Concessionair: Lagos Fibre Duct Project will Reduce Telco’s Infrastructure Cost by 50%
TECHDIGEST- According to WTES Project Limited, the concessionaire in charge of the Lagos State Unified Duct Infrastructure Project, the project would result in a 50% decrease in the state’s telecommunications providers’ infrastructure costs. The justification comes in the midst of worries voiced by industry players who fear that the initiative would lead to a monopolistic scenario.
A project as large as the Lagos fibre duct might result in a monopoly, according to the GSMA, the international organization that represents the interests of all mobile network providers, as the price of the lease is frequently set by the sole owner of the infrastructure.
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Chief Operating Officer of WTES, Chidi Ajuzie, explained that the concession agreement with the Lagos State Government is for 25 years, after which the government will either extend the agreement or take over the infrastructure. He said “WTES has a 25 year concession arrangement with Lagos State Government to build an open duct infrastructure. As we build, every operator comes in and leases that infrastructure to provide services. With this project, we have taken off 50% of the cost the telecom operators would have incurred in building their infrastructure. So, we built, and they just come to us to lease.”
When asked how this will affect Main One which was licensed by the Nigerian Communications Commission (NCC) to deploy broadband infrastructure in Lagos, Ajuzie said: “We are not a licensed InfraCo. We are just to build and lease. The licensed InfraCo can come to us as the infrastructure owner and lease. They can also build their own, but the mindset is that there is no need for duplication since someone has already built it.”
Meanwhile, Lagos State is implementing a ‘dig once’ policy which prevents the fragmented and constant digging of state roads by different telecom operators and Internet Service Providers (ISPs). This means that all telecom operators in the state, including the licensed InfraCo, are conditioned to lease from WTES. Pointing out the disadvantages of such projects, usually referred to as Single Whole Network (SWN), the Head of GSMA Intelligence, and Peter Jarich said: “SWNs are generally defined as government-initiated network monopolies, compelling operators to rely on SWN-delivered wholesale services as they serve and compete for customers. Like network sharing arrangements, SWNs often purport a rationale based on reducing both network CAPEX requirements and end-user service costs, driving uptake in the process. Unlike sharing agreements though, SWNs are mandated, they are not voluntary and do not give operators the flexibility to determine the best arrangement for sharing.”
