.Agreement binding on all states, says FG
More Nigerian states are set to slash the cost of Right of Way (RoW) permits for telecommunications infrastructure by at least 96 per cent. This is even as the Minister of Communications and Digital Economy, Dr. Isa Panatami, disclosed that an agreement to comply with the N145 per linear meter recommended by the National Executive Council (NEC) was signed by 34 out of the 36 state governors early this year.
RoW charges are government levies imposed on telecom companies and internet service providers (ISPs) to lay fibre-optic cables along state roads. The reduction of these charges is expected to significantly drive down the cost of internet access in the country.
With states like Ekiti, Imo, Katsina, Plateau, Kwara, Kaduna, and Anambra already toeing this line, 29 more states are expected to comply with the agreement any moment from now.
Until May this year, most of the states were charging telecommunications operators as high as N6,000 per linear metre, for Right of Way, while the average charge across the country stood at N4,000.
However, as a result of the minister’s recent engagements with the state governors through the Nigerian Governors’ Forum, an agreement was reached that all states should review their charges downward to N145, which the Federal Government had recommended in 2013 to fast-track broadband infrastructure deployment.
But while the industry players are worried that only seven out of the 36 states have so far announced compliance with the N145, and in some cases, a complete waiver of the RoW charges, Pantami, at a virtual conference organised by the Association of Telecommunications Companies of Nigeria (ATCON), said the agreement to slash the RoW charges was binding on all the 36 states of the federation.
“I must clarify that the Right of Way charges reduction is beyond the seven states that have so far announced their decisions. We have a consensus at the Nigerian Governors Forum meeting and it is automatic for all states and I will say that the announcements so far made are just at the discretion of the state governors.
“At least, 34 states were represented at the meeting and none of them challenged the agreement we had. If any state insists on charging more than the agreed price, the telcos should resist,” the minister stated.
He noted that the engagements with the governors were prompted by the complaints from telecom operators that 70 per cent of their investments were going into RoW charges, a development that could discourage investors from investing in the country’s broadband project. He said with the intervention, the operators would now pay less across the country.
According to the minister, one of the operators who was initially asked to pay a sum of N560 million to lay cable in an area in Kwara State has now been required to pay only N150 million.
Pantami said he had made the state governors realise the economic benefits of broadband penetration to their respective states, adding that the gains are far beyond what they could realise from taxes and charges.
Ekiti State had set the ball of uniformity rolling in May when it announced a reduction in RoW charges with a 96 per cent slash from N4, 500 to N145. Since then, three states, Katsina, Imo, and Plateau, followed suit. Kaduna and Anambra, on the other hand, completely waived charges, while Kwara dropped it to N1 per linear metrRecall that the Federal Government had recently launched a new National Broadband Plan (NBP 2020-2025) with a target of achieving 90 per cent penetration in the next five years.
One of the key metrics to achieving the target is the harmonisation of the RoW charges across the country.