Stakeholders Decry Low Capacity Utilization of Bandwidth

In spite of huge bandwidth capacity brought into the country by the various undersea cable infrastructure providers, a paltry 10 percent of the capacity is been demanded by subscribers of the commodity and stakeholders are worried.
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Nigeria CommunicationsWeek investigations revealed that the entire capacity undersea cable infrastructure brought into the country stood at 8.0 terabyte per second bandwidth.

A breakdown of which showed Glo with 1 2.5Tb/s; Mainone 1.28Tb/s; WACS 3.84Tb/s; and SAT-3 340Gbit/s.

Out of these avalanche of bandwidth, only about 10 per cent are in demand, leaving the rest idle.

Engr. Lanre Ajayi, president, Association of Telecommunications Companies of Nigeria (ATCON), said that “we are using less than 10 percent of capacity of the bandwidth that lands at our shores. Investors in the undersea cables are lamenting over low level of capacity utilization”.

Nodding in agreement, Kazeem Oladepo, general counsel, MainOne Cable, said: “Today in Nigeria, we see latent demand rise slowly but steadily. Currently, I doubt if there is any operator in Nigeria  exhausting up to 10 percent of the capacity they have on their submarine cable, meaning that the investment is at least 90 percent underutilized, a constraint, of course, on their ability to generate revenue to recover not only its  cost; but also earn margin on the investment.”

“When compared with developed markets such as the United Kingdom, operators that are largely tier I operators these include, AT&T, TATA, Interoute, PCCW, among others, their wholesale prices in Europe are far lower as these operators do not have the constraints that are peculiar to our market. The transmission cost of moving traffic from location to location is almost nothing, since you do not need to move the capacity 7,000 kilometers away from the tele-house,” he noted.

He explained that the biggest issue is infrastructure to support the delivery of the services in reality, ‘availability of this infrastructure and the price of access to it, are still not competitive. Connecting a customer in Abuja remains far more expensive than the cost of connecting Lagos to London as we have maintained and this will remain so until we have the appropriate regime to force anti-competitive pricing of terrestrial infrastructure down and compel open access to the infrastructure”.

David Venn, chief executive officer, Spectranet, a 4G LTE internet service provider, identified factors responsible for low bandwidth capacity utilization.

According to him, “pricing has a big role to play. There are two factors, pricing and accessibility. Although price is dropping on the international market but it is still expensive to deliver service to end users which in turn result to increased broadband penetration. The most challenging of the cost is on the national circuit that has hindered operators like us from expanding to other cities of the country. For instance, 20 gigabyte of internet cost N7, 000, this is affordable to some people and not affordable to everybody”.

He stated that Nigerian Communications Commission (NCC) needs to come out with regulation on the pricing of national circuit required to deliver internet on national network.

“Although they are doing work on this with the help of a consultant, but there is no result yet, when this is done, it will encourage competition in this area and drive down price. We the internet service providers are expecting this, but it has not been delivered yet. For undersea cable side from where ISPs buy from, there is competition and market forces is driving down prices though still it is high,” he said.