Huge investment, others top telecoms’ prospects in 2017

Posted on Jan 5 2017 - 1:55am by Kunle Azeez

Among other things, Nigeria’s telecoms sector is expected to experience further investment growth this year, though there are challenges to be addressed. KUNLE AZEEZ reports

 

After the opportunities and challenges that characterised Nigeria’s telecommunications space in 2016, the 2017 has been predicted to be full of opportunities and challenges both for the regulator and operators with profound impacts on telecoms consumers.

Till date, Nigeria telecom industry has grown significantly to a $68 billion industry with over 153 million voice subscriber base, about 97 million Internet subscriptions and teledensity of 107 per cent while there ongoing initiatives by the regulator to further engender the industry growth.

Investment projections

Despite having reached an investment threshold of $68 billion last year, industry experts predict that the sector is poised to attract huge investments this year.

With anticipated new investments to deepen broadband infrastructure in the next few months, the experts say the Nigerian telecommunications sector, is set to add about N799 billion through telecoms licences and capital investments.

As gathered, the NCC targets N189 billion ($619.6 million) earning from spectrum licences in the course of this year, thus boosting the sector’s contribution to the Gross Domestic Product (GDP).

In the first quarter of 2016, the sector contributed N1.41 billion; N1.58 trillion in second quarter and by the end of third quarter, the sector added N1.398 trillion to GDP.

NCC also expects to earn N39.04 billion ($128 million) from the remaining eight lots of the 2.6 gigahertz (GHz) spectrum licence.

InfraCos

It is projected that the telecoms regulator would also earn about N50 billion from the remaining Broadband Infrastructure Company (Infraco) Licences that will be issued this year in the remaining five geopolitical zones.

Also, NCC is working on auctioning the 70/80 GHz spectrum bands. There are also the700/800MHz bands starting from July 17, 2017 as television broadcasting stations move from analogue to digital broadcasting, relinquishing the frequencies from the Digital Switch Over (DSO) thus creating Digital Dividend Spectrum in the 700MHz/800MHz bands which would be sold to telecoms companies. NCC should bring a minimum of N100 billion altogether.

Operators’ Capex

Sources also revealed that on the other hand, telecoms operators are expected to spend N610 billion ($2 billion on capital expenditure (Capex) to rollout more 2G and 3G base stations, fibre-backhaul their base stations to 4G, expand fibre optic cables to unserved and underserved areas as well as ensure densification of the network for optimum quality services.

The NCC has been beckoning on local and foreign telecommunications investors to avail themselves of the opportunities in the various spectrum licences auctions that would take place in 2017.

The success of the exercises would help Nigeria surpass the 30 per cent broadband target set in the National Broadband Plan 2013-2018.

Already, the ITU-UNESCO Broadband Commission for Sustainable Development’s September 2016 report indicates that Nigeria’s broadband penetration has reached 20.95 per cent.

According to NCC, many operators have been demanding release of more spectrum, noting it would provide opportunities for them to rollout more services on a larger scale.

Analysis shows that the Nigerian telecoms sector has recorded very significant growth in the last 15 years from 500,000 active lines to the current 153.5 million with teledensity presently at 107 per cent, while internet connectivity has also moved from 50,000 in the year 2001 to 97 million at the moment.

Tech investment critical

“Technology investment is crucial to the industry’s ability to keep pace. High-speed broadband is increasingly viewed as a fundamental human right, with calls for the industry to increase investment in networks to deliver improvements in fibre-optic connectivity and 4G coverage and this should be expected his year,” said President, Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola. According to him, technology is also a key enabler of competition and therefore a driver of innovation.

He said technology development has enabled new entrants offering VoIP and cloud-based communication services and we should expect more innovative services from the Mobile network operators (MNOs).

National Roaming in the offing

Since coming onboard as the Executive Vice Chairman of NCC, Prof Umar Danbatta has expressed his determination to launch national roaming service into the country and this is expected to be taking shape his year, notwithstanding the divergent views sounding its desirability for the industry and possible effect in investment growth.

National mobile roaming (NMR) is the ability of a cellular customer to automatically make and receive voice calls, send and receive data, or access other services, including data services, when travelling outside the coverage area of the home network, by means of using a visited network.

But regardless of the opposition to NMR, the NCC is going ahead with its implementation starting from this year.

“National mobile roaming is a must. It is not a matter of whether or not I would happen. I is already part of the licensing conditions given to the operators,” says NCC’s Head, Legal and Regulatory Services, Mrs. Yetunde Akinloye.

“So, what we are working on through various stakeholders, especially the service providers, is the framework for launching the service to life easier for telecoms subscribers. So, whether we like it or not, it is coming soon.”

Growth of IoT

Nigeria, like any other countries around the globe, is going to experience traction in the uptake of Internet of Things devices and services this year, according to various studies by Dell, Ericsson and Gartner.

The market for connected products is still at an early stage, but rapid growth is predicted as applications gain traction, particularly in the fields of automotive, healthcare, energy and mining. Research firm, Gartner, particularly, predicts that the number of connected devices in 2020 will in twice the number of mobile devices, at 25 billion connections.

“If we must secure the opportunities provided by the IoTs, Nigeria and, indeed, Africa must understand the role and impact of software in actualising the globalisation order while we pursue much deeper internet penetration,” said Africa Chair on Institute of Electrical and Electronics Engineers, (IEEE) World Forum on IoT, Dr. Chris Uwaje, said.

Other expectations

More inroads are expected to be made this year, especially in the area of better regulation of the Value-Added Services segment of the industry, improvement in the quality of service (QoS), improved sanity in unsolicited text messaging following the introduction of the Do Not Disturb (DND) scheme by the regulator and greater broadband penetration resulting from the rolling out of fourth generation (4G) Long Term Evolution (LTE) networks by the various networks, making the cost of data continuously fall due to competition.

Analysts have also predicted that with improvement in QoS, there would be less desire for mobile number portability while telecoms sector will continue to fuel growth in all other sectors of the economy as digital startups continue to increase, thereby transforming the country into a fully- digital economy where ICT is leverage both at private and public sectors to drive service deliveries.

Conclusion

Industry stakeholders have said that 2017 would be a year of opportunities and challenges for the industry, stressing that effective regulation would be required to ensure a balanced industry where there is a level-playing ground for all.

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