New Telegraph

MTN, Airtel, Glo spend N24.3bn yearly on diesel

…deploy 44,000 generators to power base stations

NCC rues poor infrastructure

The three major telecommunications operators in Nigeria – MTN, Glo, and Airtel – spend a total of N24.3 billion annually on diesel to power their base stations, a report by the Nigerian Communications Commission (NCC) has established.

This is even as the telecoms regulator identified inadequate power supply as a major impediment to quality and affordable telecommunications services in Nigeria. The NCC, in a research study conducted by the Emerging Technologies Research Unit of its Research and Development Department, declared that the current infrastructure base in Nigeria is grossly inadequate in terms of capacity and quality and is not capable of catering to the anticipated industrial development. This situation is said to be forcing telecommunications operators to incur extra costs in delivering their services to Nigerians.

These costs are in turn passed to the consumers, which leads to high tariffs for telecommunications services. A breakdown of the annual spending on diesel by the three leading operators showed that MTN spends N7.5 billion annually to fuel its generators, while Airtel and Glo spend N8.4 billion each annually. According to the report, the four mobile network operators MTN, Glo, Airtel, and 9mobile jointly power over 22,000 base transceiver stations with about 44,000 generators.

“In addition, the operators also have to provide security for their equipment which has not stopped hooligans from stealing the generators or the diesel as these operators lose about two generators and over one million litres of diesel daily,” the report stated.

The report noted that Nigeria has huge infrastructure deficits, particularly with regards to power generation, internet access, roads, and limited access to qualified human capital. “The finding of this study identified the following infrastructural factors as affecting technological development in Nigeria: Inadequate power supply; the public electricity power supply situation must improve urgently for Nigeria to enjoy the full benefits accruable from both wired and wired telecommunications deployment, Power backup systems for most ICT devices run between 2 to 8 hours of battery life.

“A situation where power outages could stretch to 12 to 48 hours and in some cases more, impacts upon the usage and sustainable deployment of ICT infrastructure and uptake. As the electric power provision is inadequate and insufficient to satisfy the requirements of the telecommunications sector in Nigeria, Operators have resorted to powering their Base Transmission Stations (BTS) with generators that have an automatic trigger whenever there is any form of power outage from the main supply. “As a result, diesel storage tanks are built at the sites and supply the generators periodically.

Since self-generation electricity constitutes the highest cost of production, the GSM operators charge high tariffs to make up for the cost,” the NCC stated in the report. Aside from power, the study also identified multiple taxation as a major challenge confronting the telecoms operators. According to the report, licensed GSM operators are currently struggling with the high demands for levies, taxes and many other charges at all levels and governmental tiers which, most times, leads to regressive and double taxations. The report cited a N3 million fee, which was imposed by the Abuja Capital Development Authority on every base station in the city as an example.

Furthermore, the umbrella body of the telecommunication operators, which is the Association of Licensed Telecommunications Operators of Nigeria (ALTON), was recently in court with the Lagos State Government over the N500,000 fee per base station, which the state imposed on the operators.

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