If you’ve moved round in recent weeks, you may have noticed construction along some streets in the bustling city of Lagos, Nigeria. Apparently, fibre optic cables are being laid to provide Internet connection across the city.
So far, different estates and residential areas are receiving notices (JPEG) of the government’s intention to lay Internet fibre cables.
Lagos is home to several Internet services providers and the laying of fibre optic cables is not strange. That the Lagos State government commissioned the project made it particularly interesting. This suggests that the implementation of a smart city initiative is entering high gear.
On Thursday, May 14 2020, the Lagos State House of Assembly approved the unification of fibre infrastructure for telecom companies. This meant the deployment of a single cable duct for all telecom companies and other utility providers operating in the city.
The report presented before the legislature clarified that this has nothing to do with the 5G network and is a mere extension and consolidation of existing Internet fibre networks in Lagos.
Apparently, a “dig once” policy is being implemented in order to prevent the fragmented and constant digging of state roads by different telecom operators and Internet service providers.
The Lagos State government partnered with two companies, Messrs Western Telecommunications and Engineering Services Metro Limited, to handle the project.
According to the partnership agreement, the project partnership will last for an initial term of 25 years which might later be extended, and the companies are to pay the state 10% of the revenue generated from leasing the fibre ducts to telecom operators.
Also, the companies are meant to provide the Lagos State government with fibre duct capacity to points of interest (POI) within the state.
What this means potentially
All things considered, the plan to unify fibre networks in Lagos appears to be a good initiative for the state, telcos, and citizens in general.
We discovered, the laying of fibre cable ducts is not restricted to the high-net-worth areas of the state; more remote areas will also have cables laid. This could mean better and faster Internet connectivity all over the state.
Most Internet service providers usually lay fibre cables in strategic locations that have good prospects for investment returns. However, this always leads to the haphazard digging of state roads by these operators.
By unifying the city’s cable network, the government is effectively overhauling the current telecommunications practices in the state.
“It gives us the physical infrastructure to lay cables or buy capacity. The reality is we don’t have to build because they’ve built,” Funke Opeke, CEO of MainOne Cable Company, comments on the initiative.
Opeke states that MainOne believes in shared infrastructure and encourages the government to speed up the commercialisation process and the business model the new project will entail.
“They’re putting in multiple ducts. That means they see an open market and we are eager for them to put in the infrastructure so we can access it.”
Gbolahan Awonuga, Secretary, Association of Licensed Telecommunications Operators of Nigeria (ALTON), also agrees with Opeke, asserting that the initiative could increase the capacity of telcos to deploy Internet infrastructure around Lagos.
Even for stakeholders, the details are not clear
From our discussions, we found that the details of the government’s initiative are unclear and somewhat baffling.
The state government handed the project to what seems to be two Internet shy companies. Messrs Western Telecommunications and Engineering Services Metro Limited.
Several re-worded Google and LinkedIn searches revealed practically nothing on any of these companies, their management, or employees. We also searched a database of CAC registered companies but came up with no companies bearing those exact names.
Considering that some Nigerian businesses may still not be online, we engaged the likes of ALTON, and the Association of Telecommunications Companies of Nigeria (ATCON) to find out a little about them.
Surprisingly, neither of them was exactly sure how the companies got involved in such an important project; they couldn’t even speak about the companies as entities. It is worth noting that most, if not all, telcos and ISPs in Nigeria are under the umbrella of either ATCON or ALTON.
“We don’t know who they are and we are still waiting to find out what exactly the plan is,” says ALTON’s Awonuga.
Ajibola Olude, Secretary of ATCON reveals that since the initiative began, the telcos have been trying to meaningfully engage the government, and hopes their attempts will be successful.
It got more interesting when we discovered another company — Emmavic Engineering Limited — in one of the letters sent to a residential area in Lagos. At least we could find its managing director, Dare Bankole, whose take we still await on the current initiative.
Why this seems strange
Over the years, the likes of Glo, MTN, and MainOne have been building Internet infrastructure in Nigeria. So far, it is not clear how much consultation the Lagos State government has had with these stakeholders regarding the ongoing fibre projects.
MainOne, for example, has a federal government fibre wholesale licence for the Lagos zone. iConnect of IHS towers handles that of North Central. Others such as Smile, Spectranet, and Vodacom have also bid for the remaining zones.
Opeke reveals that MainOne is still waiting to find out, in clear detail, what this means for existing fibre infrastructure in Lagos. The only thing confirmed is that RoW has been suspended for cable companies, pending the completion of the current project.
Awonuga echoes Opeke’s uncertainty, alleging that Lagos holds 45% of Internet infrastructure in Nigeria, but the government has not clarified what will become of them with the current project.
Will all telcos and ISPs pass their respective fibre cables through a single duct? Will the likes of FibreOne, that passes its cable on poles above ground need to relocate their cables underground? Or will everyone latch onto a single fibre network?
Recall that in the past few months, a number of other states have either been slashing or zero-rating right of way (RoW) charges. However, the Lagos State government has maintained its current charge of ₦5,000 ($12.95) per metre.
Though the new initiative seemed to be a way to ease the burden of RoW charges on telcos, Awonuga states that it will remain a factor.
“We already have existing infrastructure which we pay charges for. Even if that is resolved, we still have to face the charges when placing last-mile connections,” Awonuga explains.
Others have tried this before
Countries like South Africa, Rwanda, Mexico, Russia, and Kenya have also attempted to build a single wholesale network, but with little success. Though the wholesale networks of Rwanda and Mexico have gone live, expectations aren’t being met.
In Kenya, the project never saw the light of day due to a complicated negotiation process with various stakeholders. Projects in Russia and South Africa were delayed and eventually abandoned.
Though one might wonder if this could be more successful in a state than in a country, Lagos has a significantly higher population than Rwanda. This probably makes the East African nation a seemingly fitting comparison.
Since Rwanda launched its unified LTE-based network in 2014, the prices of data have not become more affordable and there has been little to no competition in the telecom space.
Kt Rwanda Network (KtRN), the single infrastructure provider, has been making losses for the last three years.
The GSMA maintains that building a single wholesale network comes with a lot of disadvantages which could be better avoided by alternative means.
A unified fibre network brings the promise of better coverage, lower prices, higher competition, and efficiency.
However, the GSMA highlights that fibre is still built in places that already have existing coverage. Rather than competition, a monopoly sets in since price is determined by a single operator or the government. The monopoly means telecom infrastructure upgrades will be handled by one company — the wholesaler.
The GSMA contends that a better way is for governments, regulators, and mobile operators to collaborate on long-term solutions. Countries like Turkey and the UK present examples of alternative measures to provide coverage.
In Lagos, fibre installations appear to be kicking into high gear, but relevant stakeholders in the private sector will be important when it comes to negotiations that will ensure success.
Discuss this topic on Community.
Listen to Built in Africa, a podcast by Techpoint Africa
NEW REPORT: Nigerian startups raised $28.35m in Q2 2020; only about 4.5% of that came from local investors. Find out more in the full report.