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Published On: Mon, Nov 3rd, 2014

Internet service providers lament $2,000 cost of renting towers

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Internet CafeBy Chris Alu

Internet Services Providers of Nigeria (ISPs) has lament over the high cost of renting towers in the country, describing it as frustrating the effort towards expanding services to undeserved communities.

Mr.Sunday Folayan, president, Internet Service Providers Association of Nigeria (ISPAN) speaking at the Spectranet, Direct On PC and Mobitel meeting of operators, said that tower rental cost is much higher compared to other developing countries because infrastructure

providers face unique problems such as power, theft & security.

He explained that only in Nigeria that huge portion of ISP revenue goes towards connectivity charges and tower rentals, according to him, co-location facility providers charge operators $2,000 monthly for tower rental and each tower houses about five operators.

He said that tower rental cost in the country will not be cheap as it is determined by some factors which include number of users on the tower as well as power and security provided in the base stations.

Also speaking Mr Lanre Ajayi, president, Association of Telecommunications Companies of Nigeria (ATCON), identified two factors as responsible for high cost of tower rental in the country, which are competition and service cost.

According to him, ‘competition in the co-location business is not deep enough to bring about reduced cost. Presently, there are few companies providing co-location facilities in the country’.

He added that high cost of tower rental is also occasioned by service cost provided at the base stations such as power and security. “Most base stations are powered by generators and the cost of gas is high, they provide security at the towers. These are outside the control of co-location operators,” he said.

He however, urged government to set up an intervention fund to support the growth of ICT in the country just as she did in the entertainment industry, from where small operators could borrow to expand their network.

Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), agreeing on local cost of services at tower as determinate factor, noted that cost of service provision in two different environments are not the same as in Nigeria and India.

“In Nigeria, tower operators are faced with problems of approval cost, multiple regulations, multiple taxations and maintenance cost. Power is a challenge as cost of diesel is high; today you buy N140 per litre tomorrow you buy it for N150. These costs are not insignificant and affect the business,” he said.

 

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