Nigerian Communications Commission
Delivering broadband for development in Nigeria
The open access model
Executive Vice-Chairman, Nigerian
Communications Commission
To realize its Vision 20:2020 goal
of becoming one of the 20 largest
economies in the world by 2020,
Nigeria needs to take advantage of
broadband and become an e-economy. This requires progress in two areas: moving from slow low-capacity
copper wire to fibre-optic networks;
and making sure that rural communities are not left out of the access to
the information society that most urban inhabitants
enjoy.
Extending the coverage of broadband beyond cities and major towns, providing access to information
and communication technologies (ICT) in unserved and
underserved areas, and encouraging the use of ICT in
primary, secondary and tertiary institutions will create
value in enhancing universal access, learning, knowledge transfer, and employability of the workforce,
thereby supporting diversification of
the economy. This could potentially
contribute about USD 1.1 billion (GDP
growth of about 1.2 per cent) by
2015, according to a recent study*.
The liberalization of the telecommunications sector in 2000 resulted
in significant improvement in the lives
of Nigerians and changed the nature
of everyday business. Teledensity
in Nigeria increased from 8.5 per
cent in 2004 to 64.7 per cent in
April 2011, representing more than
90 million active telephone lines. This
progress attracted foreign direct investment (more than USD 18 billion since 2001), and
increased employment (direct employment of more
than 12 500 people, and indirect employment of about
150 000 others), as well as bringing other economic
benefits.
ITU/V. Martin
Dr Eugene Juwah
* Assessment of Economic Impact of Wireless
Broadband in Nigeria, Analysys Mason, February
2011.
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Nigeria’s Broadband Strategy Broadband and the economy
Notwithstanding these developments, there is
a notable gap in terms of ICT infrastructure between
major urban centres and rural communities. A recent
survey conducted by the Nigerian Communications
Commission (NCC) showed that only 17 per cent of
rural communities had Internet facilities, as compared
with 79 per cent of urban communities. In addition,
only 11 per cent of the respondents in the rural communities with Internet facilities had access to such facilities. NCC via the Universal Service Provision Fund has
therefore been actively engaged in various activities to
extend broadband and ICT development in rural areas.
Deployment of fibre-optic
broadband networks
The open access model
Despite the advantages of fibre-optic networks, the
pace of investment in this area has been slow globally
because of: high investment costs resulting from the
high cost of civil engineering work to construct ducts;
regulatory difficulties involved in obtaining right of way
permits for access to streets, roads, and other public
land; repeated requests by different telecommunication operators for excavation of the same streets or
roads; and lack of sharing of fibre-optic infrastructure
by providers.
Fibre deployment in Nigeria has also been plagued
by inconsistency in administrative procedures regarding
right of way permits, and poor urban and regional planning. In areas where fibre-optic networks exist, regulatory deficiencies and an absence of coordination in fibre
deployment have resulted in the degradation of roads
and public infrastructure.
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ITU News  5 | 2011  June 2011
Because of the infrastructural and operational problems currently faced in Nigeria, such as congestion and
the unwillingness of operators to share backbone infrastructure, NCC decided to explore an open access model for the deployment of a fibre-optic network. The aim
was to ensure effective deployment and a level playing
field to achieve the national goals of an e-economy and
universal access.
Sharing infrastructure is one strategy that NCC as
the telecommunications regulator in Nigeria is proposing for achieving a national broadband infrastructure
more quickly than through simply letting the market
take its course.
The open access model is a framework enabling
fibre-optic cable carriers to share the infrastructure used
in the deployment of their cables. The model separates
the roles of the service provider and the network operator, and provides services to operators on a fair and
non-discriminatory basis. The aim is to bridge the gaps
in broadband availability through the central deployment of fibre by an independent infrastructure provider
(Infraco) to operators and other major users, at a subsidized price.
The open access network will be rented out on
equal terms to service providers, companies and public
operations, providing a competition-neutral environment to drive the development of the broadband market. Customers may be granted exclusive rights to use
a line or an entire network structure. Features of the
proposed model include an ownership option, a pricing strategy and a deployment strategy, as described
below.
Shutterstock
Broadband and the economy Nigeria’s Broadband Strategy
Ownership option
Deployment strategy
The most viable ownership option for open access
deployment in Nigeria is an independent infrastructure provider (Infraco) licensed by NCC, who provides
ducts and fibre in parallel to existing fibre deployments.
The mandate of Infraco will be to supply an open and
competition-neutral fibre network nationwide. The core
tasks of Infraco will be to build, operate and maintain
the fibre-optic communication network, and to lease
fibre-optic connections to operators and companies as
well as the public.
The network will be developed in stages, beginning
with consultations with stakeholders and service providers. A detailed design will then be developed, and
the network will be built. The core network will initially
be deployed in central business districts and commercial
centres in urban areas, where the demand for broadband is highest. The network will then be extended to
commercial centres in peri-urban and rural areas. After
deployment in commercial areas, the network will be
expanded to key public institutions and residential areas, with priority being given to multiple-household
apartments over detached villas.
As illustrated in the chart (see page 28), NCC will
license the independent infrastructure provider, regulate
the rates that Infraco charges operators to lease infrastructure, and regulate the rates that consumers pay
for broadband access. In addition, NCC will collaborate
with other stakeholders in funding Infraco, facilitate
agreements between various tiers of government and
Infraco, and engage in dispute resolution among the
various stakeholders.
Pricing strategy
In order to make this model financially attractive
to operators and service providers, pricing will be affordable. This is expected to be achieved through a
cost-based pricing strategy, where operators pay the
cost price for the provision of the service, plus maintenance costs. The strategy should be operator-neutral,
providing a network that is open to all players on equal
terms.
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Nigeria’s Broadband Strategy Broadband and the economy
Overview of the proposed open access model for a fibre-optic network in Nigeria, showing key stakeholders, their responsibilities and
the relationships between them
Facilitation
Government
(local, state, federal)
Rights of way
Equity
investors
Infrastructure provision
Funding
Ownership
Dividend
NCC
Regulator’s Role
› Provide licences
› Regulate price
› Offer subsidies
› Facilitate agreements
Licence
Price regulation
Subsidies
Infraco/
Carrier
Lease fee/
charges
Lease fee/charges
Lease agreements
Fibre deployment
Acquisition
Facilitation
Joint venture
agreements
Operators
Downward relationships
Upward relationships
Service provision
Service fee
Consumer
Establishment of community
communication centres
Another NCC activity, which has already been successful in significantly increasing rural penetration and
universal access, is the introduction of community
communication centres. These centres are designed to
extend voice, Internet, ICT training and other services
to unserved rural communities. Each centre provides a
public calling facility, a cybercafé with wireless broadband Internet connectivity, and ICT training courses. It
also serves as a platform for extending wireless Internet
access to neighbouring communities within a 5 to
15 kilometre radius. The community communication
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ITU News  5 | 2011  June 2011
centre has enabled access to the Internet for individuals,
business, government offices, schools, hospitals, police,
rescue service providers and other community-based organizations. The centres are managed by private operators and also provide remittance services (money transfers) in the target communities.
The key economic and social benefits of the community communication centres include:
 stimulation of social and economic development of
unserved and underserved rural areas;
 promotion of the communication rights of Nigerians;
 access to good quality services at fair and affordable
rates;
Broadband and the economy Nigeria’s Broadband Strategy
This project is rapidly changing the lives of the members of the host communities and their approach to business, increasing efficiency and attracting investment.
The centres have empowered rural folk by providing ICT
infrastructure to schools, hospitals, police, and rescue
services. There are currently more than 150 operational
community communication centres across the country,
and an additional 109 centres are being constructed.
The success of the community communication centres confirms the capacity of ICT — in particular, broadband — to spur economic development, especially in
rural communities, as the country moves to attain its
Vision 20:2020 objectives.
Alamy
 promotion of educational empowerment;
 enhancement of government programmes,
such as the distance-learning programme of the
National Open University, the National Information,
Communication and Education Programme, and
Wire Nigeria (WIN);
 reduction of rural to urban population drift by bridging the urban-rural access gap;
 generation of employment in unserved, underserved
and rural areas;
 reduction in the cost of business, social communications and transactions in unserved, underserved and
rural areas.
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