Federal Government frowns at increase in telecom fibre charges by states

The federal government has expressed dismay over increment in charges for laying of telecommunication fibres, known as Right of Way (RoW) by some states of the federation.

According to a report by THISDAY newspaper, Lagos, Kano, Anambra, Ondo, Cross River, Kogi, Osun, Kaduna, Enugu, Adamawa, Ebonyi, Imo, Kebbi and Gombe, are the states who jerked the cost of the RoW fees for telecoms infrastructure.

In a statement signed by the Minister of Communications and Digital Economy, Isa Pantami, the government said the increase contravened an agreement reached at the National Economic Council (NEC).

State governors are also members of NEC which is the highest economic policy body of the country. It is headed by the vice president.

The communications minister said the increment is detrimental to the government’s digital economy agenda.

Mr Pantami said it was “disheartening to hear that some States have decided to disregard these resolutions and have, in some cases, increased the RoW charges by over 1,200%. This will no doubt impact negatively on the efforts’ being made by the federal government.

“It is established that there is a strong correlation between a country’s broadband penetration and its Gross Domestic Product (GDP). An ITU study on Africa indicates that a 10% broadband penetration would result in an increase of 2.5% of GDP per capita.

“We are therefore calling on all state governors, especially those that have made public their decisions to increase the RoW charges, to reconsider these decisions in the interest of Nigerians as well as for the socio-economic growth and development of the country.”

The statement explained that the NEC had in 2013 set up a committee comprising state governors and ministers to review the issues of multiple taxation in the telecommunications industry in Nigeria and its impact.

“The committee, after extensive and wide-ranging consultations, resolved to harmonize the taxes applicable to broadband related activities and streamline the taxation management processes across the Federation.

“Specifically, to deepen broadband penetration for the social and economic development of the country, the Committee agreed to the uniform Right of Way (RoW) charge of N145.00 per linear meter of fibre.

“It may also be recalled that in October 2019, we had written to all the state governors, drawing their attention to these resolutions and soliciting their support and collaboration towards the realisation of the National Digital Economy by fast-tracking the deployment of broadband infrastructure for the provision of affordable internet services to underserved and unserved areas.”

State governments defend action

When contacted by PREMIUM TIMES, spokespersons of some of the states defended the action, giving reasons why the increase was justifiable.

The Commissioner for Information, Cross River State, Asu Okang, said it was prepared to go into negotiations with telecommunication companies on the possible adjustment of charges they pay for RoW to install infrastructure, particularly telecommunications masts.

However, the state government did not state if the negotiations with the telecommunications service providers would lead to a reduction in the cost they are currently being charged for the location of their masts.

The official said the state was open to negotiations on the issues raised by the companies.

The commissioner said despite the complaints from telecommunications service providers, the rates charged by Cross River State was lower than those charged by its neighbouring states.

He said the rates charged by the state was within those prescribed by the federal government, adding that the telecommunications companies, of recent, had not been building new masts, but rather adopted the policy of co-location.

Also, the Senior Special Adviser to the governor of Ondo State on Information and Telecommunications Technology, Olumbe Akinkugbe, said the agency had designed a policy that could reduce cost of operations for the telecommunication companies.

Mr Akinkugbe, who is in charge of State Information and Technology Agency (SITA), however, said the companies had to be open about their infrastructural needs and their plans to achieve same.

He said at the national level, the federal government had also established Broadband Infrastructure Rollout Plan, which has resulted in infrastructure companies being given concessions for RoW nationally, that had been broken into regions.

“What we are planning to do is to encourage what we call ‘One Dig Policy,” he said.

“One dig policy is a situation whereby we partner with reliable organisation to actually develop a fiber rollout plan on these right of way at a discounted rate such that when various telecoms operators are coming in there is already a laid down path as well as dug,” he explained.