Nigerian telecom operators are intensifying discussions to explore innovative solutions, including renewable energy sources and satellite technology, to mitigate the escalating operational costs that have plagued the sector.

Telecom industry insiders, who spoke during the weekend at the Nairametrics Industry Spotlight webinar, themed “Beyond Connectivity: Telcos and the Future of Financial Inclusion in Nigeria” made this disclosure.

The Senior Manager of Growth and New Business Tech Platforms at MTN, Chukwuebuka Ezewuzie, said aside from foreign exchange crises, money spent on diesel-powered infrastructure gulped a large chunk of telcos’ operating costs.

“A lot of advancement is going on at the moment in adopting renewable energy because the infrastructure running on diesel and petrol is massively expensive. So, how are we going to use the free energy from the sun and the wind to power this equipment to reduce cost? This is one of the key areas that the telcos are currently exploring,” he asserted.

Telecom infrastructure, such as base stations, data centres, relay stations, and transmission equipment, rely on diesel generators for power, leading to substantial operational costs.

In 2023, telecommunications companies spent about N429.43bn on fuelling those base stations, a 34.57 per cent increase from the N319.11bn spent in 2022, according to analysis from the National Bureau of Statistics.

Currently, the average price of diesel in Nigeria stands at N1,379 per litre, with significant variations across states.

Telecom operators have estimated their diesel consumption to be about 40 million litres per month to power their sites.

According to a McKinsey report, telcos could save between 15 per cent and 30 per cent on energy costs annually by switching to solar power, depending on their current energy management practices and the extent of solar integration.

Ezewuzie revealed that telcos were also evaluating satellite technology as a viable alternative to expensive fibre optic deployments.

He said given the high costs associated with laying fibre, satellite coverage could provide a cost-effective solution for expanding network reach.

Ezewuzie disclosed that MTN, Nigeria’s biggest with almost 80m subscribers, had initiated conversations with Elon Musk’s Starlink to assess how the technology could be integrated into its existing networks.

The former Chief Financial Officer of 9mobile, Nkem Oni-Egboma, underscored the importance of innovative approaches in reducing energy consumption in the sector.

“Reducing energy consumption is crucial for the sustainability of telecom operations,” Oni-Egboma stated. “Data centers and media gateways are optimising their operations to reduce costs, which in turn, makes their products and services more affordable for consumers.”

The Chief Executive Officer of Open Access Data Centre, Dr Ayotunde Coker, said the sector was dealing with high input costs due to inflation, an inability to adjust prices, and the knock-on effect of the cost of living crisis.

According to Coker, to navigate those challenges, telcos should focus on creativity in value-added services, targeted offerings for specific segments, recognising affordability disparities, and graduated products and services.

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TECH DIGEST – The Director General of the National Information Technology Agency (NITDA), Nigeria’s technology regulatory agency, Kashifu Inuwa Abdullahi, has commended the massive infrastructural investment taking place at Rack Centre, West Africa’s leading carrier neutral data centre saying it aligns with the Agency’s objective of increasing capacity and enabling local hosting in Nigeria based data centres.

Abdullahi, who visited Rack Centre as part of his working visit to technology-based private and public establishments in Lagos, Nigeria, said the Agency’s desire is that both government agencies and the private sector host locally to reduce cost.

In his words,” we are stimulating digital demand within the public sector; our regulatory activities are to help open the ecosystem. We are constantly consulting with the stakeholders to build capacity and challenge locally based technology companies, including startups, to compete internationally. To this end, Rack Centre has made Nigeria proud with the range of high profile and prestigious global awards it has received since its inception, a demonstration of our world-class capability.”

Rack Centre recently announced an expansion program that will increase capacity by 13 MW of IT power, in addition to the current expansion to 1.5MW of IT power due to launch in June 2021.

The expansion program will bring unprecedented carrier neutral data centre capacity scale to West Africa, creating Nigeria as a hub for digital infrastructure and carrier neutral interconnect in the region. Every country on the Atlantic coast of Africa is directly connected to this Tier III certified data centre in Nigeria.

The Managing Director of Rack Centre, Dr Ayotunde Coker, delighted at Abdullahi’s visit, said the investment outlay “is to build state of the art digital infrastructure, the leader in West Africa capable of hosting both local and international players. We have achieved 100% uptime and the most competitive levels of data centre efficiency in a challenging climatic environment.

“With local infrastructure, NITDA can confidently encourage and enforce the sovereign data rules for hosting data locally and work with government stakeholders to create the policies that encourage competitive cost of capital and policies to drive the growth of digital infrastructure in the country, making Nigeria the delivery point of digital infrastructure in the emerging Africa free trade environment.”

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