Telcos Groan as High Cost of FX, RoW Plod Network Expansion

Emma Okonji

Telecoms operators (Telcos) in the country have raised concern over the difficulties faced in expanding their network facilities beyond its current level, thus blaming the situation on high cost of foreign exchange and Right of Way charges imposed by government agencies, among others.

According to the Telcos, they depend largely on Infrastructure Companies (InfraCos) to build more telecoms masts that will enable network expansion, but they however said the InfraCos that were licensed to build telecoms masts like IHS, American Towers Company (ATC), Pan African Towers, and Coloplus Limited, among others, were no longer building telecoms masts because of rising cost of Forex, coupled with the inability to access foreign exchange.

The InfraCos who confirmed the development, said the business of building more telecoms mast has been hampered by high cost of foreign exchange, adding that the situation is also affecting telecoms operators’ network expansion, since the Telcos largely depend on InfraCos for network expansion.

CEO of Coloplus Limited, Mr. Mike Ofili, who confirmed the huge challenges faced by InfraCos in deploying telecoms masts across the country, said the telecoms mast providers must have the buying and consent of telecoms operators, before investing in a single telecoms mast, which he said, cost between N35 million to N40 million, depending on the location.

Speaking on some of the challenges in deploying telecoms masts, Ofili said: “Nigeria imports virtually everything that has to do with telecoms tower equipment and installation. We import the towers, generating sets, batteries, rectifiers, including iron/rod used for reinforcement. The rising cost of dollar and the weak value of the naira against the dollar, coupled with the inability to access foreign exchange, have affected importation of equipment, thus slowed down network expansion, leading to poor telecoms service delivery. The issue of multiple regulation and multiple taxes imposed on telecoms operators by agents of governments, are also affecting the deployment of telecoms masts, which telecoms operators rely on to provide quality service to subscribers.”

According to him, with multiple regulations from state agencies, Telcos are forced to pay for Environmental Impact Assessment fee, Right of Way (RoW) charges, mast installation charges, radioactive emission charges, among other charges that amount to multiple taxes.

“Cost of maintaining Base Transceiver Stations (BTS), also known as telecoms masts, is also very expensive. Nigeria has about 30,000 BTS installed across the country, with some decommissioned while about 30,000 BTS are still active, but with high cost of maintenance. The cost of diesel to power a BTS is on the increase and the financial demand from non-state actors who parade themselves as social miscreants, is becoming rampant and impacting negatively on the running cost of a single BTS, and the situation is adversely affecting telecoms operations across networks,” Ofili said.             

Speaking on some other challenges faced by telecoms operators, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said maintenance of BTS was becoming a major challenge as cost of diesel continued to rise since the removal of fuel subsidy by the federal government. According to Adebayo, the operators have called for increase in telecoms tariff, but the move has always been resisted by the NCC and the telecoms subscribers. He said all other sectors of the Nigerian economy have had reasons to increase cost of service delivery because of the prevailing circumstances in the country occasioned by fuel subsidy removal, but there had always been resistance each time the Telcos talk about price increase.