Telecom operators seek law abolishing right-of-way charges

ALTON Chairman, Gbenga Adebayo.

Telecommunications operators in Nigeria have called for legislation abolishing right-of-way charges on fibre-optic infrastructure, warning that the fees account for as much as 60 per cent of deployment costs in some states and discourage investment in broadband connectivity.

The Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, made the call on Tuesday in an interview with journalists after a panel session at the 32nd Nigerian Economic Summit in Abuja.

The session, themed ‘Innovation, Investment and the Next Decade of Partnerships,’ was sponsored by IHS, a telecommunications infrastructure company involved in developing, operating and maintaining communications towers and other infrastructure used by mobile network operators.

Adebayo said removing the charges through legislation would encourage operators to expand their networks, particularly into rural and underserved communities where commercial returns remained uncertain.

“And I do say that by way of legislation, if we can have that legislated, the right of way will be granted free of charge for communication infrastructure to help in a lot of ways,” he said.

He disclosed that right-of-way charges constituted a substantial portion of the cost of laying fibre-optic cables, making network expansion increasingly expensive.

“For every one kilometre of fibre that you deploy, in some of the states we are seeing that the cost of right of way can be as high as 50-60 per cent of the cost of deploying the entire infrastructure,” Adebayo noted.

He added, “And we think that is a major deterrent. So, I am advocating that the right of way should be free of charge, should be zero rated.”

The ALTON chairman proposed incentives for operators willing to extend telecommunications services to commercially unattractive locations, alongside government intervention funds to address persistent coverage gaps.

He said operators were not necessarily unwilling to invest in rural communities but required policies that would make such investments economically sustainable.

Adebayo also raised concerns about growing pressure on existing telecommunications infrastructure, noting that demand for internet services was increasing faster than operators could expand capacity.

“Because of the demand for data services, as you build capacity, it’s almost consumed immediately,” he said.

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He said Nigeria has about 200 million telecommunications subscribers, yet significant connectivity and access gaps remain.

He identified ageing infrastructure, inadequate fibre networks, insufficient telecommunications towers, and cable damage during road construction as additional challenges confronting operators.

Adebayo maintained that more investment and consistent government policies were necessary to support artificial intelligence, digital banking and other technology-dependent services.

Providing strategic insights ahead of the panel discussion, the Chargé d’Affaires of the United States Mission in Abuja, Jimmy Mauldin, emphasised the need for reliable digital infrastructure and predictable investment policies.

“What sets markets apart is not just their potential; it’s their predictability,” Mauldin said.

He said JPMorgan planned to establish a licensed merchant bank in Nigeria to finance major infrastructure projects beyond local lenders’ capacity.

The Managing Director of JPMorgan Nigeria and West Africa, Dapo Olagunju, expressed confidence in Nigeria’s banking reforms and regulatory environment.

“We think that the central bank is very well professionally run at this time, and we are essentially putting our money where our mouth is,” he said.

The President of the U.S.–Africa Business Centre at the U.S. Chamber of Commerce, Kendra Gaither, identified transparent regulations, market access and predictable dispute-resolution mechanisms as essential considerations for foreign investors.

She disclosed that approximately 20 American business executives were visiting Nigeria to explore investment opportunities.

Also speaking, the Chairman and Managing Director of Chevron Nigeria/Mid-Africa, Jim Swartz, said the company’s investment plans included additional drilling and exploration activities.

He disclosed that Chevron had spent an average of $1bn annually with Nigerian contractors over the past five years, while stressing the importance of security, competitive operating costs and durable investment policies.