[Spotlight Nigeria] State Government's role in broadband penetration: The power of Open Access networks

Nigeria must expand its fibre coverage to grow the technology ecosystem and dependent sectors. This need for infrastructure expansion has become crucial, especially as the country is on track to miss its goal of 70% broadband penetration by 2025, a target set in the National Broadband Plan. Surprisingly, with these well-known requirements, there is little alignment on the role of State governments in supporting fibre rollout. This disconnect is evident as most operators, i.e. telcos & ISPs, only engage with State governments when paying Right of Way (ROW) charges.

States impose a Right of Way fee on operators that excavate government-owned roads to build fibre infrastructure. In 2017, the Federal government, in collaboration with the 36 State governments, pegged the RoW charges nationwide at N145 per Meter to encourage fibre build. However, this pricing regime is yet to be fully adopted nationwide, with each state setting its prices. For instance, Kwara State charges N1 per kilometre, while Lagos State’s cost ranges from N850 to N1500. Meanwhile, Nasarawa, Katsina, Kaduna, and Anambra have waived the RoW charge.

While a positive step, eliminating or reducing RoW charges is not sufficient if State governments intend to aggressively promote fibre infrastructure. A more proactive approach for state governments would be to partner with Open Access Network providers. These neutral carriers build fibre infrastructure and make it available as a service to all operators for connecting customers or expanding their network. The Open Access model differs from the traditional model, where each operator invests independently in fibre infrastructure.

Establishing an Open Access Network offers significant advantages over the traditional model. One advantage is minimising the disruption to State infrastructure caused by the repeated digging for each operator’s fibre rollout. This model also allows operators expand their customer base without significant capital expenditure. Operators leveraging Open Access Networks can differentiate their services by providing superior quality of service, unique service bundling, and better customer experience since the infrastructure is equally available to all.

For residents, an Open Access Network fosters competition among operators. This competition allows smaller players with more aggressive offerings to compete with established providers, leading to better pricing. Furthermore, an Open Access Network ensures that customers in areas that operators might typically avoid due to low returns on investment can be serviced by statewide infrastructure. An Open Access network also simplifies switching between providers since they are all connected to the same network, empowering residents to choose the best service.

State governments can attract these Open Access network providers by establishing Public-Private Partnerships (PPP). A PPP can provide states with a sustainable revenue stream without imposing barriers for infrastructure companies like high ROW charges. Under these agreements, Open Access network providers bring the necessary expertise to build and operate the network. Alternatively, the state governments can provide grants to subsidise the network rollout. The Open Access Network model has been implemented successfully in America, Europe and Asia, providing examples for Nigerian states to emulate.

If Nigeria is to meet its stated goals of driving economic growth through technology, alignment is essential at all levels of government. Federal government policies need to be complemented by State government actions. State governments must cease viewing RoW charges as a means to extract funds from operators and instead explore partnerships. Incentivising Open Access Networks is a viable strategy to increase fibre coverage, stimulate competition and position state governments as leaders in broadband penetration.