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TOWER AND CONNECTIVITY SERVICE CHARGES DWINDLES ISPs MARKET
ISPs loss 60% of it’s earnings to tower and connectivity charges.
90% of Internet Service Providers (ISPs) in Nigeria have gone out of business among them are Swift, Spectranet, Direct on Data and Smile Communications. Surviving ISPs are complaining that 40% of their earnings is spent on tower operations, while 20% goes for connectivity charges, with this rate the Federal Government’s plan of having 30% broadband penetration this year will no be visible.
In the past five years, the Nigeria Communications Commission (NCC) has licensed 103 ISPs, but as at the end of 2017, only 10 percent applied for the renewal of their licences. The likes of Multilinks, Starcomms, Reliance Telecoms; MTS First Communications; Disc Communications, WiTel, O’Net (Odua Telecom), Rainbownet, Monarch Communications, XS Broadband, Webcom and others have either closed shop or exited the telecoms space.In 2016, MTN acquired the last surviving Code Division Multiple Access (CDMA) operator, Visafone.
Chief Executive Officer of Spectranet, Ajay Awasthi said ” industry cost structure should be addressed if the country must meet the targeted 30% broadband penetration”. Speaking on ISPs exposures in the country, a telecoms expert, Kehinde Aluko, said “that factors confronting services providers include the high cost of tower rentals, which are competition and service cost and competition in the co-location business is not deep enough to bring about reduced cost and efficient management.”
The President, Internet Service Providers Association of Nigeria (ISPAN), Sunday Folayan, said “tower rental cost 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”.
A senior official of the NCC said that the commission was not resting on its oars but advised ISPs to develop new business models that would help them remain in business.