Nigeria’s telecommunications sector has seen remarkable growth, transforming how millions connect with people and do business. However, beneath this impressive facade lies a silent and often crippling struggle: the pervasive issue of unreliable power supply, which must be tackled to unlock the next phase of growth in the sector, ADEYEMI ADEPETUN writes.
In a country where mobile phones have become an extension of everyday life, enabling everything from mobile banking to online education, the unseen backbone of the digital revolution is constantly battling a formidable foe: inconsistent power supply.
For Nigeria’s telecom operators, keeping millions of subscribers connected is not just about laying cables and erecting masts. It is a relentless and costly war against the erratic pulse of the national grid.
Imagine a critical nerve centre for phone calls, Internet enablers and banking transactions suddenly plunging into darkness. This is the reality Nigerian telecom Base Transceiver Stations (BTS) face daily. With an electricity grid notoriously unreliable, virtually all of Nigeria’s over 45,000 base stations operate on a default backup: diesel generators. This is not a mere contingency plan; it’s the primary power source for many sites, especially in rural areas.
Recent reports painted a stark picture of this energy challenge. Nigerian telecom operators collectively spend an astonishing estimated $350 million yearly on diesel, consuming more than 40 million litres every month. This colossal expenditure, which can account for as much as 40 per cent of their operating costs, is a direct consequence of the unreliable grid. For major players like MTN, the monthly diesel bill alone can exceed N30 billion.
About 40 per cent, if not more, of the operational challenges of the infrastructure companies or operator-owned and managed infrastructure is in the cost of energy: diesel, gas, or renewables.
Analysts reasoned that for the industry to survive the cost and access to energy supply, especially for the InfraCos safely and sustainably, the solution must be tackled in the long run for the sustainability of operations, user experience and profitability.
Beyond the balance sheet
The impact of this energy dependency extends far beyond the telcos’ balance sheets. Arguably, the exorbitant cost of powering networks inevitably trickles down to consumers in the form of higher data and call tariffs. While operators are committed to affordability, the inherent infrastructure costs, heavily skewed by energy expenses, make significant price reductions challenging.
Despite the best efforts, frequent power outages and the time it takes for generators to kick in can lead to dropped calls, slow Internet speeds, and overall service disruptions. This directly impacts the user experience and hinders the nation’s digital ambitions.
The Guardian gathered that rural base stations are hit hardest, costing up to 37 per cent more power than their urban counterparts due to even poorer grid access and increased reliance on diesel. This makes investments in expanding networks to underserved areas less attractive, exacerbating the digital divide.
The sheer volume of diesel consumed by the industry contributes significantly to carbon emissions, posing a challenge to Nigeria’s environmental sustainability goals.
Challenge slows sector’s contribution to growth
ALREADY, the Nigerian Communications Commission (NCC) said it is collaborating with the Ministry of Communications, Innovation and Digital Economy to implement the right policies to propel the contribution of the telecom sector to gross domestic product (GDP) to 25 per cent.
Executive Vice-Chairman of NCC, Dr Aminu Maida, said the sector had done well with its current 14.58 per cent contribution to the gross domestic product (GDP) but could do better if challenges confronting the industry are addressed.
“I know that there are challenges in the industry. I also want to assure you that we are taking them seriously. The Minister of Communications, Innovation, and Digital Economy and I are working very closely looking at the right policies to ensure sustainability for an industry that has done so well for the country with a 14 per cent GDP contribution.
“We believe we can do 25 per cent and above and work is going on in that regard with the Ministry,” he said. Perhaps, owing to its ubiquitous nature and lack of knowledge of the structure of the sector, there was never an attempt to isolate and address specifically the power challenge.
Yet the ability of the sector to continue its impact on national growth and development is tied to the availability and affordability of energy sustainably.
The telecoms sector, with over 320 million connected telephone lines of which 173 million are active, has continued to serve as infrastructure for other sectors, including banking, health, and education, among others, as such needs a significant amount of energy to remain optimal.
Challenges linger
THE Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, has frequently spoken on the significant impact of power challenges on the telecommunications industry in Nigeria.
Adebayo expressed concern that if the fundamental infrastructure (like energy supply) is not improved and people do not invest in the sector, the telecoms industry could face similar challenges to the power sector.
He stated: “When people stop investing, they will stop replacing those generators, so you can come to a point where some sites are out of power… If we are not careful, we may have a situation where telecoms services become available only at a certain time of the day.”
The ALTON Chairman, who was fierce in the agitation for the 50 per cent tariff, had argued that “telecom operators must be allowed to price right” and have “the right tariffs” to ensure a sustainable industry, especially in the face of challenges like high energy costs and infrastructure vandalism.
He stated: “If the government continues to touch (pricing) it will come to a point where it will be in stagnation… Who will then come and invest in this economy?”
Adebayo emphasised that lack of investment, partly driven by the high cost of operations (including power), leads to deteriorating telecom infrastructure, poor quality of service, and inadequate pricing. He said: “If you don’t invest in a sector, you can’t talk about quality of service; you can’t talk about right pricing.”
He warned that without addressing the rising operational costs, including skyrocketing energy costs, “operators may not be able to provide services in some areas and at some times of the day, leaving millions of Nigerians disconnected.”
Search for sustainable solutions
TO mitigate high energy costs, many telcos are actively investigating and implementing renewable energy solutions like solar and wind power to reduce their reliance on diesel.
Recognising the unsustainable nature of diesel reliance, Nigerian telecom players are increasingly turning to innovative and greener energy solutions. The shift towards renewable energy is not just an environmental imperative but a crucial strategic move for long-term operational efficiency and cost reduction.
Lately, solar hybrid solutions are emerging as the most promising alternative. Companies like MTN and Airtel are investing heavily in deploying solar panels and lithium-ion batteries across their base stations. These systems combine solar power with battery storage and backup generators, aiming for maximum uptime with minimal diesel consumption.
Besides, some of the telcos are replacing traditional lead-acid batteries with lithium-ion batteries that offer greater efficiency, longer lifespan, and better performance, especially in Nigeria’s high temperatures. This reduces the need for constant generator usage. Some operators are also exploring compressed natural gas (CNG) powered generators, especially in areas with gas infrastructure, as a cleaner alternative to diesel. Investment in newer, more energy-efficient network equipment is another key strategy, reducing the overall power demand of the base stations.
However, the transition is not without its hurdles. The upfront capital expenditure for setting up comprehensive solar and battery systems can be substantial.
Further, the persistent issue of vandalism and theft of solar panels and batteries at remote sites remains a significant deterrent, forcing operators to invest in enhanced security measures.
Is a greener future possible?
THE NCC is actively promoting the adoption of clean energy in the telecom sector, advocating for policies and incentives that encourage the transition. Public-private partnerships are seen as crucial in driving innovation and scaling up renewable energy solutions.
Telecom expert, Kehinde Aluko, submitted that as Nigeria continues its journey towards a fully digitised economy, reliable and sustainable power for its telecom infrastructure is non-negotiable.
He said the ongoing efforts by telcos to embrace green energy, despite the significant challenges, represent a critical step towards a future where seamless connectivity is powered not by the fumes of diesel, but by the abundant sunshine of Nigeria.
According to him, the silent struggle for power is slowly but surely giving way to a brighter, more sustainable dawn for Nigeria’s vibrant telecom landscape.
