The federal government is set to eliminate high cost of internet services through a regulation that would put an end to multiple terrestrial transmission cable pricing and multiple taxations which have stunted the growth of bandwidth distribution across the country with the formulation of cost based transmission pricing model for all telecom operators.
Executive vice chairman of Nigerian Communications Commission (NCC), Dr Eugene Juwah speaking in Lagos at a stakeholder forum said the transmission cable market has been dominated by discriminatory and arbitrary pricing, predatory pricing and denial of access to viable routes, etc to many operators and end-users which have made Nigeria’s fibre optic bandwidth pricing one of the most expensive globally.
The regulator made available to telecom operators a study conducted on its behalf by KPMG using data provided telecom operating companies which was compared to global best practices and the International Telecommunications Union (ITU) standards. The model takes into cognizance Nigeria’s peculiar market situations.
Juwah said while the policy of government on communication is that appropriate prices should be determined by market competition, it also recognises that in the journey from monopoly to full market competition, there would be period of transition when competitive market forces may be inadequate to bring about efficient market conduct and prices that are close to costs.
He said in such situations, the policy provides that regulatory intervention goes into effect. “These are reasons why the NCC embarked on the cost study entitled ‘Cost-based Transmission Cable Pricing and Development of an Accounting Separation Framework/Retail Voice Tariff’.
NCC had on February 4 and 5, 2014, held an interactive session with telecom operators focused primarily on competitive dynamics, pricing and related matters.
The participants reached a consensus that in order to address the current arbitrary, predatory and discriminatory pricing inherent in the transmission line market segment, the NCC is to urgently conclude on the cost based transmission cable pricing study and develop strong enforcement regulations.
Mr. Joseph Tegbeh, head of telecom consulting, KPMG said the study covered the entire nation where operators exist. “The model has been built on a national basis. We are presenting it to you so that you can make your comments for us to factor it in and come out with a final draft.” Representative of the telecom companies who spoke sought clarifications on issues like multiple taxations, multiple regulations and discriminatory pricing.
Nigeria hopes to expand international fibre optic cable landing points to coastal states such as Delta, Rivers, Bayelsa, Cross River and Ondo States to ensure widespread diffusion of high capacity internet bandwidths around the country. This will promote establishment of recovery and restoration agreements among the cable companies and deliver additional landing points for national security and resilience purposes.
At the moment all the cable landings have only one entry point into the country through Lagos States and due to inadequate distribution infrastructure and channels to areas need inland, the cables currently have less than five per cent capacity utilisation. Additional landing points to other coastal states will improve access and reduce the risk associated with Lagos as a single point of entry and communication failure.
The federal government is also working with the state governments to grant waiver agreements on Rights of Way (ROW) for four years to telecommunications services providers and fibre optic providers. Telecom operators complain that the cost of obtaining ROW accounts for 50 per cent to 70 per cent of the total cost of deploying fibre optic cables in various states of the federation. They also complain of the lengthy approval time sometimes up to two years which contributes to the delay and escalation of costs in rollout of broadband networks.
Source : Leadership
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