Full 5G launch in each state will cost $50m
By Jeph Ajobaju, Chief Copy Editor
Nigeria needs $500 million and 6,000 base stations to mount fifth generation (5G) mobile technology in 10 cities, according to a calculation announced late last year by the Global System for Mobile Communications Association (GSMCA).
Going by that estimate, launching 5G in each state requires $50 million. It amounts to $1.85 billion when multiplied by 36 states plus Abuja.
But the Central Bank of Nigeria (CBN) is not fazed by the sum, and has placed the telecom sector on the priority list for access to foreign exchange (forex), inspired by
Verizon and AT&T launch of 5G across the United States on 19 January.
Coast to coast 5G rollout in the US had been delayed multiple times because of concerns expressed by activists and by aircraft manufacturers Airbus and Boeing that the spectrum would affect flight safety.
Forex priority the CBN gives to MTN, Airtel, Glo and other carriers means they can now access enough dollars to import major equipment for 5G deployment and enhance other activities related to forex.
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Acquisition of equipment
Association of Licensed Telecoms Operators of Nigeria (ALTON) Chairman Gbenga Adebayo had complained in November last year that a lack of access to forex and other factors were affecting the growth of the sector.
Now, he says the latest decision by the CBN means telcos can access adequate forex to fulfill their international obligations and invest in infrastructure as well.
“We are grateful to the CBN for this listing, for the priority consideration. We are also grateful to the minister [Isa Pantami] for his intervention in this regard. This will allow players to honour our international obligations.”
“International traffic is exchanged with foreign countries, so operators can honour the obligations (with equipment suppliers and bandwidth providers), all of those activities which supply support for the industry are denominated in foreign exchange,” Adebayo told The PUNCH.
“The other thing is that it enables procurement of equipment. It makes it easier to procure software and hardware. It will help the development of the sector.
“Also, now that we are talking about the 5G rollout, the players will have better access. It is for the good of all, we are grateful to the authorities for making this happen.”
Engagement with the government
Another source in ALTON said the telecom companies got forex priority as a result of engagements with the government through Pantami, Nigerian Communications Commission (NCC), and National Security Adviser Babagana Monguno.
Said he: “Prior to this time, it was very difficult as we had to source our forex. But we had to engage the federal government through the NCC, the minister, and the office of the National Security Adviser.
“We have been on the issue of exemption for a long time. As you know that the manufacturing and power sectors [are] on the priority list, while telecoms [were] left out.
“Most of the equipment we are using is imported. We use the same equipment as others in foreign countries.”
Improvement of network
Alliance for Affordable Internet (AAI) National Coordinator Olusola Teniola enthused that latest development will help improve network capacity.
“The bedrock of the digital economy is telecommunication, and it is the enabler for most modern society,” he said.
“For us in the industry, we are happy and we know this will only improve our capacity to build networks that have been delayed, slowed down, or even cancelled.
“This means that the network coverage of the country will be improved with the procurement of new network facilities; it also means there will be enthusiasm on the part of those looking to invest in the country.
“This is because investors will know that one of the impediments to investment has been removed – the ability to get forex out of the country.”
A source in a telecom firm added: “We are in a business that is FX denominated. We don’t produce anything locally, we import everything. Don’t also forget that 5G is around the corner, so we need to bring in a lot of equipment.”