In Nigeria, about $80 million is spent monthly to maintain telecommunication towers, a new report by the Nigeria CommunicationsWeek has revealed. These towers house the Global System for Mobile communications (GSM), Code Division Multiple Access (CDMA) and 4G internet service which provider deliver telecom services to customers.
Investigations carried out by Nigeria CommunicationsWeek revealed that “with adoption of co-location model by telecom operators and sale of towers to tower operators by GSM operators among others, 95 percent of the towers in the country are under the management of tower operators.”
This high cost of management is due to about 60 percent allocation of resources to the provision of power; to purchase diesel and ensure that the generators are in good working condition.
“In Nigeria, tower operators are faced with problems of approval cost, multiple regulations, multiple taxations and maintenance cost. Power is a challenge as cost of diesel is high; today you buy N140 per litre tomorrow you buy it for N150. These costs are not insignificant and affect the business,” Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON) said in a statement.
Growth in Towers Sale
Major GSM operators such as Etisalat, MTN and Airtel have sold mobile towers to operators in order to explore better cost effective options for proper maintenance. They will therefore require to pay monthly rents to ensure that they remain on the base stations reaching customers spread across Nigeria.
In March 2014, MTN said the towers were expensive to maintain, listing inaccessible roads to rural areas, high security costs and an epileptic power supply as the main reasons for their sale. IHS also received $200 million from the World Bank last week for the acquisition of about 2,100 tower sites from Nigeria’s fourth largest mobile operator, Etisalat Nigeria.
With the rise in tower sales, operators are faced with the difficult task of building a strategy that will ensure a hold onto tower assets as well as manage costs.
