Attacks on telco facilities take toll on Nigerian economy

Ben Uzor Jr

A raft of bomb attacks on telecommunications installations in the Northern part of Nigeria is taking its toll on the economy. Over 30 Base Transceiver Stations (a critical network infrastructure required in delivering telecoms service) owned by some major operators such as Airtel, Globacom, and Etisalat have so far been destroyed. The cost of building a Base Transceiver Stations (BTS) 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 (about N39m). There were a little over 20,000 BTS sites in Nigeria serving a population of over 150 million people as of the end of year 2011. Expectations are that operators will have to deploy additional 50, 000 BTS. A BTS can cover an area in a radius of up to 30 km depending on terrain, frequency and tower height. Some base stations can cover as much as 120 km for rural applications.

In situation where a BTS goes down for any reason, the communication traffic is transferred to the nearest BTS. This obviously would lower the level of service quality because as traffic increases. Following this development, critical sectors such as banking, security and manufacturing, which depend on telecoms for efficiency, have been cut off from the global economy. Analysts told BusinessDay that the mindless destruction of telecoms infrastructure is having a negative impact on individuals and businesses in the region, whose livelihoods increasingly depend on the availability of telecoms networks. Besides, stakeholders in the sector have expressed reservations over the development, saying it could send negative signals to foreign investors that Nigeria is not a safe place to do business.

The expansion of telecom facilities in the country increased the inflow of Foreign Direct Investment (FDI) from $18 billion in 2009 to $25 billion, this year. Experts say telecom facilitates cross-industry linkages, efficiency and productivity. BusinessDay learnt that many banks in the affected areas have been unable to deliver optimal services. Many of the banking facilities such as ATM, online financial transactions, and international credit and debit card facilities run on telecoms backbone. Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators (ALTON), spoke on the consequences the attacks would have on the current efforts to improve quality of service across the national economy. According to him, the development will slow growth in the sector and set the industry back considerably, as requisite funds that could have been invested in deploying more base stations would now be used for replacements.

Adebayo said the attack was not on the northern part of the country, “but this is an attack on Nigeria as a whole. Those who will feel the impact are the consumers in that area.” The ALTON chairman said operators were relying on the assurance of the Inspector- General of Police, Muhammed Abubakar, to ensure 24 hour surveillance on all the sites across the north and other parts of the country. He further affirmed that operators would not cease rendering service in the north, even though at higher cost and risk. Chris Nwachukwu, a telecoms engineer, said one of the principal misfortunes of the attack was that the long list of challenges confronting operators had been expanded by yet another incapacitating one. Pre-existing challenges that have limited the achievements of the sector, especially in the area of quality of service so far include: inadequate power from the national grid, theft and vandalism of equipment, sabotage, multiple regulation and multiple taxation.

MTN for instance, experiences more than 70 cuts on its fibre network nationwide on a monthly basis. The network has suffered violent attacks on some of its facilities before, carried out by people intent on stealing. There were six fatalities in Aba, Abia State during one of such attacks on an MTN base station in 2010. There are strong indications that the Federal Government might witness a steep decline in revenue from the taxes and levies paid by operators.  Over the years, the telecoms industry has significantly boosted the receipts of many government agencies. Already, telecoms networks have started counting their losses and expressing the fears that the attacks and the cost of replacements would push their costs northwards and profits southwards.