InfraCos Groan over High Cost of Maintaining Telecoms Facilities, Seek Government’s Intervention

Emma Okonji

Infrastructure companies (InfrCos) such as IHS, American Towers Corporation (ATC), Pan African Towers, and Coloplus that provide and maintain telecoms facilities like co-location masts, are complaining over the high cost of maintaining such facilities, due to the continuous hike in the prices of diesel, fuel among others.

InfraCos are initiative of the Nigerian Communications Commission (NCC) to boost telecoms infrastructure and drive broadband penetration, but the existing InfraCos are worried about the high cost of expanding and maintaining telecoms facilities across the country.

Director at Coloplus, Dr. Mike Ofili, who spoke with THISDAY about the impact of the rising cost of diesel, fuel and logistics on the maintenance of telecoms facilities, said the InfraCos had long-term agreement with telecoms operators to build, maintain and service telecoms facilities, but explained that they could not terminate the agreement half way because of the rising cost of fuel and diesel, including cost of transportation and logistics.

He however said they would continue to abide by the earlier agreement reached with telecoms operators, even though the InfraCos are currently operating at huge loss.

He therefore called for the immediate intervention of the federal government to support InfraCos in the form of grants or special subsidy that would enable them to continue to expand and service existing telecoms facilities across the country.

He warned that any delay by the federal government to rescue InfraCos, may lead to total collapse of the telecoms sector.

Narrating the challenges faced by telecoms operators, Ofili said: “Last year, the price of petrol was about N400 per litre, but today, petrol is sold for between N1,000 and N1,200 per litre in some parts of the country, which is over 100 per cent increase. Cost of new generators has gone high and cost of logistics in terms of transportation of goods has also gone high, and its is impacting hugely on the revenue of InfraCos. As at the time we signed the contract with telecoms operators, it was a long-term agreement and prices of things have gone so high since then and we cannot stop half way to review the agreement, just because of our increased overhead cost. Even the telecoms operators are feeling the pains because subscriptions have gone down and subscribers are cutting down on their daily expenditures in order to survive the harsh economy.

“So what we need at the moment to salvage the situation is government’s urgent intervention. InfraCos need the federal government to intervene with special grants and subsidy that will enable us continue servicing telecoms facilities and maintain 99 per cent uptime in their operations. Any delay from the federal government can plunge the Nigerian telecoms sector into total collapse.”

Corroborating with the InfraCos, the Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, told THISDAY in a telephone interview that the hash business environment faced by telecoms operators, had also impacted negatively on InfraCos that provide telecoms services.

According to Adebayo, most of the telecoms operators like Airtel, MTN, 9mobile and ntel, outsourced their mast maintenance and the maintenance of other telecoms facilities to InfraCos, but operators like Globacom still maintain their sites through company staff, even though MTN also maintains some of its telecoms facilities through its in-house staff.

“So telecoms operators and the InfraCos are passing through difficult challenges in maintaining telecoms facilities,” Adebayo said.

“The InfraCos feel the impact of the harsh economy the most, because they maintain most of the telecoms sites across the country. A percentage rating will show that in every 10 sites in Nigeria, the InfraCos maintain about eight of those sites, and the sites are mostly co-location sites. The sites are maintained by InfraCos on behalf of telecoms operators, under a long-term agreement, and the InfraCos are not able to vary the long-term agreement even in the face of price fluctuations in the supply chain,” Adebayo added.

Adebayo also suggested the need for government intervention to rescue both the telecoms operators and the InfraCos.

According to him, government should consider selling fuel to InfraCos at a rate different from the commercial rate, to enable them survive, while offering quality telecoms services.

He also suggested special line of security for InfraCos when moving their facilities from one part of the country to another. Adebayo stressed that should InfraCos fail to offer quality services to telecoms operators, the operators would not be able to meet up with the service level agreement that they had with the telecoms regulator, for the benefit of telecoms subscribers.