Telecoms growth in Nigeria supported by reforms and infrastructure

Although it has faced several challenging years, with rapid currency depreciation and a macroeconomic slowdown weighing on profitability, Nigeria’s ICT sector remains a critical non-oil growth driver and major contributor to the economy, supported by a sizeable young population and the rapid adoption of mobile internet services. Dominated by four large mobile operators, the telecoms industry remains on a steady growth trajectory, as rising smartphone penetration and investment in mobile internet networks supports a shift towards data-driven growth models. In the IT sector, government efforts to boost broadband penetration have begun to gather steam, although the country will face a number of challenges in achieving its ambitious mid-term expansion targets owing to issues in deploying new fibre-optic infrastructure.

Rapid mobile growth has also entailed a series of new regulatory challenges, as industry watchdog the Nigerian Communications Commission (NCC) moves to implement reforms aimed at improving consumer protection and national security, as well as ensuring more equitable distribution of telecoms’ economic benefits. These efforts, which include rolling out mandatory SIM card registration and pushing dominant player MTN Nigeria to launch an initial public offering (IPO), should help support stable long-term growth.

Some criticisms Nigeria continues to face are concerned with high business costs and a burdensome tax regime. Industry players are also critical of the decision by the Central Bank of Nigeria (CBN) to restrict operators from offering mobile money services. Despite the CBN and the NCC agreeing in November 2017 to allow operators to offer mobile money services through a special purpose vehicle, as of late October 2018 telecoms firms were still unable to offer the service directly.

Regulation 

ICT development has accelerated rapidly in Nigeria since 1999, when the country had just 400,000 fixed telephone lines and less than 200,000 regular internet users. In 2000 the government began to liberalise the sector and launched the National Telecommunications Policy (NTP), followed by the Nigerian Communications Act (NCA) in 2003, which brought the NTP into legal force. Under the NCA, the NCC acts as the sector’s independent regulatory authority, whose responsibilities include facilitating the entry of private players into the market, creating an enabling regulatory environment, promoting fair competition and market efficiency, and establishing the Universal Service Provision Fund to support telecoms expansion in rural areas. Today, private firms can be licensed to provide services such as fixed and cellular telephony, long-distance transmission, global mobile personal communications, international data access, high-speed data transmission, value-added services, internet and unified access.

The National Information Technology Policy (NITP) was established in 2001 to guide IT development, and in 2007 the government established the National Information Technology Development Agency (NITDA) to implement its IT policies (see IT chapter).

In 2011 the Ministry of Communication Technology (MoCT) was created to oversee a host of government entities active in the sector, including the NCC, NITDA and the Nigerian Postal Service. Two government-owned communications companies – Nigeria Communications Satellite and Galaxy Backbone – were also brought under the MCT’s purview.

Market

Nigeria’s first GSM technology was launched in May 2001, when South Africa’s MTN established its Nigerian subsidiary, MTN Nigeria. In August that year Econet, now Airtel, also launched its own Nigerian subsidiary. Globacom Nigeria entered the market in August 2003, to be joined by Etisalat, now 9mobile, in October 2008. MTN Nigeria is the largest mobile operator in the country in terms of the number of users, with a market share of 40% as of August 2018, followed by Globacom and Airtel at 25% each, and 9mobile at 10%.

Telephone penetration has risen sharply over the past few years, with the NCC reporting that total number of telephone connections jumped from 101.8m in May 2012 to 148.9m in May 2016. Total telephone connections fell after the NCC moved to enforce regulations mandating SIM card registration, with the commission putting the figure 139.4m in August 2017. However, this was followed by a 15.4% upswing through to August 2018, when the total connections hit 160.9m.

Accordingly, Nigeria’s telephone penetration rate stood at 114.9% in August 2018, which was calculated by the NCC based on the 2006 census population estimate of 140m citizens. More recent data from the IMF in August 2018 estimated Nigeria’s population for 2018 to be around 194m, which would mean that the telephone penetration rate was actually about 85.3%.

GSM technology held the largest market share as of August 2018 with 99.7%, followed by CDMA connections, fixed wireless and wired connections, and voice over internet protocol (VoIP) services, which each held a market share of 0.1%, according to the commission.

Economic Contribution

Supported by robust mobile uptake and rapid expansion of mobile internet services, Nigeria’s ICT sector has risen to become a major non-oil growth driver. However, in recent years the National Bureau of Statistics reported that the contribution of the telecoms and information services sector at constant prices fell from N6.1trn ($19.7bn) in 2016 to N5.9trn ($19.1bn) in 2017, equal to 8.7% of GDP.

In April 2018 local think tank and NGO BudgIT Nigeria reported that in 2017 the ICT sector contributed N8.6trn ($27.8bn) to the economy, which was supported by the rapid uptake of smartphones and mobile internet. BudgIT noted, however, that with 51.4% of the population living in rural areas, and limited ICT infrastructure outside of major urban centres, there is still plenty of room for improvement.

The commission has also indicated the ICT industry’s role in accelerating economic activity, noting that the sector’s contribution to GDP reached an eight-year high of 9.2% in the first quarter of 2018 with N1.5trn ($4.8bn). In the following quarter the ICT sector rose by 13.1% year-on-year and accounted for 8.2% of GDP.

Currency Challenges

The telecoms sector has struggled to maintain profitability against a challenging economic backdrop, with rapid currency depreciation and a rising tax burden posing a challenge in recent years, on top of increasing debt levels straining operators. Etisalat first entered Nigeria’s telecoms market when it acquired Alheri Mobile Services in December 2010. The company grew its subscriber base from 2.3m in 2011 to a peak of 23m in 2013, although mounting debt levels exacerbated by rapid naira depreciation and a severe foreign exchange shortage pushed the firm to default on a $1.2bn loan in March 2017, which was signed with 13 Nigerian banks four years prior.

The NCC, parent company Etisalat and the UAE’s foreign investment arm Mubadala intervened in an effort to restructure the debt, but Mubadala later exited the company, and Etisalat confirmed it would exit the Nigerian market in July 2017. Etisalat Nigeria was rebranded 9mobile in the same month, with companies including Globacom, Airtel, Tanzania’s broadband services provider Smile Communications and special purpose vehicle Teleology expressing interest in purchasing the company. Teleology made the winning $500m bid, paying a $50m deposit in March 2018, although the Federal High Court Abuja suspended the sale in the following month, pending an investigation into Etisalat’s default. In July 2018 local media reported that Teleology had requested a 20-day extension to make the remaining $450m payment for the acquisition, and in the following month the company received clearance for the acquisition of 9mobile by the NCC and the CBN.

MTN Nigeria has also been significantly impacted by the recent recession and rapid currency depreciation. The company is one of the largest revenue generators for its South African parent company, which reported that revenues from its Nigerian arm stood at R36bn ($2.8bn) in 2017, equal to 27.2% of total revenue that year. MTN’s Nigerian operations were impacted by currency depreciation in 2017, however, with revenues falling by 23.6% from R47.1bn ($3.6bn) in 2016, as the naira depreciated by 11.4% against the South African rand. MTN Group reported that total capital expenditure in Nigeria rose from R8.7bn ($671.9m) in 2016 to R9bn ($695.1m) in 2017, although 2018’s planned capital expenditure was forecast to fall to R6.92bn ($532.9m).

SIM Registration

In addition to currency depreciation, MTN was also impacted by a major fine imposed by the NCC for failure to deactivate unregistered SIM cards. In November 2007 the House of Representatives announced plans to investigate SIM card registration practices within the mobile industry. A parliamentary report released the same month criticised the NCC for failing to crack down on operators selling services they did not offer, although the commission had already censured three firms for failing to ensure their networks provided adequate coverage for all mobile users.

In April 2009 the NCC announced it would implement a mandatory SIM card registration process for all GSM SIM cards, beginning in July 2009, with the aim of improving safety and security standards. The NCC reported that all SIM cards that had not been registered by December 2009 would be disconnected in early 2010, although the registration process had still not commenced by then, with the NCC announcing it would begin SIM registration in March 2010. The programme launched in March 2011, with the final deadline for SIM registration eventually extended from September to the end of the year. In April 2011 the NCC reported it had registered 93m SIMs, and in December 2011 the House of Representatives announced it would launch an investigation into the SIM card registration process, which was estimated to have cost N6.1bn ($19.7m).

Registration challenges persisted, and in May 2013 the NCC announced it had fined Nigeria’s big four operators a combined N54.8m ($177,200) for violating its 2011 Registration of Telephone Subscribers Regulations by selling pre-registered SIM cards. The registration programme of old SIMs concluded at the end of June 2013, after which all unlicensed SIM cards were to be disconnected. In September 2014 the NCC announced it had disconnected 7.7m SIM cards in June 2014 alone, and in August 2015 the regulator announced it had blocked an additional 10.7m SIM cards that had been incorrectly or improperly registered, following an earlier monitoring exercise and investigation.

In October 2015 the NCC suspended regulatory services for MTN Nigeria, announcing it had fined the company N1.04trn ($3.4bn) for failing to meet a deadline to disconnect 5.1m unregistered users, although this was later reduced to N780bn ($2.5bn). MTN made a N50bn ($161.7m) payment in good faith, part of a commitment to pay the NCC N330bn ($1.1bn) over three years, after dropping a lawsuit against the NCC in February 2016, and regulatory services were restored the following month. MTN Nigeria reported that it spent R1.1bn ($85m) on NCC fine payments in 2017.

IPO

As part of the agreement to lower its SIM card registration fine, MTN Nigeria committed to launching an IPO on the Nigerian Stock Exchange (NSE). Indeed, international media claimed in July 2016 that all of Nigeria’s mobile operators were coming under increased pressure to list, owing to perceptions of unfair profit repatriation and concentrated equity ownership. Although depressed market conditions have delayed MTN Nigeria’s planned listing, MTN Group’s 2017 annual report stated that MTN Nigeria was making “good progress” in preparing for its NSE listing, including launching extensive local marketing campaigns targeting Nigerian investors to support a retail offer and institutional book building. The company reported this could also involve “selected international institutions”, with a listing expected during 2018, although it noted that the IPO is “subject to appropriate market conditions and requisite regulatory approval”.

An IPO framework is gradually coming together, with MTN Group reporting in early 2018 that MTN Nigeria has engaged with the Securities and Exchange Commission and the NSE to establish the listing’s structure and parameters, in addition to obtaining shareholder approval for corporate structural reforms necessary to list. It plans to list on the NSE’s premium board, with the group stating that its ownership reduction in MTN Nigeria “is expected to be limited”. In February 2018 international media reported that MTN Group planned to list MTN Nigeria in July that year, estimating the Nigerian subsidiary’s value at $5.2bn, with its IPO expected to raise at least $400m to pay preference shareholders.

In July 2018, however, the SEC reported that MTN Nigeria had yet to file its IPO application, noting the company must convert itself from a private to public company prior to selling shares. MTN Nigeria is also planning to issue shares electronically, a first for Nigeria, although the SEC stated that the telecoms firm had not made any requests for regulatory reviews to permit such a listing. Nigerian investment firm Chapel Hill Denham will be lead manager of the planned IPO, and South Africa’s Rand Merchant Bank, Russia’s Renaissance Capital and local Vetiva Capital will act as joint issuers. Though mandated by the NCC to list before May 2019, doubts about whether MTN would list on the NSE have been cast following the central bank’s request in early September 2018 that the telecoms firm refund the illegal repatriation of $8.1bn.

Mobile Termination Rate Reform

The NCC has taken steps to help operators mitigate economic and currency challenges. In September 2016 the commission announced it planned to adjust mobile termination rates (MTR), defined as charges levied on one operator from another for calls terminating on its network, for international inbound traffic. Rates soared from N3.90 ($0.01) per minute to N24.40 ($0.08) for all licensed telecoms companies in the country, with the hike in MTR fees described as an interim measure while the NCC concluded a study examining cost-based MTR pricing.

When formulating the 2016 MTR regime, stakeholders were grappling with rapid currency depreciation – the naira fell by more than 30% after the CBN removed a currency peg in June 2016 – that had forced Nigerian network service providers to become perpetual net payers to their overseas interconnecting partners, leading to the NCC’s decision to adjust rates upwards. The move won praise from Olusola Teniola, president of the Association of Telecoms Companies of Nigeria (ATCON), who told OBG that low inbound MTRs combined with the naira’s sharp depreciation had left Nigerian operators at a disadvantage.

In June 2018 the NCC announced that any 2G, 3G, or 4G operator holding more than a 7.5% share of the mobile voice market would pay a MTR of N3.90 ($0.01) per minute as of July 1 that year, while new LTE operators – those active in the market for less than three years – would pay a MTR of 4.70 ($0.02) per minute. The international MTR of N24.4 ($0.08) will remain in effect.

Although the changes are welcome news for local operators, Nigeria’s voice market offers limited potential for growth as Nigerian consumers increasingly embrace over-the-top and VoIP platforms to communicate, with mobile data holding better opportunities given current consumer trends. For example, MTN Nigeria reported that data revenues soared by 32.2% in 2017 from R3.3bn ($254.9m) in 2016 to R4.4bn ($339.8m), while mobile internet accounts for the vast majority of internet subscribers in the country.

Mobile Payments

The shift towards data has taken regulatory disputes into the arena of mobile payment services, with mobile operators increasingly arguing that mobile money services will be a critical pillar for long-term growth, pushing for the CBN to open the industry to telecoms companies. In March 2018 the CBN announced new plans to boost financial inclusion in the country to 80% by 2020, with an emphasis on mobile payments and mobile money platforms.

However, while there were 21 licensed mobile money operators active in the country as of July 2018, telecoms firms remain excluded from mobile money service provision as the CBN has limited these services to the banking sector. This has been cited by some as one of the primary reasons Nigeria has lagged behind other major African mobile money hubs, such as Kenya and Tanzania, in expanding mobile money penetration. Indeed, some see Nigeria’s nascent mobile money scene as an opportunity for growth of the financial services industry. “Nigeria’s teledensity has been on a continuous upward trajectory since the introduction of mobile communication technology,” Efe Irabor, coverage and corporate banking analyst at FBNQ uest Merchant Bank, told OBG. “In the first half of 2018 there were about 162m active lines to a population of around 195m, with the significantly high unbanked population demonstrating opportunities for growth within the financial services sector. The penetration and delivery of financial services could increase through innovative technology solutions, as well as with further development of the financial technology sphere. The widespread adoption of unstructured supplementary service data (USSD) applications and other mobile solutions to facilitate bank account opening and transaction settlement is testament to the aforementioned opportunity.”

Nigeria’s first licensed mobile money platform, Paga, launched in September 2010. Since then, dozens of new operators have entered the market, including Teasy, Cellulant, eTranzact, fets, ReadyCash, and add-on banking services such as GT Mobile Money. According to local media in May 2018, Paga has risen to become the largest by market share, with more than 8m users at the end of 2017, and 42.7m transactions valued at N660bn ($2.1bn) carried out since it launched. The company’s agent network was identified as its main growth driver, with more than 15,000 agents offering services across the country. Meanwhile, NITDA reported that the value of online transactions made in the country between 2014 and 2017 rose by 204% to hit N16.5bn ($53.3m).

As part of its plan to meet its bold inclusion targets, the CBN announced plans to establish the Shared Agent Network Expansion Facilities, a network of 500,000 shared agents by 2020 targeting 60m unbanked and underbanked Nigerians, including those living outside of major urban centres where banking infrastructure remains limited (see Banking chapter). However, telecoms companies have criticised the plan, which was unveiled in March 2018, arguing that the industry’s agent network far exceeds mobile money agents and questioning how the central bank plans to incentivise mobile money service provision given the limited potential for agents to earn profits from the service. Vendors selling airtime would receive a bulk discount on the credit they purchase, enabling profit margins of between 5% and 6%. The same situation would not be possible for mobile payments.

Mobile phone operators are also better placed to serve a larger portion of the country’s population. “Mobile money expansion requires more bank verification numbers (BVNs) connected to a secure USSD interface, as those two parameters are closely correlated,” Teniola told OBG. “The CBN is in control of the BVN database, even though telecoms companies actually have more devices and hence more registered SIM cards than the number of BVNs that exist in the country. The very nature of the numbers and the data suggests it would be much easier to access mobile payments through mobile operators. This would also enhance the robustness of the USSD application interfaces.”

Next-Gen Broadband

The mobile payments issue is likely to become more pressing as a growing number of citizens subscribe to next-generation mobile broadband internet. Nigeria’s young, data-hungry population has supported an acceleration in internet adoption, with mobile internet services rising to become the driving force behind ICT growth in the country. Nigerian mobile operators have been quick to embrace next-generation mobile broadband development, although high-speed broadband penetration remains below the government target of 30%, and 4G/LTE coverage is still limited due to significant infrastructure deficits.

Nigeria’s state-owned telecoms company Nigerian Telecommunications (NiTel), which was liquidated in 2014 and acquired by NATCOM Consortium in 2015, announced plans to launch 3G services as early as mid-2005. Next-generation mobile broadband development began in earnest until March 2007, when MTN Nigeria, Globacom, Alheri Mobile Services and Airtel, then known as Celtel, paid $150m for a 3G licence.

The MoCT reported in January 2015 that it expected 3G coverage would reach half of the population by the end of that year, and 80% of the population by the end of 2017, in accordance with the mid-term targets laid out in its Nigerian National Broadband Plan (NNBP) (see IT chapter). Mobile broadband development has continued steadily in the years since, with Globacom becoming the first telecoms company to launch 4G/ LTE services in Lagos in January 2011. Airtel began piloting 4G/LTE services in December 2012, followed by pan-African operator Smile Communications, which launched 4G/LTE services in Ibadan in the first quarter of 2013. MTN Nigeria upgraded its WiMAX network to launch 4G/LTE services in July 2015, and in December 2015 MTN Nigeria acquired Visafone Communications for R3.3bn ($254.9m), a deal that included two 10-MHz bands of 800-MHz spectrum, on which it planned to distribute its 4G/LTE services.

Although the NCC approved Visafone’s request to transfer 100% of its shares and subscriber base to MTN Nigeria in October 2016, the regulator announced in June 2018 that it would launch a public inquiry into the Visafone acquisition. As of late October 2018 Visafone Communications’ request to transfer its spectrum to MTN Nigeria was still pending.

In the same month local service provider Bitflux Communications announced plans to launch an LTE network in Lagos after making a winning bid of $23.3m for a 2.3-GHz spectrum license in the previous year.

BIG 4G: In December 2015 local media reported that Nigeria’s big four operators were set to roll out their first commercial 4G networks by 2017. At the beginning of 2016 NATCOM Consortium announced that its NiTel subsidiary Mtel, now Ntel, planned to launch 4G/LTE services in Abuja, Lagos and Port Harcourt – which was achieved by the end of the year – and that it had invested over $1bn into the firm since acquiring it.

Globacom became the first telecoms provider to launch commercial LTE services in October 2016, when it began operating a 4G network in Lagos, Port Harcourt, Abuja, Jos, Warri, Eket, Bening City, Yola and Zaria. The multinational company now has one of the largest 4G networks in the country, spanning across 60 locations as of November 2016.

In the same month MTN Nigeria and Etisalat announced the commercial launch of their own 4G networks, with MTN Nigeria reporting that its coverage included Lagos, Abuja and Port Harcourt, while Etisalat’s broadband network technology was limited to Lagos.

Airtel Nigeria was the last of the big four to launch its 4G/LTE network, announcing in April 2017 that it had partnered with China’s ZTE to deploy the service, which officially rolled out in Ibadan in February 2018, before expanding to Abuja in May that year.

In November 2017 the NCC announced plans to hold auctions for spectrum on the 700-MHz and 2600-MHz bands, in an effort to support expansion of high-speed internet services nationwide. The 2500/2600-MHz spectrum will be used for 4G/LTE services. This is expected to help to support mobile broadband growth, although major infrastructure gaps and limited development of domestic fibre-optic cable networks pose a notable challenge to future growth.

Internet Growth

Investment in next-generation mobile broadband networks has supported rapid growth in internet penetration, with the NCC reporting that the total number of mobile internet subscribers in Nigeria nearly tripled between January 2013 and January 2016 to 92.2m, before rising to 100.2m in January 2018 and 104.6m in August 2018. Mobile internet accounts for the majority of internet users in Nigeria. In August 2018 there were 66,144 CDMA subscribers, 12,602 fixed-internet users and 359,501 VoIP subscribers. CDMA services are offered by Multilinks and Visafone, while fixed services are offered by ipNX, MTN Fixed, 21st Century Technology and Globacom Fixed. Smile Communications and Ntel offer VoIP services.

Despite the rapid uptake of subscribers, there is still plenty of room for growth, particularly outside of the country’s major urban centres. In 2013 the government unveiled the NNBP, which seeks to boost broadband – that is, internet with speeds of at least 1.5 Mbps – penetration rates from 2012 levels of 4% to 6%, with the plan targeting a five-fold increase by the end of 2017. The country failed to reach this target, however, and while the NCC has made some strides in pushing forward network development, many stakeholders anticipate Nigeria will not meet its target of 30% broadband penetration by the end of 2018 (see IT chapter).

Infrastructure Companies

Entities tasked with deploying new fibre-optic infrastructure became part of the government’s telecoms policy in late 2013, when the NCC announced plans to license at least one company in each of Nigeria’s six geopolitical zones. According to the NCC’s “Open Access Next Generation Fibre Optics Broadband Network” report published in November 2013, these companies will be responsible for delivering fibre connectivity to network operators, supporting NNBP broadband penetration targets.

In January 2015 the NCC licensed two infrastructure companies: MainOne, in the Lagos region, and IHS Towers in the country’s north-central region. According to local media in June 2015, the decision was well received by industry observers because both telecoms infrastructure providers are major players with a proven track record. According to the NCC, the two companies would expedite broadband service delivery under an open-access model. This model was chosen because it enables infrastructure and ownership sharing, as well as encourages competition among market players, due to the fact that it divides the telecoms industry into wholesale and retail providers.

The progress of infrastructure companies was moderate until December 2017, when the NCC announced it had licensed two additional firms: Zinox Technologies, which will deploy broadband infrastructure in the country’s south-east region, and Brinks Integrated Solutions, which will operate in the north-east region. However, in March 2018 local media reported that, after more than two years since licensure of infrastructure companies was rolled out, Nigerians have yet to benefit from broadband expansion, with penetration stalling at 22% as of late October 2018.

Expansion Challenges 

Limited domestic network connectivity is a primary challenge facing infrastructure companies and broadband expansion in the country, and in November 2017 local media stated that Nigeria’s submarine cable system remains underutilised, largely as a result of limited fibre networks hindered by right-of-way (ROW) issues. This is despite significant levels of investment in infrastructure, including Ntel’s $600m South Atlantic 3 fibre-optic cable, MTN’s $650m West Africa Cable System, Dolphin Telecoms’ $700m Africa Coast to Europe cable, MainOne’s $300m cable and Globacom’s $800m Glo-1 cable.

Although Nigeria’s submarine cable system offers more than 19.2 TB of bandwidth potential, an anticipated surge in demand for e-services in governance, health, banking and education had not followed suit, according to local media reports in late 2017, despite rapid mobile internet adoption, with many cable investors citing subdued revenues and limited return on investment owing to domestic network constraints, especially fibre-optic cable networks.

According to Teniola, there is a “serious glut” in bandwidth supply in the wet segment – the seaward side undersea cable systems – of Nigeria’s fibre-optic ecosystem, while limited capacity to host data locally has left cable investors facing a long wait – up until 2030 – to see a return on their investment. MainOne Cables echoed this statement, stating that despite having made $1bn of investments in Nigeria, its cable has been running at just 10% capacity. Additionally, Teniola claimed that lack of a national fibre-optic backbone is one of the most serious growth constraints. However, the high cost of electricity, elevated security costs and chronic vandalism, and multiple levels of taxation at the state and local government level – ATCON reported 26 separate taxes and levies applied to the ICT sector, including 12 telecoms-specific taxes – are also weighing on network expansion. This has left fibre-optic networks concentrated in Lagos, Abuja and Port Harcourt, with limited coverage in Kano, Kaduna, Katsina and the country’s north-eastern regions.

To increase connectivity levels, the government is making moves to expand its fibre network. For example, in November 2017 the Ministry of Industry, Trade and Investment announced plans to install 18,000 km of fibre-optic cables across the country, in partnership with the Nigeria Industrial Policy and Competitiveness Advisory Council. In January 2018, however, the NCC reported that Nigeria still needs over 120,000 km of fibre-optic cables to boost broadband penetration, with just 38,000 km of cable having been laid to date.

Multiple stakeholders have pointed to ROW issues as the primary challenge facing fibre-optic deployment. A report published in April 2018 by Techpoint, a local start-up, estimated that infrastructure companies would have to pay a combined N600bn ($1.9bn) to 36 state governments in order to build a network capable of meeting the federal government’s broadband targets, with state governments requesting as much as N25,000 ($80.80) per metre of fibre optics laid along roads, water and power lines, against a recommended charge of N145 ($0.47) per metre.

Another major hurdle to improved broadband adoption has been slow licensing processes for these infrastructure companies. Although the government moved to license two new infrastructure companies in late 2017, lengthy delays to the process have significantly impacted infrastructure delivery. Delayed licensing had pushed the country’s broadband expansion plans back by up to 10 years, according to Teniola. “Until we get the infrastructure companies in place and get them connected to the five undersea cables in Lagos, we will not get this seamless process and best pricing of wholesale infrastructure available to the retail or ISP operators, and pass the cost to consumers,” Teniola told local media in December 2017.

Outlook

Although mobile operators remain constrained by infrastructure deficits, the ICT sector appears set to maintain a steady growth trajectory in the coming years. Regulatory reforms should help ensure better consumer protection and more equitable distribution of telecoms’ economic benefits, while ongoing government efforts to expand its fibre-optic network should offer the country significant economic dividends. Addressing ROW issues will be a critical next-step for industry stakeholders, as fibre-optic infrastructure is the lynchpin to robust long-term ICT growth.