Nigeria: Right of Way Crisis Stalls Telcos’ Fibre Rollout in Nigeria

Nigeria’s ambition to become a dominant digital economy faces a significant hurdle: the struggle of telecommunications companies to expand fibre optic infrastructure, essential for high-speed internet and connectivity. Despite strides in digital adoption, exorbitant Right of Way (RoW) fees imposed by state governments are obstructing the rollout of this critical infrastructure.

RoW, which grants permission for telecom companies to install and maintain fibre optic cables and related infrastructure, is crucial for building a modern digital economy. These cables power services ranging from online education to financial platforms and e-commerce. Unfortunately, instead of fostering this growth, some state governors see RoW as an opportunity to impose excessive fees on telcos, slowing down their infrastructure expansion.

Mounting Costs

In 2013, the National Economic Council (NEC) set a maximum RoW charge of N145 per linear meter, aiming to simplify costs and boost broadband deployment. However, several state governments have since violated this agreement, demanding higher fees that hinder telecom network expansion.

“Some states still charge far more than the agreed N145 per meter,” said Gbenga Adebayor, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON). Even states that appear compliant find alternative ways to inflate costs, such as introducing hidden charges, complicating the rollout efforts.

Limited Progress

As of June 2024, the Nigerian Communications Commission (NCC) reported securing RoW fee waivers in only six states. The NCC’s Executive Vice Chairman, Aminu Maida, noted that discussions with other state governments were ongoing. However, when The PUNCH sought details on the states that had granted waivers, the commission remained unresponsive.

Currently, only five states—Nasarawa, Katsina, Anambra, Kaduna, and Kwara—have introduced measures to reduce telcos’ financial burden, with Kwara offering the lowest fee of N1 per kilometre of fibre. Despite these efforts, the inconsistency of RoW fees across the country poses a significant obstacle, particularly in states that continue imposing exorbitant fees.

This inconsistency not only hampers telecom companies from laying fibre optic cables but also limits broadband penetration, especially in underserved rural areas—a key driver of Nigeria’s digital future.

A Digital Economy at Crossroads

Experts warn that if these barriers persist, Nigeria’s digital ambitions may falter. Although the Federal Government has prioritised broadband expansion, the actions—or inaction—of state governments are delaying critical infrastructure deployment.

Some state governments’ excessive RoW fees are seen as short-sighted revenue tactics that could compromise long-term national digital goals. During a stakeholders’ meeting in Abuja in July 2024, telecom leaders and state representatives discussed the issue and proposed a Memorandum of Understanding (MoU) to create an investor-friendly environment for infrastructure deployment. They also advocated for a “Dig Once Policy” to allow multiple operators to install infrastructure simultaneously, minimising costs and disruptions.

However, for many rural regions, broadband remains a distant dream. As of March 2024, broadband penetration in Nigeria was 43.53%, far from the government’s goal of 70% by 2025. This target includes reducing the unconnected population in rural regions from 61% to less than 20% by 2027.

Investment Reluctance in Rural Areas

Investing in fibre deployments is expensive, particularly in rural areas where the return on investment is uncertain. As Reuben Oshomah, Regional Director for West Africa at Avanti Satellite Communications, pointed out, deploying fibre requires significant investment, making investors wary of extending infrastructure to low-income regions.

“If I were an investor looking at fibre in Africa, I’d be asking about potential revenue streams and profitability,” said Oshomah, highlighting the challenges of rural connectivity expansion.

Youth and Digital Aspirations

Nigeria’s youthful population, with a median age of 18, is eager to embrace digital technologies. While tech hubs in cities like Lagos and Abuja are thriving, the digital divide between urban and rural areas hampers the country’s ability to fully capitalise on this tech-savvy generation.

Abiola Jimoh, co-CEO of XChangeBOX, emphasised the importance of broadband in driving Nigeria’s digital future: “The future of our digital economy relies on broadband, and broadband relies on Right-of-Way. Without resolving this issue, our progress will be limited.”

Calls for Broader Support

Civil society and labour unions are now being urged to take up the cause. Deolu Ogunbanjo, President of the National Association of Telecommunications Subscribers, called on groups like the Nigerian Labour Congress (NLC) to hold non-compliant states accountable. He stressed that fibre optics enable commercial activities and economic growth, making it essential for states to cooperate with telcos on RoW policies.

Ogunbanjo further encouraged telecom operators to name states that were not complying with the agreed RoW rates, allowing labour unions to apply pressure on state governments.

Federal Government’s Inaction

While state governments play a significant role in the RoW crisis, some industry insiders also blame the Federal Government for its lack of proactive action. One insider criticised Minister of Communications, Bosun Tijani, for focusing on internal ministry matters rather than addressing critical infrastructure challenges like RoW.

They contrasted this with the previous administration, under Minister Isa Pantami, which had made progress in resolving RoW disputes with state governors. Since Tijani’s appointment, many telecom infrastructure initiatives have stalled, according to the source.

The Path Forward

Despite these challenges, industry leaders remain optimistic. Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON), emphasised the need for greater collaboration between Federal and State Governments to ensure Nigeria’s digital future.

“The future of Nigeria’s economy is digital, and telecom infrastructure is the backbone. We must prioritise infrastructure development and simplify regulatory processes,” Emoekpere stated.

Nigeria plans to deploy an additional 90,000 kilometres of fibre optic cables, raising its total network capacity to 125,000 kilometres. This initiative, announced by Minister Bosun Tijani, aims to position Nigeria as Africa’s third-largest fibre optic backbone, after South Africa and Egypt. However, for this to succeed, both state and federal governments must cooperate to remove obstacles like excessive RoW fees.

Without swift action, Nigeria risks falling behind in the global digital race, and the dream of a digitally connected future for all its citizens may remain out of reach.