ICT

Macroeconomic uncertainties hold N135b telecoms investments

A combination of factors, such as naira devaluation, paucity of foreign exchange (forex), insecurity and others are threatening the closure of about N135 billion investment gap in the telecoms sector, it was gathered at the weekend.

According to the Nigerian Communications Commission (NCC) and the Association of Telecoms Companies of Nigeria (ATCON), with the size and population of the country, the industry will require no fewer than 110,598 base transceiver stations (BTS). Currently, there are about 30,598 BTS in the country leaving a gap of 80,000 BTS.

The Association of Licensed Telecoms Companies of Nigeria (ALTON) said the industry is 100 per cent dollar dependent. Its Chairman, Gbenga Adebayo, in a telephone interview, said the ability to expand infrastructure and even maintain existing ones to improve end user experience cannot be achieved without dollar availability.

He urged the Central Bank of Nigeria (CBN) to categorise telecoms sector as critical sector of the economy, so it could be given priority in access to forex.

The country has launched a new National Broadband Plan (NBP) designed to deliver data download speeds across the country at a minimum of 25megabytes per second (Mbps) in urban areas, and 10Mbps in rural areas, with effective coverage available to at least 90 per cent of the population by 2025 at a price not more than N390 per 1gigabyte (GB) of data, that is two per cent of median income or one per cent of minimum wage).

ATCON President Olusola Teniola, said based on BTS deficit and the need to meet up with the ambitious goals of the NBP, the issue of access to forex must be addressed frontally. In a telephone interview, he said a typical BTS with two power generating sets, inverter batteries, portacabin, cabling and others will cost about $120,000 (about N46. 8million).

He said with the devaluation of the naira, this cost goes up because operators would be compelled to source forex from the black market at punitive costs. “We need the CBN to consider our members to access forex through NAFEX at N380/$1,” he said.

NCC CEO, Prof Umar Danbatta said the telecoms sector has attracted about $70billion into the  economy while the National Bureau of Statistics (NBS) put total contribution of the information communications technology (ICT) sector to nation’s gross domestic product (GDP) at 14 per cent.

The CEO, VDT Communications Limited, Biodun Omoniyi, said to sustain this growth trajectory, the Federal Government would need to put the enabling environment in place.

According to him, the criticality of the sector to the economy was brought to the fore during the outbreak of COVID-19 pandemic.

He said affordability and availability of services could only be guaranteed if the government puts the enabling environment in place, lamenting that access to forex and naira devaluation were already taking its toll on operating cost.  Like Adebayo and Teniola, he sought for government’s intervention to ease forex access because the sector is a chain.

First Vice President, ATCON, Ikechuhwu Nnamani, said the twin challenge of source and cost of funding should be addressed frontally. He said the 30 per cent of the N15 trillions Infraco Fund launched by the CBN should go into the telecoms sector because it is also a critical sector of the economy while the CEO, Pan African Towers, Wole Abu, said digital infrastructure is crucial to the development of the country.

He said exiting infrastructure for access and cyber security needed much to be desired, underpinning the need for more cash flow to develop the sector.

This cash, running into N136billion, expected by way of FDI cannot flow into the country, if people are unsure of the security of their investments. Thus, the enactment of a law or an executive order classifying telecoms infrastructure as Critical National Infrastructure (CNI) is central to address the issue of security.

Like Nnamani, Abu said the CBN Infraco Fund should also be extended to the telecoms sector. He said the digitaliisation of the economy should not be left to the NCC alone.

He said: “The CBN should not leave the digitalisation of the economy to the NCC. We must put finance in place to get the broadband plan working.”

 

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