568 ISPs inactive as operators seek CBN’s intervention on forex

The Nigerian Communications Commission (NCC) has revealed that 568 Internet Service Providers (ISPs) have become inactive to date.

The Executive Vice Chairman, NCC, Prof. Umar Danbatta, who disclosed this, informed that a total of 756 companies had been licensed as ISPs in Nigeria as of March 2022, but only 188 of them are currently active.

At a Telecoms Sector Sustainability Forum organised by Business Remarks, in Lagos, with the theme: “Examining the Nigerian Internet Service Providers (ISPs) Viability in a Digitised Environment,”Danbatta said several issues including inadequate spectrum, high price of bandwidth, high cost of Right of Way, and lack of good corporate governance practice in some of the companies have contributed in some of the licensed operators becoming inactive.

While noting that efforts are being put in place by the regulator to address the issues, Danbatta said: “As a result of these challenges, deliberate policies and regulations are being looked at in the Commission in ensuring that ISPs and other smaller players in the industry thrive. Some of the measures the Commission has embarked upon to continue to promote fair play and orderly development of the Nigerian communications ecosystem as well as boost competitiveness of the industry include providing the required regulatory frameworks and interventions in terms of policies, guidelines, determinations, among others, that will encourage fair play in the telecommunications industry.”

However, some ISPs, which were at the event, sought the intervention of the Central Bank of Nigeria (CBN) to access foreign exchange (forex) to boost their operations and resuscitate the sub-sector.

They also want the Federal Government to grant them waivers and uniform payment for right of way (RoW) with the tier one players in the industry.

Divisional CEO, ipNX Business, the Enterprise Business Division of ipNX Nigeria Limited, Segun Okuneye, said outbreak of COVID-19 pandemic and subsequent global lockdown proved the importance of ISPs as the Internet became the lifeline for businesses to continue.

He said ISPs are the gateway to the world, adding that if the challenges facing the sector such as harsh business operating environment, access to capital, and limited access to forex are addressed, ISP is a profitable business.

Okuneye wondered why ISPs were shut out of the CBN forex window and sought the quick intervention of the apex bank to access forex. He also appealed to the Federal Government to grant waivers on imports to bridge the yawning infrastructure gap in the country.

He said all the submarine cables with a humongous terabytes of data are landed at the shores of Lagos, saying the challenge is the last mile infrastructure to take them to users in the hinterlands.

He called for a level playing field and backed it up with regulation to allow tier 1 players and ISPs to compete. The lack of this, he said, is threatening the existence of ISPs.

He lamented the frustrations with securing right of way (RoW) to expand infrastructure capacity. While he commended some states keyed-into the harmonised cash payment for RoW, he lamented that some states still charge N3000 per meter.

Vandalism is another challenge Okunneye identified. He said the last two years have been challenging in Lagos because of the level of construction work going on across the state.

Expressing his views, the Chief Executive Officer of Dotmac Technologies, Michael Ayoade tasked ATCON for more advocacy as regards issues militating against their survival and growth in the industry.

According to Ayoade, ISPs are charged a higher rate than others for RoW in most states. Using Lagos State as an example, he said license operators pay a cheaper rate compared to ISPs, who are charged ten times more than the agreed N145 per meter rate linear for RoW.

He said ISPs lack unified backup to fight their cause and push for the agreed rate from the state government and taxes demanded by the Federal Inland Revenue Service (FIRS).

Speaking on improving quality of service through laying of fibres and cables, Ayoade emphasized that without ATCON speaking for them in the industry, the cost overhead carried by individual companies for survival will eventually lead to their untimely death.

“Collaborations among ISPs is important but not very straightforward because each Internet Service Provider determines their price structure through cost incurred, keeping manpower and other business risks.”

On his part, the Managing Director for MangoNet Integrated Technologies, Tony Emoekpere, said the ISPs sub-sector is too fragmented to scale up. He berated the fact that ISPs players are close to 1000 in number.

Emoekpere said this shows that indigenous players do not understand the market terrain.