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By Chinenye Anuforo
Nigeria telecommunications industry has been facing a significant downturn, marked by dwindling investments over the past few years. This decline, largely attributed to the devaluation of the naira, has inflated the cost of importing critical telecom infrastructure.
Major players in the sector, including MTN and Airtel, have reported substantial losses due to foreign exchange challenges. The exorbitant cost of acquiring dollars to fund their operations has made it increasingly difficult for these companies to expand their networks and improve service quality.
For instance, MTN, with a subscriber base of 79.7 million as of December 2023, reported a first loss after tax of N137 billion since its 2019 listing on the Nigerian Stock Exchange in 2023. The telco incurred FX losses of N740 billion ($815.79 million at N907.1/$).
Airtel Africa, which had 50.9 million subscribers in Nigeria as of March 2024, reported a loss after tax of $89 million for its full year ended March 2024, primarily due to FX headwinds in Nigeria and Malawi. It lost $1.26 billion to derivative and FX exposures, with $770 million attributed to the naira’s devaluat
The Association of Licensed Telecoms Operators of Nigeria (ALTON) has warned of potential network disruptions if the situation persists, as operators grapple with soaring operational costs.
In response to the crisis, the Nigerian Communications Satellite (NIGCOMSAT) has proposed strategic partnerships with telecom operators as a means to alleviate the burden of dollar scarcity. By collaborating with operators, NIGCOMSAT aims to leverage its procurement power to secure telecom equipment at more competitive prices.
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Speaking during an interview with journalists, at the KA-band VSAT Installation training in Lagos, the head, marketing and stakeholders’ engagement, NIGCOMSAT, Olufunke Fagbeja, said NIGCOMSAT believes in strategic partnerships, adding that, “We believe in partnering with telecoms operators to deliver service and to deliver value to Nigerians. When we talk about the regulator, we are under one umbrella, which is the Ministry of Communications, Innovation and Digital Economy. However, as much as we are open to strategic partnerships, of course, it depends on the other party too.
“We are taking steps to ensure or to foster this partnership. For example, we have been having talks with some operators with regards to strategic partnerships. So, this is something we are working on and we believe it will bear fruit and we will see the value with regards to services.”
On easy access to telecom equipment, Fagbeja said, though NIGCOMSAT is not an Original Equipment Manufacturer (OEM) as it does not manufacture equipment, but it has entered into partnership with manufacturers of some of the equipment needed in the telecom industry.
“We partner with these manufacturers and we purchase our equipment directly from them. What this means is that we can get the equipment at a better rate, at a discounted rate, to give to our customers like operators. So we can assist operators to get the equipment (at a much reduced price) needed to expand their operation in the country”, she stated.
Furthermore, the satellite company is exploring opportunities to support local manufacturing of telecom components through its accelerator program, which seeks to foster innovation and technology development in the country.
“We are also looking at producing some of the equipment locally, by empowering startups through the accelerator programme. The programme is aimed at propelling advancements in satellite technology and bolster Nigeria’s position in the global tech arena,” she added.
