Nigeria’s investments in submarine cables hit $2.24b

[TGD]

 WITH a $2.24 billion investment in submarine cables in the last five years, telecommunications operators in Nigeria have been adjudged as turning the country into a major stakeholder in that critical sector of industry.

At the last count, four of the companies, including Nigerian Telecommunications (NITEL), have been listed among the operators that have invested huge resources in the undersea cable project.

The General Manager of DDC Networks of Computer Warehouse Group, Mr. Oladipo Raji, who went into the specifics at an Internet Forum in Lagos, named the investments as the landing of the $240 million 7,000-kilometre MainOne cable in June 2010 and the 10,000 kilometres Globacom's $800 million Glo 1 cable in October of the same year increased the investments.

Raji also put the worth of NITEL's South Atlantic 3 (SAT 3) at $600 million and the MTN's West African Cable System (WACS), billed to connect the country in two weeks time, at over $600 million, meaning that the total investments and other expenses rose to $2.24 billion within five years.

Also, the Managing Director, Internet Exchange Point of Nigeria (IXPN), Mr. Muhammed Rudwan, said by the end of 2010, the Internet submarine fiber capacity increased by 1,683 per cent, with a projection that the capacity would have risen by a whooping 3,967 per cent by the end of 2011.

Already, new analysis from Frost & Sullivan West African Broadband Market Tracker, covering Nigeria, Cameroun and Cote d'Ivoire, finds that the market earned revenues of $929.9 million in 2009 and estimated this to reach $1.932 billion in 2016.

The research stated that Internet Service Providers (ISPs) still remain the dominant players in the region, except for Nigeria where mobile broadband connections have outpaced fixed broadband connections. "In comparison to other countries, high investments are made in infrastructure development and broadband services present the highest areas for growth opportunities due to the decline in voice revenues," the report said.

The analysts said these investments would unlock the constraints in the West African telecommunications market and catalyse the economic potential of the region. They stressed that a compelling opportunity exists to lower the restrictive cost of international telecommunications and significantly expand Internet access via submarine cable, which will lead to greater efficiency and more competitive business.

However, these submarine facilities in Nigeria, which carry installed capacity of over 19.2 terabytes and over 340 Gigabyte combined, are expected to crash significantly the prices of Internet access cost in the country.

The Guardian learnt that there have been some reductions, at least about 40 per cent in Internet cost in the last eight months. The monthly BlackBerry tariff has been cut by 40 per cent from N5, 000 to N3, 000 by MTN, Airtel and Etisalat, while Globacom has reduced its tariff from N4,800 to N2,800.

Similarly, the monthly tariff for higher bandwidth (five and six gigabytes) Internet packages has dropped by 30 per cent from N10,000 to N7,000 on MTN. It also dropped by 25 per cent from N10,000 to N7,500 on the Glo network.

All together, there have been an average of 40 per cent reduction on BlackBerry subscription across the four networks and the 30-day higher bandwidth Internet bundles on the MTN and Glo networks.

MTN had slashed the monthly subscription fee on its 24 hours Internet package by 20 per cent from N10,000 to N7,000, and also increased the bandwidth limit by 66.7 per cent from 3GB to 5GB. Globacom also slashed the cost of monthly subscription on its 24-hour Internet bundle by 25 per cent from N10,000 to N7,500.

To stay ahead of competition, it also increased the bandwidth limit by 20 per cent from 5GB to 6GB.

Airtel currently charges N10,000 for 3GB and N15,000 for 6GB bundles, while Etisalat charges N10,000 for its 3GB bundle.

Only recently too, SAT 3 operator reduced its distribution cost by 50 per cent, due to market forces.

In a chat with The Guardian recently, the Managing Director, Nigeria Communications Satellite Company (NIGCOMSAT), Dr. Timansaniyu Ahmed Rufai, lamented that the country spends over $500 million yearly on bandwidth purchase from abroad, which had contributed to the increasing capital flight in the country.

According to him, there was need to ensure that there were capacities in Nigeria and "we must ensure that they are usefully engaged."

Raji said more than $2 billion of wealth sat on the sea shores, but "we needed as a country to drive up capacity utilisation of the facilities through the e-commerce; e-payment; e-learning; video applications; research and development and e-government."

Towards the end of 2010, Rudman had predicted that there might be a glut of bandwidth capacity in the country, with the landing of the various submarine cables.

Rudman called for legislations that would monitor distribution and usage of these facilities, which would enable the country to monitor the various traffics that would pass through the country, so that "we can curb the increasing rate of cybercrimes in the country."

 

 

 



Source: Nigeria's investments in submarine cables hit $2.24b