Business

Leveraging infrastructure sharing for improved service

Nigeria is in dire need of more telecommunications infrastructure to connect all its citizens. However, to achieve efficiency with the existing facilities, the telecoms regulator is encouraging collaborations among the players with the release of guidelines on infrastructure sharing and co-location. SAMSON AKINTARO reports

Last week’s declaration that only 50.3 per cent of Nigeria’s geographical areas are covered with 3G networks brought to fore the reality of telecommunications infrastructure in the country. This showed that despite the years of investments by the telecom operators, they are yet to cover the vast landscape of Nigeria with the needed infrastructure. However, the industry’s regulator, the Nigerian Communications Commission (NCC), which is not oblivious of the infrastructure gap, has been embarking on several initiatives aimed at bridging this gap and getting more Nigerians connected. One of such initiatives is the encouragement of infrastructure sharing and co-location among operators. The regulator solidified its position on this recently with the release of guidelines for the operators on sharing.

Benefits of infrastructure sharing

According to industry experts, infrastructure sharing in the telecommunications sector limits duplication and gears investment toward underserved areas, product innovation and improved customer service. It has also been established that infrastructure sharing enhances competition among the operators and makes the market more attractive to new players for decreased entrance barriers. Corroborating this in a recent report, the Secretary-General of the International Telecommunications Union (ITU), Houlin Zhao, noted that sharing network infrastructure and services has steadily become more important than ever. “More and more companies are sharing the networks in order to lower costs, maintain profit margins and focus on innovative services to meet shifting customer demands. This dynamic requires unprecedented collaboration. “Incumbent mobile network operators are increasingly working with mobile virtual network operators and enablers, tower companies, Internet companies — and a growing range of different industry and public-sector players. “The increase in telecoms infrastructure sharing has allowed for a more efficient roll-out of next-generation networks. The sharing of towers and other passive equipment also translates into the sharing of expertise and best practices,” he said.

Current challenges

According to the Chief Executive Officer of MainOne, Funke Opeke, one of the major challenges confronting telecommunications in Africa and, Nigeria specifically, is the concentration of infrastructure in major cities. She said that major cities continue to receive the majority of telecoms investments while developing areas were neglected because they do not constitute a promising market. Citing an ITU report, Opeke said operators’ infrastructure investments in Nigeria alone totalled $68 billion as of July 2016. “However, these investments belie the infrastructural deficit in Nigeria. Most of the existing terrestrial fiber is centered in Lagos, Abuja and a few other cities and the major highways interconnecting them. This makes development uneven. “Furthermore, there is limited infrastructure-sharing across the market, manifesting in multiple fiber transport networks operated by different companies serving the same high-traffic areas. “Many Nigerians, particularly those in remote areas, must rely instead on other technologies such as satellite and microwave for access to mobile base stations, and these services come at a high price” she said. To address this issue, Opeke said: “It’s becoming clearer that information and communication technology (ICT) players will have to come together more to share network infrastructure and services. “Indeed, with continued erosion of profit margins, as well as average revenue per user shrinking yearon- year and encroaching freemium services, network sharing appears increasingly inevitable if African operators are going to survive.” Similarly, research conducted by the Emerging Technologies Research Unit of NCC’s Research and Development Department has established that the current infrastructure base in Nigeria is grossly inadequate in terms of capacity and quality and is not capable of catering to the anticipated industrial development. This situation is said to be forcing telecommunications operators to incur extra costs in delivering their services to Nigerians. These costs are in turn passed to the consumers, which leads to high tariffs for telecommunications services. According to the report, the four mobile network operators, MTN, Glo, Airtel and 9mobile, jointly power over 22,000 base transceiver stations with about 44,000 generators. “In addition, the operators also have to provide security for their equipment, which has not stopped hooligans from stealing the generators or the diesel as these operators lose about two generators and over one million liters of diesel daily,” the report stated. The report noted that Nigeria had a huge infrastructure deficit, particularly with regard to power generation, Internet access, roads, and limited access to qualified human capital. The finding of this study identified the following infrastructural factors as affecting technological development in Nigeria: inadequate power supply; the public electricity power supply situation must improve urgently for Nigeria to enjoy the full benefits accruable from both wired and wireless telecommunications deployment. All these challenges, according to industry analysts, point to the need for an embrace of infrastructure sharing and co-location in the telecoms sector.

NCC’s guidelines

NCC said the new Guidelines on Co-Location and Infrastructure Sharing will further allow operators a more robust, competitive environment for active infrastructure sharing (AIS) and to co-locate network equipment as the telecom regulator pushes ahead to get operators to reduce the cost of production and offer more enhanced services. The new guideline is expected to eliminate unnecessary duplication of infrastructure and reduce the proliferation of facilities installations. The regulator said it also seeks to promote fair competition through equal access being granted to the installations and facilities of operators on mutually agreed terms. Part of the regulator’s goals is to ensure non-discriminatory and transparent pricing for AIS as pricing must be reasonably based on the actual costs incurred by the owner of the facility. The “guidelines are designed and developed to encourage co-location and infrastructure- sharing between Access Providers and Access Seekers within a predetermined framework to remove uncertainty and create an environment for better co-operation,” the regulator state in the 31-page document. Under the new deal, an access provider may only exercise the right to refuse an application for infrastructure sharing by another player when it lacks the capacity to carry the traffic of the applicant. Among others, the guidelines state: “The ground for refusal of sharing under these rules will be insufficient capacity, compatibility and prior indebtedness under other services such as Interconnection. The infrastructure provider shall inform the infrastructure seeker and the commission of the grounds for refusal with adequate data within five working days. “Any disagreement on commercial terms during negotiation for active infrastructure sharing, which parties are unable to agree on, shall be referred to the Commission for resolution, and the decision of the commission shall be binding on parties. “Meeting the roll-out obligation as spelt out in an NSP’s Licence Condition is a precondition for entering into an Active Infrastructure Sharing agreement. “However, where it is established by the Commission that Active Infrastructure Sharing will expedite such roll-out, the Infrastructure Provider may grant such request.” According to the guidelines, active infrastructure sharing is subject to specific conditions and approval of the NCC. They include: “The Commission shall in reviewing infrastructure sharing agreements ensure that the terms on which infrastructure sharing is offered comply with the principles of neutrality, transparency, non-discrimination, and fair competition.”

National roaming

The guidelines go hand-in-hand with the commission’s national roaming initiative, which was also recently launched. Industry experts have hailed NCC for implementing national roaming services in the country, noting that the initiative has the potential of promoting seamless communication of subscribers as they will be able to roam on the network of other service providers where their service provider is unavailable or has limited network coverage, while there will be a noticeable reduction in network deployment costs when active infrastructure sharing is encouraged. Apart from having a noticeable reduction in network deployment costs, the telecom industry will also witness an acceleration in the take-up of broadband services and the gradual elimination of the rural-urban digital divide. To ensure that these benefits are realised, Danbatta had recently advised that pertinent issues such as Quality of Service, Mobile Number Portability, issues of fair competition, billing and reconciliation, appropriate roaming agreements, the extent of regulation required, and the need to continue to incentivise operators to roll out infrastructure in underpopulated areas must be addressed. The service is also expected to create an extra source of income for the mobile network operators, while they would be spending less on investment since infrastructure sharing divides the investment burden among the operators rather than being shouldered by a single operator. This also makes it easier for new players to enter the market and compete favourably as they would be able to ride on existing networks in areas where they are yet to deploy their infrastructure while promoting universal service provision.

Last line

While the challenge of inadequate infrastructure may take a while to be fully addressed, the telecoms regulator is cushioning the effect with its dynamic initiatives aimed at getting the best from the existing infrastructure. The laudable efforts of encouraging network sharing among the operators and national roaming will, no doubt, deepen telecoms’ growth in the country.

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