5G network rollout in crisis over hostile policies

Barely five weeks to the expected kick-off of the deployment of the Fifth Generation (5G) network in Nigeria, issues of foreign exchange, high cost of Right-of-Way, multiple taxation among others still pose prominent hurdles on the way to meeting the deadline.

In line with the Memorandum of Information (MI) prepared ahead of the auction of two slots of spectrum in the 3.5gigahertz (GHz) spectrum set aside for early deployment of 5G services in the country by the Nigerian Communications Commission (NCC), the two licensees, MTN Nigeria and Mafab Nigeria Communications Limited, are expected to commence rollout of 5G services effective from August 24, 2022.

The commission’s auction on December 13, 2021, for its two available lots of 100 MHz TDD slots of 3.5 GHz band for the deployment of 5G network had been won for $547m by MTN Nigeria and Mafab Communications.

But there were concerns that the cost implication of obtaining the spectrum, which was far beyond the reserve price (RP) of $197.4m per slot, would make it very difficult for the winners to roll out as they would have spent way above their budget for the deployment of 5G technology across the nation.

Stakeholders were of the view that although all the operators would eventually get 5G, those that got the spectrum first might be encumbered with recovering cost rather than focusing on network rollout, which might slow them down.

There are five major mobile licensees in Nigeria, namely Airtel Networks Limited, Emerging Markets Telecommunications Services Limited (trading as 9Mobile), Globacom Limited, NATCOMS Development Investment Limited (trading as Ntel), and MTN Nigeria Communications Plc. There are also other service providers offering fixed and wireless broadband services in the country.

However, while MTN, through its Chief Executive Officer, Karl Toriola, has affirmed the readiness of the telecoms giant to roll out services on the 5G spectrum even before the NCC’s timeline, nothing has been heard from Mafab.

An opportunity for stakeholders to hear from Mafab was truncated last month at the 90th Telecom Parliament organised by the Commission in Lagos, where its official was missing during the discussion despite being scheduled to be on the panel.

Speaking at the event, the Executive Vice Chairman of NCC, Prof. Umar Danbatta, expressed optimism that with the successful issuance of final letters of award to the licensees, the timeline for the rollout would be met.

”The final letters of award have been issued to MTN and Mafab Communications, who emerged winners of the 3.5GHz spectrum auction conducted by the Commission on Monday, December 13, 2021”, Danbatta had confirmed.

“The successful completion of the processes leading to the issuance of the final letters is confirmation that the rollout of 5G Technology services in Nigeria is on course, and we are now confident that the year 2022 timeline will be met.

“The goal of the commission is that Nigeria becomes one of the leading nations with 5G technology deployed in a manner that is beneficial to all stakeholders and contributes maximally to the Digital Economy Policy of the federal government of Nigeria.”

However, in a telephone interview with Business Hallmark, Head of Operations of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Mr. Gbolahan Awonuga, identified multiple taxation, high cost of Right-of-Way, scarcity of forex as the major challenges the two operators are striving to surmount in order to meet the deadline.

Awonuga, who confirmed the readiness of MTN to deploy the 5G network, also hinted that the NCC and Federal Ministry of Communications are trying to handle the issue of exchange rate by adding telecoms to the priority list for forex.
“MTN is ready for the deployment of 5G but I cannot speak for Mafab”, he said.

“The federal government is taking care of issues of exchange rate. I think they’re making telecoms part of their priority list for forex. Don’t forget we’re not manufacturing those equipment needed for the deployment here; we’re going to import them. And this will take a lot of forex.

“So, I think the NCC and Federal Ministry of Communications are working seriously on that.”

On the issue of high cost of Right-of-Way, Awonuga regretted that the states are looking at the short-term benefit of revenue collection from the telcos, without considering the long-term benefit of opening up for investors to come.

“Don’t forget that states want money. They’re looking for ways to get revenue. But unfortunately, they’re looking at the short=term benefit of revenue collection from the telcos.
“But they’re supposed to open their states to deploy massive infrastructure. We need to open up all the states, when we open up all the states, then investors will come. But unfortunately, they’re more interested in quick revenue, without considering the long-term benefit that will come to the states.

“So when you use all your resources just to get permit and access, what is the remaining that you will now use to actualise your network? Those are the issues – multiple taxation, high cost of Right-of –Way and so on.

“The federal government has tried to harmonise all the Right-of-Ways to N145 per linear metres, but some states are not agreeing to that.”
The NCC had at the 90th edition of the TCP identified some challenges in the deployment of 5G in Nigeria which may lead to resistance if not addressed, saying such initial resistance was fuelled largely by misconceptions arising from conspiracy theories.

According to Prof. Danbatta, despite all the potentials and the opportunities inherent in the technology as identified by the International Telecommunications Union (ITU), there were some challenges which need to be quickly addressed for the acceptability of the network by the consumers in the country.

The ITU, he said, identified that 5G networks faced considerable challenges which include the requirements for more spectrum and vastly more spectrally efficient technologies, more than what the current 3G and 4G systems in Nigeria require.

He noted that there is a challenge ITU described as the intrinsic propagation characteristics of millimetre waves, which propagate over much shorter distances and will, therefore, significantly require a greater number of base stations with the implication that deployment of infrastructure will become more complex and will require radio equipment being mounted on diverse structures.

Danbatta said: “Considerable work is required for implementing fiber services and ensuring availability of wireless back-haul solutions with sufficient capacity, such as microwave and satellite links, and potentially with high-altitude platform stations (HAPS) systems where they are deployed.

“There are other challenges, such as the need for skilled professionals with requisite knowledge of technology, fewer number of 5G-enabled devices, managing expenses involved in 5G network deployment as well as challenges with security and privacy concerns.
“We must not forget that across the globe, what happened was that the deployment of 5G technology was received with mixed reactions and in some isolated cases hostility even in countries adjudged to be technologically advanced.

“This initial resistance was fueled largely by misconceptions arising from conspiracy theories. It is a challenge that stakeholders must collaborate to address as Nigeria rolls out 5G Technology Services.

“The industry must then turn the challenges into opportunities rather than seeing them as obstacles, the issues that should militate against or slow down the deployment of 5G Technology are themselves opportunities that can potentially create new revenue streams or new sub-sectors in the industry.”

According to the latest Ericsson Mobility Report, 5G subscriptions will hit one billion this year while it will reach 4.4 billion by 2027 globally. The Report said North America is forecast to lead the world in 5G subscription penetration in the next five years with nine-of-every-ten subscriptions in the region expected to be 5G by 2027.

The 2027-timeline also includes projections that 5G will account for 82 per cent of subscriptions in Western Europe; 80 per cent in the Gulf Cooperation Council region and 74 per cent in North East Asia.

In India, where 5G deployments have yet to begin, 5G is expected to account for nearly 40 per cent of all subscriptions by 2027.

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