Private Sector to Drive Nigeria's $10b Broadband Investment Target

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The private sector is expected to drive the projected $10 billion investment target needed to grow the country’s broadband sub-sector of the economy in the next five years, the Nigerian Communications Commission (NCC) has said.

Director, Policy, Competition and Economic Analysis at NCC, Ms. Josephine Amuwa, disclosed this in an interview at the weekend, at the just concluded International Telecommunications Union (ITU) Telecoms World 2015 conference held in Budapest, Hungary.

Though the country has successfully, in the last 13 years, grew the voice segment of the telecommunications sector to the tune of over 150 million active telephone lines and has attained 107 per cent teledensity with 93 million Internet users, the country is doing poorly in the broadband segment with just 10 per cent penetration‎.

The $10 billion investment projection was made last year by KPMG, which consulted for the commission on the national broadband project.

According to Amuwa, “if KPMG says we need an annual investment of $2 billion over the next five years to build a national next-gen broadband network, that is a report, which is good for the industry anyway. But as you know, Nigeria is private sector-driven and government has taken out its hands from doing what private sector should do.
“So, with the KPMG estimated investment said to be needed over the next five years, we don’t believe it is the government that is going to provide the money for any investment. It is the private sector players that will drive the investment.
“What we only do as government and regulator is to continue providing and sustaining improved and friendly regulatory regime for their investment to offer them better Returns on Investment (ROI) and value to the final consumers.”

Amuwa explained that there was a need for existing operators to continue to invest in the market, especially to build better broadband infrastructure, saying “they cannot afford not to invest by folding their arms, otherwise, other new players will come in and invest in those areas and move ahead of them.”

As such, she said, “the $2 billion yearly investment that KPMG is referring to is not just one person; it is the totality of the investment that would be needed and it is going to be driven solely by the private sector.”

Amuwa, however, explained that KPMG is not a permanent consultants to the regulators, stressing that every project done by the NCC is carried out in line with the Public Procurement Act.

She said: “I think I need to clarify certain things here. KPMG is not our permanent consultants. They consult for us when we need them for certain projects. So, it is not like they are with us as permanent consultants. There is Public Procurement Act, so we cannot have a permanent consultant. If there is a project, we advised and if they meet the terms of references, we appoint them.”

Speaking on this year’s Nigeria’s participation at ITU forum, she said, “the key message we bought to ITU this year is the issue of our broadband expansion.”

According to her, broadband is the future, as there is hardly anything one seeks to do in today’s digital economy more efficiently and effectively that is not increasingly requiring access to the Internet.

She said: “There is nothing you can do now without needing the Internet, as access and broadband is the infrastructure that enables high-speed Internet, video streaming and other heavy data. Since we have conquered voice with over 150 million subscribers in Nigeria, the new phase is the broadband and that was one key message that we passed to the whole world here during our Opening Day.
“We told investors to come and invest in Nigeria with the assurances that their investment is safe and the investment we are looking for majorly is the investment in broadband infrastructure.”

While noting that the ITU Telecom World 2015 provided NCC with the opportunity to have quality engagement with potential broadband investors, Amuwa the regulator has also put a lot of incentive in place t to guarantee their protection of their investment.

We have a lot of incentive for the investors, the major one being that we have a good regulatory framework. We have an independent regulator that takes decision fairly and transparently and takes into due considerations the effects of its decision on other people.
“We try to create a competitive platform so that every operator operates the same rules. We already have rules to guide certain things you should do in the industry that will not make you do something that can affect the operations of other players and vice versa and we have programmes in place to ensure safety of their investment,” she added.

Meanwhile, Amuwa said the forum provided a platform for Nigeria to showcase what it is doing in the ICT industry.
“You are able to showcasing what you are doing as a country and you are also able to see what others are doing in their country so that you are able to take back new innovations, inventions and new ways of doing business back to Nigeria so that they can help us in our own ICT industry,” she said.

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