Telecommunications companies in the country may have lost over N10bn in revenue in the last two weeks due to fuel shortage and this may affect planned recruitment of casual and permanent workers by some of them this year, it has been learnt.
Following Nigeria’s exit from recession, the major telecoms companies are planning new recruitments this year in order to boost their workforce and enhance revenue growth, especially with the consistent low profits garnered per user in the previous years.
With companies like WhatsApp, Skype and Facebook offering the same services as the telcos, the revenue by the firms, which also provide data for the applications to work, has reduce drastically.
A top management employee of one of the telcos said on Friday, “But having lost over N10bn in the last two weeks and with no signs that the fuel scarcity will end soon, there are strong feelers that the telecoms companies that have planned to recruit new workers from January 2018 may have to put a hold on such plans.
“Another option left to them will be to curtail the number of workers they plan to recruit.”
The source said that the lack of adequate power supply in most parts of the country meant that the telcos mostly ran on generators “and are now spending twice or thrice more to buy petrol and diesel that have now become gold in the country.”
“This continues to be debilitating to offering quality services; power provided by both the national electricity grid and generators are also problematic,” the source added.
Parallel Wireless, a telecoms company in Africa, says a solution to the current challenges being faced by telecoms companies in the country will be for the government to help them provide value to the rural market.
According to the company, investments in Nigeria’s rural areas will mean affordable workforce and employment opportunities to the millions of unemployed people in the rural areas.
The company stated in a response to an enquiry by our correspondent, “The service providers require innovative technology solutions to address the unique problems faced by them in addressing the rural market. One of the most critical issues faced by them is that of high incidence of power outages, which adds to the increased cost of conducting business as the telcos are forced to use generators to keep the networks up and running.
“Secondly, extremely low average revenue per user means that the telcos find it hard to justify the massive investment to expand and modernise the networks.
“These factors limit the expansion of mobile networks in the rural areas and ensure that the population is unable to gain from the benefits of broadband.”
To solve these problems, Parallel Wireless proposes bringing down the cost of deploying the networks.
It said, “The telcos need to bring down the cost of deploying the network to bridge the digital gap and to address the vast potential of the rural market.
“Doing that will include exploring the benefits of 2G technology, still the mainstay of the African market.
“Parallel Wireless’s combines the benefits of 2G technology with the concept of virtualisation to offer easy-to-install, easily upgradeable solution, uniquely suited to the requirements of the rural market. It consumes as much as three-times reduced power and covers a much larger area when compared with a traditional network.”
An industry player, Oreoluwa Runsewe, said that by leveraging 2G technologies, “two problems are solved: the rural market is maximised, while less power is consumed in producing these services.”
He noted that by creating an ecosystem built mainly around Africa’s rural market, the biggest user of telco services would help raise revenue.
“Deployment of a rural mobile ecosystem can make a significant contribution to Africa’s economy and growth. It is imperative that telcos adopt the technologies, which make it easier for them to address the rural market, which in turn will allow the population in the hinterland to benefit from connectivity,” Runsewe added.
The Executive Secretary, Association of Licensed Telecommunications Operators of Nigeria, Gbolahan Awonuga, said the Global System for Mobile communications companies, Long-Term Evolution operators and Internet Service Providers remained the biggest consumers of diesel in the country.
He explained that as of 2014, the firms were spending an estimated N175m daily or N45bn monthly on diesel for powering their Base Transceiver Stations nationwide, amounting to N540bn at the end of the year.
Awonuga said, “This figure is bound to have risen by about 35 per cent in the year ended December 31, 2015, and doubled in 2016, going by the expansion of base stations across the country and the fluctuation in the price of diesel, as well as the worsening power situation in the country.
“Operators in the sector have always relied on generators in an industry that does not tolerate recurrent downtimes, and the decision by the telecoms operators to outsource most of the sites to tower operators has not significantly reduced the cost of managing the sites.
“This is because the cost of managing the sites was passed to the service providers who in turn pass it down to telecoms consumers.”
However, the Chief Executive Officer, Airtel Nigeria, Mr. Segun Ogunsanya, said the power cost of a site connected to the grid was only about one sixth of that of a fuel-powered site, “but only about 10 to 15 per cent of the BTS are connected to the electric power grid.”
“Primarily, because of fuel costs, the average network cost in Nigeria is twice or thrice higher than the cost in a number of other African markets. The implications of such absence of reliable power infrastructure are far-reaching,” he stated.