FX ISSUES PREVENT THE EXPANSION OF TELECOM SERVICES

The incapacity of the players to get foreign money infrastructure and install new ones will greatly impede future growth of telecommunications services.

The New National Broadband Plan 2020–2025, which sets forth the country's broadband goals, and the implementation of the infrastructure necessary for 5G networks have both been threatened by the lack of access to FX, according to stakeholders.

In two years, 90% of the population will have access to broadband.

Although Prof. Umar Danbatta, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), claimed that the country had reached a 50% current level of broadband penetration is between 46% and 49%.

Aside from that, it was learned that operators' inability to access FX has hindered the rollout of 5G to more cities. It was said that 60,000 subscribers to 5G services in 12 states of the Federation. The winner, Airtel, launched services in June and has cover Lagos, Ogun, Rivers, and Abuja. Airtel received its license in December 2022.

On the other hand, MTN stated that 5G service is roughly in 12 cities. MTN stated that it prioritized increasing coverage of its 4G and 5G networks in order to support the growing data traffic.

It reported that its overall data traffic surged by 45.6%, with 4G traffic making up 82.5% (up 5.2pp) and 5G making up 21% on all 5G-colocated clusters.

In addition to Lagos, Abuja, Port Harcourt, Kano, Owerri, Ibadan, Maiduguri, Abeokuta, Ife, Warri, Enugu, Ife, and Ifo, the telecom has deployed 700 5G.

The sector has continued to have problems accessing foreign currency, according to Gbenga Adebayo, chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON).

The industry is heavily reliant on FX, according to Adebayo. Therefore, the expansion and growth in the FX market would be impacted. The value of our local currency is addition to FX. It denotes that we are pricing in naira and that some of our expenses are depending on FX.

The topic of forex was discussed at the meeting when Sunil Mittal, the chairman of Bharti Airtel, Segun Ogunsanya, the chief executive officer of Airtel Africa, and other senior management of the telecommunications firm visited President Bola Tinubu.

Statistics from the NCC, the Foreign Direct Investments (FDIs) that entered the sector in 2022, warning flag for this sector difficulty.

Specifically, NCC reported that the industry received $399.9 million in total investment in 2022, and a 47 percent decrease from the $753 million in 2021, based on statistics from the Central Bank of Nigeria (CBN). Even while the $417.4 million in 2021 increased from that year, by the global COVID-19 pandemic, it was still less than the $942.8 million invested in 2019 before to the pandemic.

As a result, along with the fall in investments, telecom operators have reduced their capital spending, despite the increasing urgency of the need for ongoing infrastructure modifications and expansions.

Kehinde Aluko said, lack of FX is of the industry to a number of problems, the most prominent of which is the shifting FX market, which makes it less appealing to foreign investors. In his opinion, FX accessibility becomes crucial given that the telecoms sector is expected to require an investment of almost $100 billion over the coming ten years.