Tackling telecoms sector’s Achilles’ heels

THE advent of telecommunications and its growing access will continue to drive development process across all sectors of the economy. Indeed, the impact cuts across manufacturing, banking, education, agriculture, government, and lately, the political landscape.

   In fact, recent World Bank studies indicate that for every $1 invested in telecommunications infrastructure, more than $6 is generated in returns on especially local employment and general economic growth. 

   Revenue from telecommunication services alone was estimated at $1.2 trillion as at 2002. Telecommunications networks are now making it possible for developing countries to participate in the world economy in ways that were hitherto not possible.

      In Nigeria, 13 years after the issuance of digital mobile licences in a liberalized telecoms regime, the country’s physical landscape is now an improvement from what it was. A massive amount of infrastructure has been erected across the country, by the telecoms industry.

   Base Transceiver Stations (BTS) or base stations are probably the most visible of such infrastructure. BTS is the equipment, which helps to connect mobile devices such as phones and tablets with the network operators. It has a tower on which radio antennae and other devices are mounted. 

   Typically, a network operator’s signals become accessible in a community after it has installed and activated one or more base stations in such vicinity.

   It has always been a struggle to erect this infrastructure. In the early days, for instance, routes were uncharted and it was not uncommon to see engineers physically creating roads through virgin terrain, for the purpose of installing BTS. There were also the sundry permits that needed to be obtained from government and its agencies. 

   However, the industry has managed to put this infrastructure on the ground nationwide. At the last count, all of the telecommunications networks combined have so far erected in excess of 25,000 base stations across Nigeria. 

    At a Nigerian Communications Commission (NCC) forum in Lagos last year, it was disclosed that the country has about 29,000 BTS spread across the six geo-political zones. 

   Installing a base station is more difficult than it ever was. About 10 years ago, a new base station could be up and running from the time an application is made to government to when it is eventually installed and activated, within three weeks. This way, with several hands acting in concert, it was possible to erect multiple base stations across cities simultaneously. 

   From The Guardian findings, the process of erecting a BTS has become ensnared by bureaucracy such that it could take up to six months to erect a single base station. Perhaps, this should put in perspective the enormity of the logistic challenge that has entailed erecting 25,000 disparate base stations across the country including on highways and inter-city roads.

   But as the quality of service on our mobile devices has since shown, 25,000 BTS for a country like Nigeria, is grossly inadequate. Not only is demand consistently growing, demand patterns are also changing. Whereas voice used to pose the highest demand on network capacity a few years ago, today data is almost rivalling voice. With the growing evolution towards mobile broadband and increasing disposition of different demographic segments to consuming data services, network capacity demand patterns have changed considerably, with attendant pressures on the quality of service.

    It is in order to provide mobile broadband services that the networks have long introduced third generation base stations (3G base stations) while continuously upgrading the legacy second-generation base stations (2G base stations). 3G base stations are differentiated by their comparatively more prodigious capacity, relative to the legacy 2G base stations and very importantly by their ability to support mobile broadband and all of its service manifestations. 

   Indeed, in Nigeria some networks have since begun installing fourth generation (4G) base stations. 4G is an improvement, both in terms of capacity and quality, on the 3G base stations. 

    By analyst’ calculations, Nigeria’s telecommunications networks would need to deploy close to 15,000 third generation base stations (including upgraded 2G base stations), in 2015 in order to meet expected demand. Overall, to achieve a respectable quality of service in the networks, it is projected that no less than an additional 25,000 base stations would need to be deployed in the course of the next five years.

   At the Lagos NCC forum, it was noted that the country requires about 80, 000 BTS to meet the growing demands for telecommunications services. 

    Transmission is another critical component in the telecommunications operators’ infrastructure value chain and in a nutshell entails the propagation of signals, be they voice or data, from one place to another. 

   Over the years, big players like MTN and Glo have invested considerably in erecting cross-country transmission infrastructure. MTN for instance, initially invested in the construction of a nationwide microwave radio transmission backbone and followed this up with yet another backbone. Fibre-optic cables enable far higher capacity than microwave radio and are considerably more reliable being less susceptible to weather and other climatic vicissitudes. 

    Erected at a huge cost, MTN’s countrywide fibre optic network is said to span more than 10,000 kilometres and criss-crosses huge swathes of Nigeria. Indeed, it is reputed as the most extensive privately owned transmission infrastructure in Africa. Glo’s fibre-optic network is also considerably extensive.

   Indeed, in addition to Glo’s in-country transmission network, it has also invested considerably in a sub-sea fibre optic network, Glo One, that begins from Europe and terminates on the coast of Nigeria with enormous amounts of broadband capacity. 

    Like Glo, MTN, through its membership of a consortium known as WACS, has invested in a similar under-sea fibre-optic transmission network that links Europe and the coasts of Africa with enormous broadband capacity.

   Another company, MainOne, has similarly, long invested in a cross continental fibre-optic network that spans from Portugal in Europe to the coasts of Ghana and Nigeria.

   The result is that currently, a simply humongous amount of broadband capacity resides on Nigeria’s coasts, waiting to be transported to Nigeria’s hinterlands. 

   The Minister of Communications Technology, Dr. Omobola Johnson, who admitted that the demand and pressure on the existing telecommunications infrastructure has reached its breaking point, stressed that this highlights that though investment in the sector has improved, it was still not sufficient to enable supply meet with demand.

   She said as a responsible government and regulatory body, steps must be taken to address the situation. Johnson disclosed that as a result of submarine cables, Nigeria has about 11 terabytes bandwidth capacities, which are grossly underutilised.

   Chief Executive Officer of MainOne Cable, Ms. Funke Opeke, said that less than 10 per cent of the bandwidth capacities have been utilised. She stressed that the challenge has always been lastmile infrastructure that will take the capacity from the shores to the hinterland for maximum utilisation.

    According to her, if the broadband is not first made available to cities, it would be almost impossible to link them

.

    However, given the poor state of Nigeria’s electricity infrastructure at the moment and the nature of the power industry itself, it is going to take several years of massive investment by the new owners of the power companies for the power sector to experience a remarkable shift in generation and distribution.

   What this means is that in the short to medium term, service providers must necessarily continue to invest heavily in their own power generation infrastructure including generators, inverters, batteries and specialized electronic/electrical equipment to manage voltage, among others.

    Clearly, therefore, while it has over the years, invested massively in the erection of such critical infrastructure as base stations, transmission networks and power generation, the telecoms industry still needs to invest heavily in these areas into the future. Consistent heavy investment is imperative if quality of service is to attain generally acceptable levels, and more importantly, if Nigeria is to fully optimize the benefits of the investments that have been made so far and indeed the benefits of the digital economy which telecoms has ushered to Nigeria.

   By some informed analyst estimates that more than $32 billion may have so far gone into service operators’ capital expenditure over the last 13 years as the industry erected thousands of base stations and tens of thousands of kilometres of transmission infrastructure, among others. The future would require even much more investment than this, especially with the evolution of demand patterns in the industry and the imperative of deploying superior new-age equipment such as third and Fourth Generation base stations. 

   The medium term would also require continuous investment in power generation infrastructure, especially as Nigeria’s power needs are not likely to have been met in the medium term especially given the relatively long gestation that investment in power typically entails.

   Every effort, therefore, must be made to entice and encourage the telecoms companies to continue to invest in the country’s infrastructure. One such approach would be to review license conditions. Current conditions of the 2001 digital mobile license stipulate five-year license renewals after the first 15 years. 

    A telecoms expert, Kehinde Aluko, opined that 15 years may have appeared so far away in 2001 and the terrain so poorly understood adding that “today, given the scale of investments that need to be made to sustain service quality and enable Nigerians truly benefit from the digital revolution, there is clearly an imperative to increase the license renewal intervals to 15 years, if investors are to be encouraged to part with scarce resources.