would formerly cost ₦4.5 million in RoW charges alone, would now cost just ₦145,000.
This monumental move has triggered other states including Katsina, Imo, Plateau to make similar move. In fact, Kaduna state went a step ahead by completely eliminating RoW charges for broadband and related communication infrastructure in the state.
It may surprise you to know that, just this January, a total of 14 states hiked their RoW charges, making it even more difficult for network operators and internet service providers to roll out connectivity.
The States Governors had resolved, under the auspices of the Nigerian Governors’ Forum on the 22nd of January to address the lingering issue of RoW charges in an effort to deepen broadband penetration in the country. They recognized that this was a necessary step to improve internet connectivity in the country. However, most of these states are keen on maintaining revenues from RoW just like other internally generated revenue sources, especially as allocations from the federal government dwindle.
But Nigerians need better internet connectivity, especially as the world goes more digital!
According to the Digital 2020 Global Overview Report, Nigeria had a 42% internet penetration. This represents 85.49 million of Nigeria’s estimated 203.6 million people.
Although 169.2 million mobile phones are connected, it is common for people, especially in urban areas to use multiple lines. Also, people require more than basic internet connectivity to maximize the benefits of the digital economy. A lot of mobile phone users in Nigeria still use feature phones which provide basic phone functions such as voice calling and text messaging.
However, the number of smartphone users in Nigeria is increasing. It is estimated that there will be about 143 million smartphone users in Nigeria by 2025. All these users will need reliable and quality internet services to communicate effectively.
Nigeria’s broadband penetration which currently stands at 39.58% will have to increase substantially to meet the rapidly growing demand for quality internet services. The broadband can be described as the high-speed internet that makes it possible to seamlessly utilize data intensive applications such as video streaming/calls and gaming.
Telecommunications companies and internet service providers in Nigeria are already faced with several challenges. These include electricity supply, security, unstable regulatory environment and more. For these companies, lower rollout costs are critical to delivering better quality and affordable services. One of the ways to achieve this is through a reduction in Right of Way charges. Service providers need an enabling environment to flourish.
To support the actualization of a broader digital economy in Nigeria, it is imperative for states to eliminate or reduce their right of way charges. By doing this, telecommunication companies and internet service providers in Nigeria would be able to run their businesses more profitably, and by extension, we would see a deeper broadband penetration, better and more affordable internet services.
