•Nigeria is in danger of an internet blackout
AT a time that many Nigerians are beginning to regard internet connectivity as essential as power and water, they face the very real danger that it could be negatively affected by the inability of several Internet Service Providers (ISPs) to renew their licenses.
The licenses of 17 ISPs are already due for renewal, while those of another 22 will expire next year. Together, they make up nearly 40 per cent of the 98 ISPs in operation, and their absence would result in a significant drop in the provision of internet services in the areas where they operate.
This seeming reluctance to pay the N500,000 individual license five-year renewal fee to the Nigerian Communications Commission (NCC) points to an increasingly difficult economic environment. ISPs are facing several formidable challenges, including power, access to foreign exchange, vandalism, and delays in obtaining necessary permits, among others.
They are particularly unhappy about what they claim is blatant over-taxation, and say that they are struggling under the weight of some 38 taxes and levies. The recent introduction of a 0.005 per cent levy on electronic transactions for the National Cybercrime Fund exemplifies the problem.
The consequences for Nigeria could be grave. An increasing amount of educational, commercial and industrial activity has come to depend on the existence of reliable internet connections. Electronic banking, for example, would not be possible without it. Citizens are increasingly making use of Voice Over Internet Protocol (VOIP) to make calls.
The internet has become the lifeblood of entertainment, as well: without downloads, the country’s vibrant music and film industries would suffer significantly. The increasingly activist nature of political discourse would lose much of its vigour if it suddenly became harder for citizens to go online. It is not a coincidence that the world’s most thriving economies provide free internet without exception.
It is surprising that neither the NCC nor the ISPs and other stakeholders seem to be doing much to resolve the situation, especially since it had occurred before. In March 2015, 115 ISPs were in danger of having their operating licenses revoked due to non-renewal. In August last year, it was found that 92 ISPs had shut down since 2013. Of the 103 providers which have been licensed between 2012 and 2017, only 10 per cent had applied to renew their licenses.
If nothing is done to frontally address the problems militating against the growth and development of ISPs, the repercussions for the digital economy will adversely affect national progress as a whole. The country’s impressive internet penetration rate of 98.3 million in February 2018 will falter, with associated consequences for education, entertainment and commerce. The software developers, content providers, retailers and other evolving businesses that depend on the internet would be in dire straits.
The taxes and levies imposed on ISPs must be reduced to encourage participation and investment. If they are not scaled down, the sector will be reduced to a few large players which would be bad for competition and efficiency. States and local governments, in particular, must stop seeing ISPs as sources of easy cash.
More must be done to develop infrastructure. The adequate provision of public power is vital to reining in operating costs for ISPs. The NCC should work with relevant groups to facilitate the development of more local Internet Exchange Points (IXPs) which would reduce dependence on overseas internet hubs and reduce transit charges. In addition, distribution networks, particularly long-distance and metro fibre networks, must be comprehensively rolled out in order to enhance economies of scale and improve profitability.
Nigeria is on the cusp of an internet-powered digital revolution which could open the way to new businesses, emergent entrepreneurs and a reinvigorated economy. It cannot be allowed to fail.