The Nigerian Communications Commission (NCC) has urged mobile network operators (MNOs), internet service providers (ISPs), towercos, and others to convert to alternate power sources in the interim as telecom companies struggle with increased energy expenses, particularly diesel.
The Executive Vice Chairman of the NCC, Prof. Umar Danbatta, noted that the Federal Government is using all available resources to address the country’s energy crisis and stated that renewable energy, including solar, has been recommended for deployment by MNOs, ISPs, and others while waiting for the price of diesel to decline.
According to research, the country’s high energy prices have been a problem for towercos and other telecom service providers for roughly three months. With this increase, The Guardian learned that certain towercos are restricting diesel at their locations to maintain services. This rationing seems to have led to the decline in voice and data service quality in some specific areas.
The National Bureau of Statistics (NBS) statistics revealed that the average price per litre consumers paid for automotive gas oil (diesel) rose the highest during the second quarter, with the average retail price of diesel increasing from N539.3 in March to N671.1 in May, confirming the energy crises.
The three states with the largest price increases were Ekiti, Osun, and Oyo, at N716.15, N716 and N703.33 respectively. Yobe, Bauchi, and Delta have the lowest average retail price (N560), respectively (N624.44).
According to zone study, the South West had the highest average diesel price (N730.60), while the North East had the lowest average price (N639). The cost of diesel per litre varies between N700 and N815 at several gas stations in Lagos.
Danbatta, however, stated in a post-event interview in Lagos yesterday that MNOs and ISPs have been advised to hunt for alternate energy sources for the time being in order to keep their services running. They must develop fresh business cases. The same business case cannot be used to predict a different outcome. In order to prevent the sector’s growth from stagnating, we must be creative, team-oriented, engage one another, and figure out how to overcome the obstacles we face. I support alternative energy sources in order to maintain the sector’s vitality and its ability to offer Nigerians services at reasonable prices.
The NCC EVC emphasized that housing, manufacturing, transportation, and aviation are all affected by the rising cost of energy, adding that “we must find alternatives to stay afloat as an industry.”
Regarding the anticipated increase in telecom service costs, the NCC EVC emphasized that just raising rates in the industry would equate to doing things anecdotally. At NCC, we frequently follow scientific procedures. We employ the services of consultants who are specialists in cost-based studies to examine every sectoral section and make recommendations regarding whether it is necessary to raise the cost of services in that specific segment. We typically secure stakeholder contributions even before we make any decisions. Consumers must have a say in the topic, so you must convene a stakeholder meeting before you impose new tariffs on residents.
The minister “guaranteed that the ministry is engaging with the Central Bank of Nigeria to ensure FOREX is available to operators in the sector to ensure services remain afloat,” he said, adding that stakeholders met with Minister Pantami last week.
Gbenga Adebayo, the chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), told The Guardian over the phone that service outages are a common problem that aren’t always related to the price of diesel or fuel rationing.
According to Adebayo, certain factors can cause service outages depending on whatever area of the network the user is currently accessing. He emphasized that these factors include vandalism, fiber cuts, and government-sanctioned site closures that have an adverse effect on other sites. “It is not appropriate to attribute downtime on expensive diesel or a lack of supply. Towercos is primarily responsible for the issue of the high cost of diesel, and did you know that they offer these services to the operators, many of whom have long-term contracts with them?
The towercos are the ones most affected by this high cost, therefore the concern right now is how they will survive. Therefore, if they must provide services to the business, their worries are likewise those of the industry. The majority of them committed to long-term Service Level Agreements with the telecoms, which are also subject to penalties for breach if they are not ready for some of the current experiences in town.
So, rather than placing the blame for the current issue on the high cost of diesel, I am raising worries about the towercos, who are devoted to promoting the sector without taking the current problems into account. The fact that the issue impacts the entire nation and that the telecoms industry is not immune to the economy is cause for concern.
He asserts that despite the difficulties, services will continue to be provided and delivered in a non-discriminatory manner at all times and in all locations at the same rate as previously.
The head of ALTON, however, urged the Federal Government to address the issues the economy is now facing as soon as possible so that the nation can continue to advance.