FG, states slow down N1.9trn investments in network expansion

Ben Uzor Jr

Efforts by operators in Nigeria’s highly competitive telecommunications market to meet Quality of Service (QoS) mandates of the Nigerian Communications Commission (NCC) are at present being disturbed by agencies of federal, state and local governments who delay in approving the site building proposals for the operators, Business Day can now reveal. Industry experts who spoke to BusinessDay have criticised the government’s approach, labeling it as counter-productive to economic development, as it prevents operators from rolling out the requisite network infrastructure to guarantee better quality of service.

Expectations are that operators will have to deploy additional 50, 000 Base Transceiver Station (BTS) – a critical network component required to deliver telecoms service to meet quality of service thresholds. Analysts have said that the industry would require an estimated N1.95 trillion to build the remaining 50,000 base stations that would guarantee optimum quality of service. However, efforts to roll out infrastructure are being slowed down by various absurd charges emanating from governments and their agencies which demand enormous sums of money from the operators before allowing them to build their base stations.

“The cost of building base stations from the time you secure the land where you want to install the BTS and the time it goes live is around $250,000,” Steve Evans, chief executive officer, Etisalat Nigeria confirmed in an interview. So if a base station costs $250, 000 (about N39 million), operators would require an estimated N1.95 trillion investment to erect additional 50,000 base stations across Nigeria to improve the quality of service by over 100 percent for voice and data services. Telecoms companies, Code Division Multiple Access (CDMA) operators inclusive, have so far deployed 20, 000 BTS, leaving a wide deficit of 50, 000 BTS to be provided for optimum service delivery.

Telecoms subscribers have continually expressed apprehension about poor quality of service (QoS) in the various networks. Already, stakeholders in the telecoms sector have condemned and blamed the unsatisfactory quality of services on the insufficient number of BTS. “Multiple taxation and regulation by a myriad of Ministries, Departments and Agencies (MDAs) of the Federal, State and Local Governments, increase considerably the lead time to roll out and costs of deploying such infrastructure.

“Theft, vandalism and sabotage of network equipment, etc impede our capacity to carry out timely equipment upgrades contributing to protracted site deployment timelines”, Gbenga Adebayo, chairman, Association of Licensed Telecommunication Operators of Nigeria (ALTON), said. For Okey Itanyi, executive commissioner on stakeholders engagement at the NCC, Nigeria has made significant advancement in the provision of telecoms services over the last 10 years, “but recent developments in the industry with regard to various spurious taxes and levies by the state, local governments and their agents, portend grave dangers for the sector’”.

Itanyi said apart from their legal tax levels, many government agencies at federal, state and local levels had designed all sorts of spurious and illegal taxes imposed on telecoms operators for their towers sited in their vicinity, in a desperate quest to boost internally generated revenue. “Where operators resist to pay the levies by seeking justification for imposing such levies on them, their personnel have been prevented from maintaining existing sites, prevented from building new ones to boost service quality in such areas or the base stations ordered shut down by the government authorities. “All these debar telecoms firms from rolling out BTS to the required number for the expected quality of service.”

First published on Monday, 16 April 2012.