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RoW, electricity challenges account for 70% of operators’ costs

By Adeyemi Adepetun
13 September 2019   |   4:28 am
Challenges posed by hike in Right of Way (RoW) remain unabated as 70 per cent of telecommunications operators’ expenditure currently consumes a bulk of their revenue.

telecom mast

•Ease of Doing Business yet to impact telecoms sector, say stakeholders

Challenges posed by hike in Right of Way (RoW) remain unabated as 70 per cent of telecommunications operators’ expenditure currently consumes a bulk of their revenue.

The issue was raised on Wednesday in Lagos, at the on-going NigeriaCom 2019 telecoms forum.According to investors, business managers, and stakeholders, who gathered at the event, government’s ‘Ease of Doing Business’ was yet to be felt in the telecommunications industry.

Speaking during a panel session on ‘Public and Private Collaboration for a Robust Broadband Plan in Nigeria’, the Chairman, Association of Licensed Telecommunication Operators of Nigeria (ALTON), Gbenga Adebayo, regretted that network operators are faced by multifaceted challenges ranging from multiple taxes, insecurity, and harsh business environment.He lamented that the operators are usually harassed, mostly at the state and local government levels during infrastructure deployment.

According to him, lack of understanding among state government officials contribute to the challenges as exorbitant charges during the process of obtaining RoW for broadband infrastructure deployment now accounts for about 70 per cent of the costs.Adebayo, an engineer, noted that while the Nigerian Communications Commission (NCC) has done very well by educating government officials, the environment is not yet conducive for the industry operators as there are still cases of high-handedness by the state officials.

Referring to the National Broadband Plan (2013-2018), the ALTON Chairman said although the 30 per cent target was achieved and surpassed, however, the operators would have helped the country to perform better had those bottleneck been removed.He also expressed concern that government was not doing enough to protect smaller companies in the industry, stressing that if operators with deep pockets continue to have access to bouquets of services through licensing, they would continue to threaten smaller operators.

“It is expensive to buy broadband in Kano State, for instance, than other areas like Lagos, because of the cost of doing business”, Adebayo said.
He however, said that all hope is not lost as the operators are prepared for the future, saying, “Investors looking to come here should know we understand this is the new frontier for businesses.

“All we have to do as a country is have a critical look at the policy and regulatory environment. Protection of telecom infrastructure and designating same as national critical infrastructure is important”, he added.On his part, the Chief Operating Officer at Rack Centre, Ezekiel Egboye, said that infrastructure remains critical to promoting digital services on the Continent.

Egboye called for improved handshake between the public and private sectors to support innovation.It was also revealed at the forum that due to the gaps in power generation in the country, operators currently buy an average of 40 million litres of diesel per month to drive telecom sites.

The Vice President, Network Operations, Airtel Nigeria, Dr. Adedoyin Adeola, noted that power supply was being sabotaged by different people who were benefiting from alternative forms of energy.According to him, network operators in Nigerian and few other African countries are the only ones who introduce two power generating sets into their business case.

Adeola noted that in other climes, operators relied solely on electricity from the national grid.“In Nigerian telecoms, we consume almost 40 million litres per month to power telecoms towers. In the telecoms industry today, it is only in Nigeria and a few other countries that will factor in two power generators in their business case.

“One will work for 12 hours and the other for another 12 hours. The reverse is the case in other countries where the cost of generator is zero while public electricity supply is fixed at 100 per cent,” he stated.

From his perspective, Managing Counsel at Greenfields Law, Osondu Nwokoro, said that there should be consistency with regards government policies in order to entrench business stability.He also said that policies to support smaller businesses cannot be overlooked, adding they add dynamics and changes in every economy through innovative products and services.