By Technology Times Reporters
Lagos. August 5, 2012: The Nigerian Communications Commission is restructuring the Wire Nigeria (WIN) and State Accelerated Broadband Initiative (SABI), two major programmes expected to offer an undisclosed amount of subsidy funding to MTN Nigeria, Multi Links, IPNX, among other telecoms companies, the telecoms regulator has disclosed.
MTN Nigeria has pulled out of WIN, a subsidy deal under which the mobile phone company and others would have received subsidy from government for extending optical fibre capacity to underserved areas, Executive Vice Chairman, Nigerian Communications Commission (NCC), Eugene Juwah told the Nigeria Broadband Forum held in Lagos but did not give reasons cited by the operator owned by South Africa’s MTN Group, for the volte face.
Juwah, who disclosed this while fielding questions at the event said that both subsidy deals are currently being reviewed by the regulator when he dropped the hint that, “WIN was won by MTN and they have opted out.”
Both projects were conceived by Juwah’s predecessor, Ernest Ndukwe whereby NCC hopes to promote broadband growth into rural and underserved communities particularly areas considered commercially unviable by operators in what was cited as complementary initiatives that will be provided subsidy by the Universal Service Provision Fund (USPF).
The NCC stance comes just as USPF says it has concluded the process for its Backbone Infrastructure Project (BTRAIN) Pilot Project to deploy 500km of fibre in the country. BTRAIN is a 1000km-fibre backbone infrastructure project under which USPF is providing subsidy to accelerate the build-out of backbone transmission infrastructure to all local government areas in Nigeria, the Fund says.
The Nigerian Communications Act 2003, the establishing law of NCC mandated the Commission, “to establish USPF to promote the widespread availability and usage of network services and application services throughout Nigeria by encouraging the installation of network facilities and the provision for network services and application services to institutions and in un-served, underserved areas or for underserved groups within the community.”
In the case of SABI, it was conceived to extend broadband services to rural and underserved communities considered commercially unviable by operators while the WIN project aim was to connect major cities with optical fibre backbone to complement the effort of service providers in commercially unviable locations.
According to Juwah, following an evaluation by the new administration in NCC, it was decided that there was need to review the two subsidy programmes noting that, “SABI was not well-structured” because of the approach whereby it will subsidise customer premises equipment in the absence of infrastructure to support the service.
Multi Links, another phone company that was announced as a beneficiary of the WIN project had earlier pulled out of the subsidy deal in the wake of cash crunch faced by the operator a few years back prior to its recent acquisition by Helios International, people conversant with the situation told Technology Times at the weekend.
MTN Nigeria and Multi-Links Telkom, were hitherto announced as beneficiaries of the WIN deal that would provide an undisclosed amount of subsidy to the two companies to extended fibre infrastructure across the country under the programme.
However, the NCC boss says that the regulator is not neglecting mobile broadband as NCC was already working on the planning and allocation of frequency spectrum expected to be thrown open when broadcasters migrate in 2015 to be made available for use on the Long Term Evolution (LTE) network standard.
Juwah says that huge amount of 2.5GHz frequency band, currently in custody of the broadcasting industry, will be thrown open after the 2015 migration following a directive by the Federal Government, through the Frequency Management Committee and the NCC is already working ahead to ensure that they are allocated for mobile broadband.
Juwah’s disclosure comes just as USPF says that it has implemented its Rural Broadband Initiative (RUBI) in 18 Local Government Areas (LGAs) to facilitate easier access to high speed internet. According to the Fund, the RUBI project facilitating the roll-out of broadband services to unserved and underserved areas was targeted to provide 109 RUBI initiatives across senatorial zones in the country under its 2007-2011 plans.
According to a draft management plan covering the next five years between 2013 – 2017 released by USPF, it also reviewed its projects over the last five years noting that it has covered considerable ground in some its projects including the Community Communication Centers (CCCs) planned to provide shared access to telephone and internet services in rural areas.
USPF says it has subsidized a total of 224 CCCs across the six zones of Nigeria achieving 77% of their set targets of building 291 CCCs across the six geo-politcial zones across the country.
On the other hand, USPF has awarded subsidies for 74 BTS while 62 of these have been implemented and 12 are in progress representing 12% of set targets of 490 BTS under the Accelerated Mobile Phone Expansion – Base Transceiver Station (AMPE-BTS) project aimed at subsidizing the construction of Base Transceiver Stations in underserved and un-served communities, within the same time frame, the Fund says.
On the other hand, USPF says it has subsidized the establishment of 104 CIPs representing 69% of the planned targets of 150 CIPs under its Accelerated Mobile Phone Expansion – Co-location Infrastructure Project (AMPE-CIP) aimed at encouraging/ subsidizing the construction of shared telecoms infrastructure for co-location of telecoms operators.
The USPF says it has recently concluded the process for the BTRAIN Pilot Project that will achieve the initial deployment of 500km of fibre out of the 1000km of fibre backbone infrastructure under its Backbone Infrastructure Project (BTRAIN) aimed at providing subsidy to accelerate the build-out of backbone transmission infrastructure to all local government areas in Nigeria.
Also USPF says that SAP has been rolled out to 766 government schools representing 41% achievement of 1,858 schools targeted under its School Access Project (SAP) aimed at providing public schools with ICT hardware and funding subscriptions for broadband internet for at least one year.
In addition, USPF also says TiAP has been rolled out to 193 tertiary institutions across the country targeting 374 tertiary institutions under the Tertiary Institution Access Project (TiAP) to provide tertiary institutions with ICT hardware and funding subscription for broadband internet for at least one year.
Meanwhile the Fund’s e-Library project has been deployed to 74 libraries across the country under the project to provide internet connections to public libraries and institutions in underserved/ unserved areas across the country, USPF says.
In a post-mortem of its activities, USPF says experience “over the past five years and the lessons gleaned from the review of the USP service delivery models in other jurisdictions have indicated that USP projects implemented in rural areas are often difficult to sustain due to high costs associated with operating these projects.”
According to USPF, “in a number of cases, operational costs have been known to outweigh the initial capital outlay required for implementing USP projects. Consequently, the USPF will ensure its subsidies take into consideration operational costs associated with running USP projects over a defined period. This is expected to provide service providers with a “grace” period within which they will have built up a stable clientele and established demand for the service being provided. The period over which operational support will be granted will be determined based on assessment of the time required for each project to generate revenues capable of meeting its operational costs.”