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Nigeria needs $200b to develop broadband infrastructure

June 16, 2015 • Telecoms & Mobile, West Africa

By Kokumo Goodie, Lagos, Nigeria

For Nigeria to develop the requisite broadband infrastructure needed to take the country to the next level, the government needs some $200 billion between 2015 and 2019, foremost global consulting firm KPMG has said.

The firm said Nigeria has demonstrated a readiness to accommodate foreign investors who would only be required to plug into the existing infrastructure in the micro wave and optic fibre infrastructure provision space, adding lamenting that coverage was still limited.

Mr. Joseph Tegbe, KPMG’s Partner, Management Consulting,  addressing a forum to woo investors to the nation’s broadband sector, said over the past years, the country has witnessed massive investment, adding the explosion in data brought about by the growth in the social media space has catalsyed the growth in broadband infrastructure in the country, according to Africa Telecoms & IT.

“In the metropolitan transmission ring, what you see is limited coverage. Only about 10 per cent of the cities and towns are covered today. Moving to the homes, we have extremely limited coverage. These two top layers provide a huge opportunity and gap in the broadband supply chain

“For investors in this room, an estimated $200billion is required annually over the next five years to meet this infrastructure gaps. Nigeria offers the best returns on investments according to recent studies,” Tegbe said at an international forum organised by the Nigerian Communications Commission NCC).

According to Tegbe, the Open Access Model of making broadband ubiquitous being championed by the regulator aligns squarely with the Federal Government’s National Broadband Plan, stressing that over the past years, the diversity and growth in the information communications technology (ICT) sector has been due largely to the regulatory environment which has been friendly to investment.

He emphasised on the market potential of Nigeria which would always assure return on investment (RoI) to investors, adding that the World Bank has projected that the country’s population will overtake that of the United States (U.S) and even going to be the third largest populated country in the world next to China and India.

Said Tegbe: “Interestingly, the World Bank has projected that Nigeria will surpass the US in population by 2050 and most likely to become the third largest population by 2050 after China and India with a population of about 460 million people. That represents the size of the population that the investors have the opportunity of exploring.”

He said investors stood to gain incentives such as tax holiday and pioneer status in addition to a ready-made market as a result of the large population and current low spread of broadband which is also a potential high growth market because of the expansive uptake of smart devices in the country.

He recalled that in less than three years, the Nigerian market had grown from being N162million in 2011 to N150billion to date, adding that it is the evidence of the widespread demand for broadband internet service. “Just in less than three years, this market has grown from N162million in 2011 to N150billion to date. This is evidence of the widespread demand for broadband internet service in Nigeria,” he said.

Tegbe expressed confidence that with improved infrastructure spurred by foreign direct investment (FDI) that the market has the capacity for substantial growth in the next couple of years. He lamented that with existing gap between supply and demand in the broadband infrastructure across the country, the question whether the supply can match the demand, arguing that there are some gaps in the broadband market in Nigeria.

According to him, there is already a glut in undersea cables in the country but lamented the absence of complementary hinterland and metropolitan fibre network usually referred to as middle mile and last mile.

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