Telecoms operators spend an average of N10bn as cost of diesel to power their base stations annually due to persistently poor electricity supply. The operators, whose businesses rely largely on power, currently have about 27,000 base transceiver stations located at different parts of the country with operators spending between N8bn and N10bn to run the sites.
Disclosing this during a media interaction in Lagos yesterday, the Chief Executive Officer, Airtel Nigeria, Mr. Segun Ogunsanya, said: “The power costs of a site connected to the power grid are only about 1/6th those of a fuel- powered site, but only about 10 per cent to 15 per cent of BTS are connected to the electric power grid.
“The implications of such absence of reliable power infrastructure are far-reaching. Nigerian operators spend around N8bn to N10bn a year in diesel costs to power up their base stations. “Such costs account for about 60 per cent of operators’ network costs. Primarily because of such fuel costs, average network costs in Nigeria are two to three times higher than in a number of other African markets.” Ogunsanya said the multiple taxation imposed on the telecoms operators was another challenge facing the industry.
“There are other issues bordering on multiple regulations, optic fibrecuts, community issues and other problems that are making it difficult for the common man to experience the desired quality of service. “Recently too, we saw cases of flooding and activities of terrorist groups that adversely hampered quality of service.”
On how the industry has impacted on the economy, Ogunsanya said the direct contribution of Nigerian telecoms operators to the country’s Gross Domestic Product was estimated at N400bn as at 2012. He said: “Taxes and regulatory levies are the most important source of direct contribution from network operators in Nigeria, accounting for about 55 per cent of the direct contribution. “By our estimates, network operators pay close to N160bn in taxes annually, with another N55bn paid in various forms of regulatory levies.
“In addition, the Airtel CEO said Nigerian operators had paid close to $4bn (about N640bn) in license and spectrum fees since 2001. “Further, three per cent to five per cent of Nigerian telecoms services revenues are paid out in wages and benefits for some of the highest skilled jobs in the economy. Other contributions to the economy include payments to contractors, corporate social responsibility programmes and dividends to shareholders.”
Various CSR programmes, he said, had been of particular significance, with many operators investing on such programmes, despite not breaking even on their investments. He added: “Telecoms operators also contribute to the economy through their wider ecosystem.
The ecosystem includes the entire industry value chain, from contractors for base station deployments and system integrators to resellers of devices. “The third channel of contribution comes through multiplier effects and productivity gains from the society at large using telecoms services.
“The telecoms sector is a major contributor to foreign direct investment in Nigeria, along with the banking and oil and gas sectors. Cumulative Foreign Direct Investment in Nigeria over the 2001-2011 periods has been around $45bn; the telecoms sector has accounted for around 35 per cent of that amount, with operators using capital to acquire licenses, acquire or prop up local operations, and expanding their networks.”
Source: National Mirror
TELCOS SPEND N10BN ANNUALLY TO FUEL BASE STATIONS
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