On Friday, a dispute over right-of-way charges between MTN Nigeria and the Osun state authorities hogged the headlines. The Osun State authorities claimed MTN owes ₦945 million in right-of-way charges—fee for laying high-speed web cables.
That demand was based mostly on a calculation of ₦3,500 per linear meter (the utmost payment relevant) of fiber-optic cable laid. The federal government additionally imposed a ₦100 million high quality.
MTN’s letter to Osun State, printed by a number of publications, gives a glimpse into what seemed to be a shakedown. A number of individuals with direct information of the matter say the dispute, which the telecoms regulator is now mediating, is extra nuanced.
5 individuals with direct information of the matter say the federal government’s calls for are rooted within the perception that MTN Nigeria and O’odua Infraco Assets Restricted acted in dangerous religion in a fancy net of partnerships that started in 2022.
A September 2022 settlement between O’odua Infraco Assets Restricted and MTN is on the coronary heart of the dispute. The settlement gave MTN an “indefeasible proper of use” to lease O’odua’s fibre ducts—protecting housing that forestalls vandalism and put on and tear—to put fibre optic cables. As a part of that settlement, MTN paid O’odua right-of-way charges.
The federal government contends that O’odua was not authorised to gather charges on its behalf. It additionally argues that it was not a celebration to the settlement between MTN and O’odua and isn’t certain by it.
“Along with clause 6.13, the Service Supplier (O’odua) shall additionally present a no-objection letter from the Federal Ministry of Works and Housing and the related state authorities stating it isn’t against its entry into this settlement with MTN,” learn an excerpt from an advance copy of a press assertion citing parts of the settlement seen by TechCabal.
Three individuals accustomed to the federal government’s place mentioned the charges paid by MTN signify ₦650 per linear meter, lower than half the minimal ₦1,300 Osun state prices. In addition they claimed the federal government by no means acquired these funds.
“The settlement purportedly executed between O’odua Infraco and MTN on twenty second September 2022 far predated the existence of any purported contract for Proper of Means between the Osun State authorities and O’odua Infraco, which was purportedly executed on sixth March 2023,” mentioned an advance copy of an Osun state authorities press assertion seen by TechCabal.
MTN didn’t reply to a request for feedback.
O’odua Infraco didn’t instantly reply to a request for feedback.
Osun state and right-of-way charges
The press launch references Osun State’s choice to cancel right-of-way charges in March 2023. A minimum of two authorities officers who requested to not be named as they weren’t authorised to talk on the matter claimed the 2023 cancellation was based mostly on guarantees by telcos and infrastructure suppliers to offer web to underserved areas. They declare infrastructure suppliers reneged on the settlement.
Proper-of-way charges, an vital income for struggling states, are cited as one purpose telcos have struggled to offer high-speed web nationwide. Whereas the Federal Authorities really helpful that states cost ₦145 per linear meter, that advice has been troublesome to implement.
Some governments imagine telcos ought to contemplate the charges as a vital price of doing enterprise, arguing that many telcos is not going to lay fibre-optic cables outdoors of economic areas.
MTN, which has suffered from the naira devaluation and report inflation in Nigeria, will probably be reluctant to pay these steep charges. But the federal government’s place appears to be knowledgeable by the concept there’s no level in canceling right-of-way charges if telcos will merely pay them to 3rd events anyway.