Anambra Waives Right-of-Way for Telcos as 29 States Continue to Ignore FG’s N145/m Proposed Fee

Anambra Waives Right-of-Way Fees for Telcos, Here's why Other States Should Bring Down Charges

Anambra state has completely waived right-of-way (RoW) fees for telecom operators. This is part of the state’s efforts to drive broadband expansion.

According to the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, Anambra joins Kaduna as the only two states to have zero-rated RoW charges for network providers.

However, exorbitant RoW fees levied on operators by several states still constitute a roadblock to the extension of broadband coverage across the country.

Only 7 States Have Agreed to FG’s N145/m RoW Fee

29 out of 36 states in the country have yet to implement the Federal Government’s proposed N145/m RoW fee. This is according to Dr Isa Ali Pantami, Minister of Communications and Digital Economy. The seven states that have applied the N145/m RoW rate are Kaduna, Katsina, Plateau, Ekiti, Kwara, Anambra and Imo.

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In January 2020, Nigeria’s telecom sector appeared to have made headway as regards RoW controversy after the 36 state governors had unanimously agreed to review charges to a maximum of N145 per linear metre of fibre. However, more than a year later, 29 states have reneged on that agreement.

Many of these states continue to charge exorbitant RoW fees. For instance, Lagos has insisted on N1,500 per linear metre of fibre in RoW charges for telecom companies. The absence of a unified RoW fee across the country keeps stalling the advancement of broadband fibre networks.

Northern States Under More Pressure to Slash Charges

States in Northern Nigeria should especially look to review charges downwards, as they make up the bottom 10 of states by broadband reach. In fact, Nigeria’s low broadband penetration (45%) is a reflection of the dearth of fibre networks in northern states.

% of Population within 5Km of Fibre Reach in each Nigerian State, Source: HIP Consult via NCC

Although 3 Northern states are among the 7 states to have effected the N145/m fee, no Northern state has totally waived RoW charges for telcos. Yet, a state like Anambra already in the top 10 states by broadband coverage across Nigeria has given such waiver.

Admittedly, telcos are less likely to deploy fibre connections in Northern states as low internet activity in the region might not bode well for investment in costly broadband infrastructure. For context, Northern states constitute just 42% of Nigeria’s internet population, despite having the highest number of states (19) and the largest population (90 million).

On Deepening Broadband Penetration

In Nigeria, mobile network operators roll out the majority of fibre cables across the country, with MTN, Airtel and Glo laying 64% (34,436km) of the total fibre distance (54,000km) currently covered. Therefore, a reduction in RoW charges will largely incentivise the expansion of fibre networks by telecom operators.

Africa's Internet Population is the Fastest Growing in the World- International Telecommunications Union
Broadband penetration in Nigeria is still at 45%

That said, the disparity in RoW fees across various states could be attributed to the fact that governors reserve the right by law to determine these charges for fibre-laying activities on state roads.

Just as was done early last year, it is imperative that the telco regulator and industry stakeholders consult with all state governors with a view to reaching a consensus and actually implementing the proposed N145/m RoW fee.

Several countries like Kenya charge no RoW fees for operators. Kenya has been able to achieve an internet penetration of 85% – the highest in Africa.

Slashing right-of-way fees will definitely accelerate broadband expansion in Nigeria, but the adoption of a harmonized RoW fee by state governments may not happen anytime soon.

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