Stakeholders: Despite $70bn Investment, Telecoms Industry Needs Further Funding in Digital Infrastructure

Emma Okonji

Worried about the continuous decline in telecoms’ infrastructure investment in the last 18 months, industry experts that attended the Telecoms Industry 2.0 Forum in Lagos yesterday, organised by Financial Derivatives Company (FDC), have stressed the need for further investment in digital infrastructure, despite the $70 billion investment in the telecoms sector since the inception of the rollout of Global System for Mobile Communications (GSM) in 2001.

Although the deregulation of the telecoms sector shortly after the rollout of GSM networks in 2001, led to the evolution of digital economy that catalysed economic growth, the experts were of the view that the telecoms industry was currently facing several challenges as investments in telecoms continue to decline.

In his keynote presentation, the CEO, Chapel Hill Denham, Bolaji Balogun, who played a role in the rollout of the first GSM network in Nigeria by Econet Wireless, said although there had been significant investments in the telecoms sector by Data Centre Operators, Mobile Network Operators, Cable Network Operators, Internet Service Providers, Tower Companies, and Infrastructure Companies, amounting to over $70 billion since 2001, the industry was fraught with challenges that are Impeding growth.

He therefore suggested that the industry needed more investments in digital infrastructure to grow and sustain the sector.

According to Balogun, Nigeria was currently sixth largest mobile market globally and was projected to rise to the third largest mobile market globally in less than ten years, giving its population size and growth, provided there was increased investments in digital infrastructure.

Balogun, further said government could be key enabler in scaling investments in the telecoms sector by placing tariffs on imported goods in order to protect local manufacturing and assembling; co-invest in import substitution start-ups; encourage financial transparency by mandating operators to publish financial statements; create differentiated tax rates for listed companies; and set a requirement for any concession-based company to be listed on the Nigerian exchange.

He said subscribers, operators and the regulators must collaborate to grow a bigger telecoms ecosystem. 

The CEO, MTN Nigeria, Mr. Karl Toriola, who expressed concern over the continued decline in investments in the telecoms sector, said, investments would not thrive in the telecoms sector because of the harsh business environment affecting telecoms growth. He mentioned the difficulties in accessing forex and the high cost of pricing in the areas of diesel and maintenance of base stations, as impediments affecting investments in the telecoms industry.

Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, however said he remained hopeful that there would be more investments in the telecoms sector, but stressed that government must do something to stimulate and re-motivate investments in the sector, to achieve greater investments in the telecoms sector.

Highlights of the forum were the two panel sessions that discussed challenges in the industry and what government and the financial institutions were doing to address the issues.

The CEO of Financial Derivatives Company, Bismarck Rewane, said the forum was organised to provoke thoughts and illuminate the issues affecting telecoms growth in Nigeria.

He said Nigeria has passed through four revolutions in addressing growth in the Nigerian economy including the agricultural revolution, industrial revolution, Information and Communications Technology (ICT) revolution, and the digital revolution that is currently sweeping across the globe.