Out of the 103 Internet Service Providers licensed by the Nigeria Communications Commission in 2017, only 10 of them are viable.
NCC licensed over 100 ISPs as at 2012, but by the end of 2017, only 10 of them applied for the renewal of their licences.
While Spectranet, Swift, Direct on Data, Smile Communications and few others are struggling to keep heads above waters, Multilinks, Starcomms, Reliance Telecoms; MTS First Communications; Disc Communications, WiTel, O’Net (Odua Telecom), Rainbownet, Monarch Communications, XS Broadband, Webcom and several others have either closed shop or exited the telecoms space.
The Chief Executive Officer, Spectranet Limited, Mr. Ajay Awasthi, attributed the development to the exorbitant expenses spent by firms on tower operations, which is counter-productive.
According to him, the cost structure was adverse to the operators’ survival adding that 30 to 40 per cent of operator’s earnings are spent on tower expenses and another 20 per cent goes for connectivity charges on international and metro
lease lines.
He said, “About 2/3 of our costs are increasing, leading to a stressful and challenging situation for ISPs in Nigeria. It is only about 30 per cent of the costs that we can control, which are employment and others. Industry cost structure should be addressed if the country must meet the targeted 30 per cent broadband penetration as we are barely manage to survive.”
The President, Internet Service Providers Association of Nigeria, Mr. Sunday Folayan, said, “Sharing tower rental cost among operators will not be cheap, as it is determined by the number of users on the tower, as well as power and security cost at the towers.
“Due to Nigeria’s harsh business environment a lot of them have shut their operationsas they spent over 40 per cent of their earnings on tower operations, while 20 per cent go for connectivity charges. It could also negatively impact Federal Government’s plan of meeting 30 per cent broadband penetration in 2018.”
