The Nigerian Communications Commission (NCC) has concluded plans to disburse N70 billion to the six Infrastructure companies (Infracos) it licensed recently to deepen infrastructure deployment and improve digital access across the country.
The NCC Executive Vice Chairman, Professor Umar Danbatta made the disclosure when he spoke to journalists at the Commission’s first Nigerian Telecom Leadership Summit held in Lagos today.
The money is part of the subsidy, the commission, on behalf of the federal government, promised the companies to encourage them deploy broadband services to underserved and un-served areas of the country.
The InfraCos, expected to benefit from the subsidy, are MainOne Limited, which serves the Lagos zone, Raeana Nigeria Limited for South-south zone, O’dua Infraco Resources Limited for South-West Zone, Fleek Networks Limited for North-West Zone, Brinks Integrated Solutions for North-East Zone, and Zinox Technologies Limited for the South-East Zone.
The six infracos are licensed in a manner to provide broadband access points to the 774 local governments in the country to ensure there is massive deployment of data services from the huge capacity, which is 60 terabyte, which is available at the landing point in Lagos.
The telecom companies will not automatically access the fund though; what they get and when they get it would depend on the level of progress they have made on their own to deploy on the field and the progress they have recorded.
He said payment of the subsidy would depend on “attainment of milestones which are measurable. If we do not see any visible deployment then no subsidy, and at that point we reserve the right to withdraw the license, because the license is not forever”.
Danbatta said, the Infracos “are good to go; we expect them to mobilise to site immediately. They have six months left to mobilise, this would be one of the biggest project that the NCC would be embarking upon”.
The amount each company gets would also depend on their own capital outlay and the extent of work they are carrying out or would be carried out, according to Danbatta.
“We have finished work on the subsidy to be paid which is dependent on the capital outlay of the infracos; the amount to be paid any given infraco would also depend on the region they are assigned, because some regions are water logged, and they are free to use any technology they desire to roll out their services”, he said.
During his paper presentation at the event, the NCC EVC said the Commission has made giant strides in improving the overall broadband penetration, with a remarkable 33.22 per cent as at March 2019 compared with 8.50 per cent in 2015.
In the voice segment, penetration, he said, has reached 173 million lines as at March 2019, which translates to a teledensity of 91 per cent, while internet access has also increased to 116 million within the same period.
Quoting figures from the National Bureau of Statistics, Danbatta said the contribution of the telecom sector to Nigeria’s gross domestic product was 9.85 per cent as at the last quarter of 2018, valued at N1.9 trillion and investment peaking at $70 billion ( about N25 trillion).
According to the EVC the figures posted by the industry under the Commission’s watch are indicative of a very fast growing and resilient sector of the economy, noting however that “no such industry with these characteristics can be sustained over a long period of time without a corresponding injection of more investments”.
He noted however that, “Investors, are not attracted to environments where returns are in doubt because in a very capital intensive industry like telecom, investors are looking for both a very friendly investment climate and predictable outcomes”.