Right of Way crisis stalls telcos fibre rollout drive

With Right of Way issues unresolved, Nigeria’s digital future progress is slowed, impeding the country’s ability to harness its digital potential, writes JUSTICE OKAMGBA

Nigeria’s journey toward becoming a leading digital economy is facing a major challenge: the inability of telecommunications companies to effectively expand the fibre optic infrastructure crucial for high-speed internet and seamless connectivity.

Despite the country’s strides in digital adoption, a key impediment to fully realising this digital future is the struggle to roll out the essential infrastructure, which often meets roadblocks in the form of excessive Right of Way fees imposed by state governments.

RoW refers to the permissions granted to telecom companies to install, maintain, and upgrade infrastructure, such as fibre optic cables, cell towers, and antennas on public or private property.
These cables are the backbone of a modern digital economy, powering everything from online education to financial services and e-commerce.

However, instead of creating a conducive environment for these advancements, many state governors see RoW as an avenue to impose exorbitant fees on telcos, hampering the expansion of critical infrastructure.

Costly challenge
In 2013, the National Economic Council agreed on a maximum RoW charge of N145 per linear meter, a policy meant to streamline the costs for telecom operators and accelerate broadband deployment.

However, several state governments have since violated this agreement, demanding higher fees and making it difficult for telcos to expand their networks.

“Some states are still charging far more than the N145 per meter agreed upon,” said the Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayor. “We are not yet where we need to be,” he told The PUNCH.

Even when states appear to comply with the RoW agreement, telecom companies claim that some state governments find alternative ways to inflate the costs.

The ALTON chairman explained, “Some states are very positive, but others are hiding behind offering free RoW and then introducing other charges that far exceed the standard fees. This is something stakeholders must address.”

Limited progress

As of June 2024, the Nigerian Communications Commission, which regulates the telecom industry, reported that it had secured RoW fee waivers in only six states.
The Executive Vice Chairman of the NCC, Aminu Maida, stated that discussions with other state governments were ongoing to secure additional waivers.

“The NCC has embarked on critical advocacy initiatives to address long-term challenges in the sector, including advocacy for designating telecom infrastructure as critical national infrastructure, as well as successfully persuading over six states to waive right-of-way fees, even as the NCC initiates discussions with more states,” the EVC noted.

The PUNCH contacted the Director of Publicity of the NCC, Reuben Mouka, via calls and messages, asking him to identify the six states the commission claimed had granted waivers but received no response.

Currently, only five states—Nasarawa, Katsina, Anambra, Kaduna, and Kwara—have introduced measures to ease the financial burden on telcos, with Kwara charging a nominal fee of N1 per kilometre of fibre.

While these efforts are commendable, the disparity in RoW charges across the country remains a significant obstacle, particularly in states that continue to impose exorbitant fees.

This inconsistency not only hinders telecom companies from laying fibre optic cables but also stifles the potential for broadband penetration in underserved and rural areas, a critical component for Nigeria’s digital growth.

Digital economy at crossroads
Experts warn that the longer these barriers persist, the more Nigeria’s digital future hangs in the balance. While the Federal Government has made broadband expansion a priority, state governments’ actions or inaction are slowing down the rollout of this critical infrastructure.

The inconsistent application of RoW fees and the imposition of hidden costs are seen as short-term revenue tactics that could undermine the country’s long-term digital potential.

In July, optimism was high when telecom industry leaders and representatives from the 36 states gathered in Abuja for a strategic stakeholders’ meeting organised by the Association of Telecommunications Companies of Nigeria.

The event was designed to address key challenges, including the RoW issue. Stakeholders concluded with a resolution to draft a Memorandum of Understanding between telecom operators and state governments, aimed at fostering an investor-friendly environment for telecom infrastructure deployment.

Additionally, participants advocated for the adoption of a “Dig Once Policy,” which would allow multiple telecom operators to lay infrastructure at the same time, reducing costs and minimising disruptions to local communities.

Despite these promising talks, the reality remains grim for many rural areas, where broadband penetration is still a distant dream.

As of March, broadband penetration in Nigeria stood at approximately 43.53 per cent, but rural regions remain significantly underconnected compared to urban centres.
The government has set an ambitious target of 70 per cent broadband penetration by 2025, aimed at reducing the number of unconnected Nigerians in rural regions from 61 per cent to less than 20 per cent by 2027.

The Regional Director of West Africa for Avanti Satellite Communications Ltd., Reuben Oshomah, said recently in a stakeholders meeting in Lagos that fibre deployment required significant investment, making it difficult for investors to justify the expense, particularly in rural areas.

“The limitations of fibre deployments and terrestrial infrastructure are clear. It is expensive, challenging, and requires sufficient demand to justify investment. If I were an investor looking into fibre in Africa, I would be asking about the return on investment, potential revenue streams, and profitability.

“This is why there is a reluctance to invest in areas with little or no income—investors simply don’t see the profitability in extending fibre to these regions,” Oshomah explained.
The youth factor

Nigeria’s youthful population is a driving force behind the country’s digital aspirations. With a median age of around 18 years, the country boasts a generation eager to embrace technology, and tech startups are thriving in urban centres like Lagos and Abuja.

However, the digital divide between urban and rural areas poses a serious challenge to harnessing the full potential of this tech-savvy generation.
Experts argued that Nigeria risks falling behind in the global race for digital dominance due to inadequate infrastructure. Delays in expanding broadband coverage could see the country miss out on opportunities for innovation, job creation, and economic growth.

“The future of our digital economy relies on broadband, and broadband relies on the Right-of-Way,” the co-CEO of XChangeBOX, Abiola Jimoh, told The PUNCH.

“Until we can address this issue, our progress will remain stunted. Broadband expansion is not just about laying cables; it is about enabling a future where everyone can benefit from the opportunities a connected Nigeria offers.”

Labor unions needed

As the telcos continue to grapple with the RoW challenge, there are increasing calls for broader involvement from civil society and labour unions.

The National President of the National Association of Telecommunications Subscribers, Deolu Ogunbanjo, urged labour unions, such as the Nigerian Labor Congress and the Trade Union Congress, to take up the cause and hold non-compliant states accountable.

“Any state that has not complied with the issues concerning critical national assets, for God’s sake, should be called out,” Ogunbanjo said in an interview with The PUNCH.
He highlighted the vital role that fibre optics play in driving economic development.

“Laying fibre optics brings commercial engagement and economic benefits. It is not just about subscribers; it impacts the economic activities and job opportunities for the citizens of that state,” he noted.

Ogunbanjo urged that telecom operators disclose the states that were not cooperating with RoW policies, allowing labour unions and civil society organisations to pressure state governments into compliance. “This is not just a telecom issue; it is about economic growth and improving the livelihoods of our citizens,” he posited.

Federal Government’s inaction

While state governments are a major part of the problem, industry insiders argued that the Federal Government’s inaction was also to blame for the slow pace of telecom infrastructure development.

An insider, speaking anonymously, criticised the current Minister of Communications and Digital Economy, Bosun Tijani, for prioritising internal issues over crucial telecom challenges like RoW.

“The minister is more focused on stifling internal activities within agencies under his ministry rather than addressing the pressing RoW issues,” the source said.
The insider added that the previous administration, under former Minister Isa Pantami, had made significant progress in working with the Nigerian Governors Forum to resolve RoW disputes.

However, since Tijani’s appointment, key infrastructure initiatives have stalled.

“Telecoms is about infrastructure and making it easy for operators to provide access. While Minister Tijani may be good with computers, computers are not telecoms,” the source stated.

Sources within the telecom regulatory agencies had also voiced concerns over the minimal cooperation from state governments.

“Many of the governors just see it as an opportunity to take money from operators,” said one official. The source also noted that telcos have been calling for tariff increases due to rising costs, but these requests have not yet been approved by the regulator.

Way forward

Despite the challenges, industry leaders remained hopeful that a resolution could be reached.
The President of the Association of Telecommunications Companies of Nigeria, Tony Emoekpere, stressed the importance of 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 this infrastructure, simplify the regulatory process, and ensure that the cost of doing business is reasonable and predictable,” Emoekpere said in a note to The PUNCH.

For now, the onus is on state governments to see the bigger picture. By prioritising long-term growth over short-term revenue, they can help pave the way for a digitally connected Nigeria, where citizens and businesses alike can thrive.

The Federal Government, meanwhile, must engage more actively with all stakeholders, pushing for a unified RoW policy and ensuring that telecom companies have the support they need to expand infrastructure across the nation.

Without swift and decisive action, Nigeria’s digital economy remains at risk, and the country may fall behind in an increasingly interconnected world.

Meanwhile, Nigeria is set to significantly expand its fibre optic network by deploying an additional 90,000 kilometres of cable, increasing the total capacity from 35,000 km to 125,000 km.

This initiative, announced by the Minister of Communications, Innovation, and Digital Economy, Dr Bosun Tijani, aims to position Nigeria as Africa’s third-largest terrestrial fibre optic backbone, following South Africa and Egypt.
The government, at all levels, had been urged by industry participants to view the initiative as a national one rather than a means of making money and undermining the efforts.