West and North Africa
Nigeria lags behind Brazil, South Africa in telecoms investment per capitaa
With more than 127 million active mobile subscriptions in Nigeria, Africa’s largest economy by GDP significantly lags behind fast growing economies of Brazil and South Africa in terms of telecommunications investment per capita, industry analysts have said.
According to World Bank, Nigeria invested an estimated $6.6 billion in telecoms infrastructure from 2010 through 2012, which works out to a total of about $40 per person. Brazil, on the other hand, has a telecoms investment per capita of $167. Between 2010 and 2012, Brazil and South Africa spent about $127 and $62 more per person, respectively, on telecoms infrastructure. As at March 2014, Brazil has a mobile subscription base of 273 million.
The country has a population of 201 million people. South Africa, on the other hand, has a mobile subscription base of 59.4 million. The country has a population of about 50 million people, according to the 2013 GSM African Mobile Observatory report.
This worrying development, according to analysts, does not bode well for Nigeria’s strategic objective of becoming one of the top 20 economies by the year 2020.
It also highlights the need for significant investment in network expansion initiatives, if Nigeria, Africa’s most populous nation, intends to be at par with economies it aspires to be like.
“To what scale does the current economic, social, and regulatory landscape provide a conducive environment for additional capital investment?” Dubem Arah, deputy manager, financial advisory & investment banking, Financial Derivatives Company Limited, queried.
Telecom companies’ in vestments in network expansion initiatives are expected to rise by over 200 percent this year following intense regulatory pressure over the abysmal quality of service (QoS) being rendered to holders of Nigeria’s 120 million lines, industry insiders have said.
In 2012 and 2013, telcos spent an estimated N347 billion and N979 billion, respectively, on infrastructure expansion. These figures show a 182 percent increase in network expansion spend year-on-year.
“I see telcos more than doubling investments in network rollout this year. The demand for telecoms services is so enormous and operators would want to take full advantage of it,” said Lanre Ajayi, president, Association of Telecommunications Companies of Nigeria (ATCON), in an interview with BusinessDay.
In spite of these investments, however, subscribers are yet to feel the impact in terms of better service delivery. Poor service, characterised essentially by drop calls and incoherent transmission, still remains prevalent in the country.
Earlier in the year, Nigerian Communications Commission (NCC) fined three of Nigeria’s four telecoms operators the cumulative sum of N647.5 million ($3.89 million) for missing their QoS targets for the month of January. The telecoms regulator had also directed telcos to stop the sale of new SIM cards, a move that is not sitting well with them.
The ban has since been lifted, but telcos, according to industry insiders, are lining up big budgets for network upgrades and expansion this year, hopeful that the operational bottlenecks hindering deployment of infrastructure will be resolved. Delays in right-of-way approvals, multiple taxation and lengthy timelines for site approvals have slowed down infrastructure roll-outs in many parts of the country.
Ben Uzor Jnr