Telecom firms invest N613.13b to drive up customer base
By Jeph Ajobaju, Chief Copy Editor
MTN and Airtel both invested N613.13 billion in network upgrade in 2022, most of it concentrated on 4G and 5G technology to attract and retain more customers, as gleaned from their financial statements.
MTN spent N504.33 billion on network rollout, Airtel invested N108.79 billion ($236m), with their total investment up 14.19 per cent on N536.91 billion in 2021.
“Capital expenditure was N504.3billion, up 23.5 per cent, due to acceleration in coverage expansion, focusing on the 4G and 5G networks and our rural telephony programme,” MTN said.
“We deployed 9,027 4G sites, 588 5G sites and 778 rural sites. 4G accounted for approximately 76 per cent of the total sites deployed during the year. Core Capex, excluding the right-of-use assets, increased by 18.6 per cent to N361.0billion, slightly above plan to enable us to capture growth opportunities.
“Our accelerated Capex investments allowed us to capture growth opportunities in the data space while mitigating foreign exchange and supply chain disruption risks and the impact of rising inflation.
“Notwithstanding, the Capex intensity of 17.9 per cent was in line with our target levels, reflecting our disciplined approach to capital allocation. Free cash flow was up by 20.7 per cent to N566.0billion.”
Airtel Africa Chief Executive officer Segun Ogunsanya explained that “over the last nine months we have spent almost $490 million on 4G and 5G spectrum across key markets to improve network capacity and quality, future-proof the company for continued growth opportunities and facilitate economic progress in all our markets.”
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Impact of 5G push
5G is expected to headline network investment in Nigeria for the next couple of years, according to reporting by The PUNCH.
In 2021, the Nigerian Communications Commission (NCC) auctioned its first two 5G licences, snapped up by MTN and Mafab Communications.
In 2022, Airtel got a 5G licence after it emerged the sole bidder in a new auction.
MTN and Mafab have launched 5G services in nine cities – Lagos, Abuja, Kano, Enugu, Port Harcourt, Kaduna, Ibadan, Owerri, and Maiduguri.
The NCC enthuses 5G would improve telecoms network by enhancing connection speed, mobility, and capacity.
“Though the deployment will start from the state capital and gradually extends to other areas across the state, it is important to state that the 5G network will bring substantial network improvements, including higher connection speed, mobility and capacity, as well as low-latency capabilities to communications services in Nigeria,” NCC Executive Vice Chairman Umar Danbatta said.
Global System for Mobile Communications Association (GSMA) says telcos would need to invest $500 million to roll out 5G in 10 major cities in Nigeria.
Ericsson recently said 5G subscriptions would only constitute around 14 per cent of mobile subscriptions in Nigeria by 2028.
And the Economist Intelligence has alerted returns on 5G investment would be low in the short term.