ISPs struggle for survival: Stakeholders call for innovation, government support

By Chinenye Anuforo

Nigerian internet service providers (ISPs) are facing a significant challenge to their survival. Only a fraction of licensed ISPs are currently active in Nigeria, according to data from the Nigerian Communications Commission (NCC). This poses a challenge to achieving the National Broadband Plan’s goals.
Out of 252 licensed ISPs, only 106 were active in the fourth quarter of 2023, serving a total of 262,206 customers. This pales in comparison to the millions of subscribers served by mobile network operators.
Stakeholders identified several factors hindering ISP growth, including high operating costs, difficulties obtaining right of way permits, and limited internet access in northern regions due to security concerns.
WTES Projects Limited’s chief operating officer, Chidi Ajuzie urged ISPs to broaden their operations and embrace innovation while calling for government support at all levels to create a more enabling business environment.
Highlighting the critical challenges faced by ISPs, such as vandalized infrastructure, unfair competition, and unsustainable pricing structures (tariffs, taxes), Ajuzie emphasized the need for a multi-pronged approach to ensure their survival. He argued that ISPs cannot remain passive and must actively seek new opportunities for growth and profitability.
Beyond the issues raised by Ajuzie, Martins Akingba, COO of eStream Networks, shed light on the additional burden of relying on imported equipment and limited access to foreign currency. He further criticized the government’s view of IT as a source of revenue rather than an economic enabler, hindering growth and innovation in the sector.

Despite the challenges, there have been positive developments. Akingba acknowledged the federal government’s efforts to increase broadband penetration, including the target of 70% coverage by 2025 and the reduced Right of Way fee (N150 per meter). However, he urged states like Lagos to adopt the lower fee to further support ISPs. Dr. Kenny Joda of FibreOne Broadband confirmed the federal government’s assistance but highlighted the inconsistency in implementing the Right of Way fee reduction. Lagos state, for example, still charges a much higher rate (N1500 per meter).

“Nigerian ISPs are caught in a tight squeeze. While the federal government has taken some steps to improve the business environment, challenges like infrastructure vandalism, limited access to foreign currency, and uneven implementation of regulations persist.” Ajuzie’s call for innovation and collaboration among ISPs, along with stronger government support at all levels, is crucial for ensuring their survival and enabling them to play a more significant role in achieving Nigeria’s National Broadband Plan goals.