Further expansion of telecommunications services would be hindered significantly by the inability of the players to secure foreign exchange to upgrade current infrastructure and deploy new ones.

Stakeholders have also identified the lack of access to FX as a threat not only to the deployment of infrastructure for 5G network, but also to meeting the country’s broadband target as enshrined in the New National Broadband Plan 2020 to 2025.

The plan is to hit the 70 per cent broadband target and 90 per cent population penetration in two years.
Though the Executive Vice Chairman of the Nigerian Communications Commission (NCC) Prof. Umar Danbatta, said the country has achieved 50 per cent penetration, however, monthly subscription statistics showed that current broadband penetration hovers between 46 per cent and 49 per cent.

That aside, The Guardian gathered that further 5G deployment to more cities in the country has been hampered by operators’ inability to access FX.

Danbatta had disclosed that 5G services are available in different locations in 12 states of the Federation with over 60,000 subscriptions so far. Airtel, which emerged winner and got licensed in December 2022, rolled out services in June and has covered Lagos, Ogun, Rivers and Abuja.

On the other hand, MTN confirmed service availability of 5G in about 12 cities of the country. MTN noted that to support the rising data traffic on its network and expand its base further, it prioritised enhancing the capacity and coverage of our 4G and 5G networks.

It said that its total data traffic increased by 45.6 per cent., 4G traffic constituted 82.5 per cent (up by 5.2pp) and 5G constituted 21 per cent on all 5G-colocated clusters.

The telecoms firm said it has rolled out 700 5G sites in locations including Lagos, Abuja, Port Harcourt, Kano, Owerri, Ibadan, Maiduguri, Abeokuta, Ife, Warri, Enugu, Ife and Ifo.

Speaking with The Guardian, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said the major challenge confronting the sector has remained access to forex.

Adebayo said: “The sector is highly dependent on foreign exchange. Expansions are also highly dependent on foreign exchange. So, what we are seeing in the fluctuation of the forex market would affect expansion and growth.” Other than the issue of accessibility to forex, the value of our local currency is also a factor. It means that we are pricing in Naira and a number of our costs are forex based.”

Indeed, during the visit of the Chairman of Bharti Airtel, Sunil Mittal and Chief Executive Officer of Airtel Africa, Segun Ogunsanya and other senior management of the telecommunications firm’s visit to President Bola Tinubu, shortly after he assumed office as Nigeria’s number one citizen, The Guardian learnt that issue of forex was part of the discussion at the meeting.

This sector challenge has been signposted by statistics from the NCC, which showed a great slump in the Foreign Direct Investments (FDIs) that entered the sector in 2022.

Precisely, NCC, while relying on data from the Central Bank of Nigeria (CBN), informed that the total investment inflow to the industry in 2022 fell to $399.9 million, which was a significant drop from the previous year, marking a 47 per cent decline from the $753 million had in 2021. Even though 2021 saw an improvement from the $417.4 million in 2020 — a year heavily impacted by the global COVID-19 pandemic — it still fell short compared to the pre-pandemic investment of $942.8 million in 2019.

As such, coupled with the decline in investments, telecoms operators have scaled back their capital expenditure, even as the need for continuous upgrades and expansions in infrastructure becomes more critical.

A telecoms expert, Kehinde Aluko, blamed the current situation in the sector for several challenges, the most significant being the fluctuating forex market, making it less attractive to foreign investors.

According to him, with the telecoms sector projected to require an estimated $100 billion investment over the next decade, he said addressing the forex challenge becomes paramount.