The Federal Government has offered tax holidays to investors hoping to explore telecoms stakes under the planned licensing of Infrastructure Companies (Infracos) to provide metro fibre network across towns and cities in Nigeria.
[su_quote]However, there is a catch. To qualify for these, Infracos will quantify their Capex (capital expenditure) and what it will take to rollout and how long it will take to break even in Nigeria, according to the government offer.[/su_quote]
The tax holiday offer is part of a bouquet of incentives that a high-powered government delegation from Nigeria has offered foreign investors at the ITU Telecom World 2014, the annual gathering of the global ICT industry, underway in Doha, capital city of Qatar.
Under the plan, a tax holiday that spans between five and seven years is part of the deal on the table for the soon-to-be-licensed Infracos hoped to complement a Federal Government programme to take broadband across the country, among other incentives.
Nigeria’s participation at the annual meet also received a boost as Dr. Eugene Juwah, The Executive Vice Chairman of the Nigerian Communications Commission (NCC) received the ITU Strategic Partner Award from the Secretary General of the ITU, Dr Hamadoun Toure at ITU Telecom World 2014.
Dr. Omobola Johnson, Minister of Communication Technology, told the international forum that beneficiaries of the licences shall get tax holidays, among other incentives to encourage the Infracos to invest and guarantee adequate returns on investments in the Nigerian economy.
The offer is part of Nigeria’s drive for more investors into the blossoming ICT sector, the Minister told the ITU Telecom World 2014 gathering.
Mr. Joseph Tegbe, Principal Partner of KPMG, consultants to the upcoming Infraco licensing process, told the audience that the investors will be encouraged to explore areas where many other operators consider to be less commercially rewarding through subsidy and grants may be given out to further their interest in such areas.
They will also be granted pioneer status as part of the incentives to boost their interest in investing in such areas or zones that may look unattractive. Such Infracos will get such incentives that could be up to 30 per cent mark up on their capital expenditure (Capex) and employee tax holidays as well, the KPMG Partner added.
However, there is a catch. To qualify for these, Infracos will quantify their Capex (capital expenditure) and what it will take to rollout and how long it will take to break even in Nigeria, according to the government offer.
Earlier, Executive Vice Chairman of the Nigerian Communications Commission (NCC) Dr Eugene Juwah,told the audience including potential investors from Qatar National Bank, Global Operator, Ooredoo, Vodafone, and several members of the diplomatic corp that Nigeria had achieved 96 per cent teledensity with over 134 million active subscribers, and ICT contribution to national GDP of over 10 per cent.
NCC had in August this year assured that planned licensing of Infrastructure Companies (Infracos) to provide metro fibre infrastructure in all towns and cities across Nigeria is aimed at achieving the vision of the National Broadband plan.
According to him, the telecoms regulator plans to license two Infracos in Lagos and North Central zones while the licensing of five additional Infracos for the other regions of the country will follow afterwards.
According to the chief watchdog at NCC, “the licensing of wholesale license using 30 Mega Hertz bandwidth in the 2.3 Giga Hertz frequency band and the ongoing licensing Infrastructure Companies (Infracos) to provide metro fibre infrastructure in all towns and cities across the country is a deliberate measure of the Commission towards the achievement of the vision of the National Broadband plan.”
Juwah said that, “the process for the licensing of 2 Infracos in Lagos and North Central zones is currently ongoing and will be concluded in September 2014. While the licensing of 5 additional Infracos for the other regions of the country are scheduled to be concluded by end of the year.”