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Tax, power, others destroy 90% ISPs

Internet Service Providers (ISPs) are faced with numerous challenges, ranging from high operational costs and power.

These challenges, among others, have now made only 10 per cent of the 103 licensed ISPs in the country to approach the Nigerian Communications Commission (NCC) for license renewal.

Indications from the telecom regulator showed that some 90 per cent of ISPS are out of business due to issues of power; accessibility of forex; multiple taxation/regulation; infrastructure; vandalisation as well as high costs; and long delays in obtaining right of way and permits, which also degrade the quality of services provided by the licencees.

Ms Funlola Akiode, Director, Licensing and Authorisation, said in Lagos at a stakeholders’ forum on ISPs, that the Commission has witnessed a tremendous decline in the number of applications for ISP licences while the renewal rate of this licence category has also dropped drastically.

“In the past five years, the Commission has licenced a total number of 103 ISPs nationwide but about 10 per cent has applied for renewal of the licence. That is of the reasons why we are here today, to find out if and why about 90 per cent of our ISPs are out of business and why some ISPs have not rolled out services in accordance with the conditions of their licences,” Ms. Akiode queried.

She said that as a responsive regulator, the sustainability of ISPs in the telecoms business is the primary interest of the Commission, adding that the regulator is not unmindful of the difficult operating environment, the stifling competition from a variety of players, dearth of funding and so on.

In his welcome address, Prof Garba Danbatta, Executive Vice Chairman, NCC said the larger telecom industry of which ISPs are integral part, is beset with numerous challenges.

The NCC boss, represented by Sunday Dare, Executive Commissioner, Stakeholders Management, lamented that issues with power, accessibility of forex, multiple taxation/regulation, infrastructure, vandalism as well as high costs and long delays in obtaining right of way and permits not only degrade the quality of services provided by the licensees, but also negatively affect the attainment of critical national objectives on the speedy roll-out of broadband networks to power socio-economic growth and the enhancement of the country’s contribution to national gross domestic product (GDP).

“The viability of ISPs is particularly challenged by factors such as the availability of cheap/ubiquitous mobile internet access, bandwidth costs, vertical integration of mobile network operators as well as the growing uptake of leased line services by operators among others. Also noteworthy is the question of availability/effectiveness of local internet exchange point.

“We believe the ISPs have a critical role to play in the attainment of national broadband growth objectives and must therefore not be left to die out,” he stressed.

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