The cost of bandwidth has crashed by some 200 per cent as the avalanche of undersea cable systems, each with landing points on the shores of Nigeria battle for chunks of the country’s untapped and lucrative internet market.
Bandwidth a major ingredient for telecommunications service delivery has been elusive in the country in terms of cost but investigations at the weekend showed that the commodity which formerly cost between $300 and $400 per mega byte per second (Mbps) is today sold for $110 and $115 per Mbps amounting to $16,000 and $17,000 per STM-1. One STM-1 comprises of 155 Mbps.
It was gathered that this cost is for Tier 2 operators which are mostly internet service providers, banks, telecommunications operators among other that uses the ingredient to provider end user services.
This price is available only in Lagos and its environs where there is last mile access network to deliver to the operator buying the commodity.
Nigeria CommunicationsWeek learnt that the reduction in cost was occasioned by commercial rollout of service by West Africa Cable System (WACS) which introduce cheaper cost compared to existing price when it entered the market.
However, the situation outside Lagos has not changed as the cost has remained at the roof top.
Nigeria CommunicationsWeek gathered that the commodity cost between $1,200 and $1,500 per Mbps in Abuja and $2,000 in Kano.
High cost of bandwidth in these cities is attributed to cost of transmission as well as role of third party activities.
Meanwhile, educational institutions in the country have formed a Bandwidth Consortium to address high cost of bandwidth in cities outside Lagos.
The Consortium which is the brain child of Nigerian ICT Forum is aimed at making bandwidth readily available and cheaper for research and higher institutions of learning in the country.
Dewole Ajao, operations manager of the Consortium, said that they realized that bandwidth cost is cheaper when buying in high volume and that the Consortium has decided to buy in high volume from undersea cable companies and resale to their members at lower cost.
Ajao explained that a single user who demands for 10Mbps buys at N80,000 per Mbps for a month while the Consortium buying 150Mbps pays N32,000 per Mbps.
He noted that presently the Consortium has a working relationship with MTN for WACS and Glo 1 basically because the two operators have a national access network to deliver the commodity to their members in different states of the federation.
Lack of access network has severally been blamed on high cost of bandwidth as well as poor broadband penetration in the country.
It would be recalled that Internet Service Providers in the country in their presentation at a recent stakeholders’ forum on 2.3GHz spectrum licensing said that higher bandwidth at access network will result in more capacity uptake and results in drop in prices.
“Without sufficient bandwidth at front end which is access network, even carrier networks are not doing well. Today Nigeria uses only 10-15 % of its installed international bandwidth capacity.