Tower maintenance cost rises to $104m monthly

The cost incurred in the maintenance of telecommunications towers in the country has risen to $104 million from $80 million every month in the past one year, Nigeria CommunicationsWeek can now reveal.

Telecom towers houses base transceiver stations (BTS) that Global System for Mobile communications (GSM), Code Division Multiple Access (CDMA) and 4G internet service providers use to deliver services to their customers.

Nigeria CommunicationsWeek investigations revealed that with adoption of co-location model by telecom operators and sale of towers to tower operators by GSM operators among others, 95 percent of the towers in the country are under the management of tower operators.

It was also gathered that presently 26,000 towers are actively in use by operators as against 25, 000 last year, and it cost $4,000 to manage a tower housing three to five base stations while a tower housing a single base station cost $3,000 to manage every month against $3,000 and $2,000 respectively as at last year.

A Staff of one of the tower operators who does not want his name in print told Nigeria CommunicationsWeek that the increase in the cost of maintenance as witness in the past one year could be attributed to increase in the cost of diesel, generator parts and generators which has been affected by foreign exchange issues.

“60 percent of the cost of managing a tower goes to provision of power, such as diesel and maintenance of generators. Where there is public power supply, the tariff has gone up.”

Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), said that in Nigeria, tower operators are faced with problems of approval cost, multiple regulations, multiple taxations and maintenance cost. Power is a challenge as cost of diesel is high; today you buy N140 per litre tomorrow you buy it for N150. These costs are not insignificant and affect the business,” he said.

He added that the present system of handing over towers to tower operators has created more jobs as it encourages springing up of supportive players in the industry. “This is also fallout of our internal regulatory mechanism to ensure growth in the industry,” he said.

Lanre Ajayi, immediate past president, Association of Telecommunications Companies of Nigeria (ATCON), identified two factors as responsible for high cost of managing towers in the country, which are competition and service cost.

According to him, ‘the high cost of tower management is occasioned by service cost provided at the towers such as power and security. “Most towers are powered by generators and the cost of gas is high, they provide security at the towers. These are outside the control of co-location operators,” he said.

Today, there are three major players in that space which include, IHS, Helios towers and the new entrant American Towers Company (ATC).