Exclusive by Technology Times

Lagos. December 19, 2010. Two of the nation's biggest conglomerates, Globacom, the second national operator and Dangote Group, are locked in a duel over control of the aerial fibre rights on the national power grid of the Power Holding Company (PHCN), Technology Times has learnt exclusively.

Alheri Engineering, a wholly-owned subsidiary of Dangote and Phase 3 Telecom, a privately owned company, both long distance operators (LDOs)that have sealed a deal with PHCN to run optical fibre links over the national grid of the power utility. Based on their licences and pacts sealed with PHCN, they function as carriers to other carriers by carrying traffic for telecoms operators and others based on agreed fees.

Both companies are staving off their aerial territory from Globacom, which secured a request from the Presidency to be accomodated on the PHCN infrastructure to carry its traffic, people conversant with the situation told Technology Times.

The duo of Dangote and Phase 3 Telecom both have the national grid split between them to offer transmission service based on revenue sharing agreements with PHCN have resisted attempts at co-locating Globacom-owned optical fibre cables on the power grid.

Globacom and Dangote declined comments on the issue but people conversant with the situation told Technology Times anonymously that the SNO had secured a request from Aso Rock for PHCN to accommodated Globacom alongside the two long distance operators.

The thinking within Globacom is that its vision for becoming a major telecoms powerhouse would be accelerated by seamlessly its linking its metro, national and international fibre optic assets to the aerial transmission patway to carry its telecoms traffic across Nigeria, insiders told Technology Times.

But the SNO met with resistance from the two companies that cited an agreement that they entered into with PHCN to carry traffic and share revenue with the power utility noting that the aerial pathway is inadequate to accomodate a third player. Under the pact, PHCN will earn revenue of 2.5 per cent from the companies for using its hitherto dormant capacity.

Technology Times learnt that Ministry of Justice was requested to intervene in the issue based on opposition from the existing LDOs who see the coming of the SNO as a breach of their agreement with PHCN.

PHCN's aerial transmission route is attractive to telecoms operators for its ease of rollout and the limited hurdles in acquiring expensive right of way that is a major challenge with terrestrial transmission paths.

The latest feud once bring into focus the growing interest among the major players in Corporate Nigeria to partake in the lucrative telecoms industry following the 2001 GSM auctions where the early birds in the race earned dividends from the explosive market growth.

Dangote, a late entrant into the telecoms game was to gain from the loss of Hakeem Belo-Osagie, the current Chairman of Emerging Markets Telecommunications Services (EMTS), promoters of Etisalat Nigeria, which is the 5th GSM network operator in the country, who lost the sale deal when the telecoms regulator in June 2004 revoked the licence of a joint venture that would have promoted a similar business with PHCN. The licence was issued the JV in 2000.

Belo-Osagie was one of the lead promoters of NEPSKOM, a joint venture between Nigeria's National Electric Power Authority (now renamed PHCN) and its South African counterpart, Eskom Enterprises of South Africa, to offer transmission capacity to carriers by carrying their traffic over the national grid.

However, the deal fell through when the Nigerian Communications Commission (NCC) revoked the long distance operator licence granted Nepskom, over allegations of non-compliance with licence obligations. The N20million licence fee paid for the Nepskom venture was also lost in the wake of the regulatory hammer.

Dangote and Belo-Osagie recently closed another major telecoms deal when the former sold Alheri Mobile Service, the subsidiary of Dangote Group's holding the company's 3G licence bought at $150million in March 2007, to Etisalat Nigeria. Financial details of the sale were not disclosed by both parties.

A government source told Technology Times that the outcome of the intervention by the Justice Ministry may have put paid to Globacom's plan to access the PHCN aerial fibre optic transmission pathway.

The resistance by Dangote and Phase 3 in allowing Globacom to lay its aerial fibre optic cables on PHCN's existing towers may have come from the revenue they will lose selling capacity to the SNO rather than becoming a direct competitor on the infrastructure, say experts.