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Telecoms Subscribers to Get Poorer Services as Vandalism Rises

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  • Telecoms Subscribers to Get Poorer Services as Vandalism Rises

Frustrations being experienced by telecoms subscribers on account of poor services will increase even further, if the activities of vandals, which seem to be on the upward swing in Nigeria’s telecommunications sector are not checked.

This is even as operators continue to witness increasing fibre cuts and theft of infrastructure, especially their generating sets and diesel, which they use to power their base stations.

The increasing act of vandalism is impacting negatively on the quality of telecommunications services across the country, with the resultant effect being high rate of drop calls, higher calls terminations, undelivered text messages, poorer networks connectivity and a host of others.

The Guardian reliably gathered on Tuesday that fibre cut menace increased by 60 per cent in 2016. Besides, about 10,000 generating sets were said to have been lost to miscreants in the year. In 2015, report had it that the industry recorded about 1,200 fibre cuts.

While the industry still grapples with shortage of Base Transceiver Stations (BTS), which is currently put at 29,000 and spread across the country, The Guardian gathered through the Association of Licensed Telecommunications Operators of Nigeria (ALTON), the industry’s network of over 25,000 BTS spread across the country is powered with about 50,000 generating sets.ALTON is the industry body for all telecommunications companies and service providers.

The Guardian gathered that a direct operator, like MTN, Globacom and others, use a 15-20KVA generating set, while those on co-location run a 27KVA set, which are changed sometimes every two years depending on wear and tear forces.

The Nigerian Communications Commission (NCC), the industry regulator, had at a forum in December 2014, disclosed that the sector was home to 29,000 BTS, and noted that it was abysmally low to carry the traffic on the various networks.

For effect, NCC declared that the country needed about 80,000 BTS to meet growing telecommunications service demands across the country.Further investigations showed that telecoms operators, who do not rely on Power Holding Company of Nigeria (PHCN) for electric power to run their BTS, fully relied on their generating sets. Each has two generating sets, with one as standby.

As such, based on the arrangement, telecoms operators usually have challenges of poor service quality as a result of the activities of the miscreants, which lead to service disruptions and downtime on various networks.A source in MTN Nigeria, told The Guardian that the firm had since the beginning of the year being coping with two fibre cuts on a daily basis across the country.

MTN, which has about 65 million subscribers, said that Boko Haram, the extremist Islamic sect, had destroyed 120 of its sites between 2013 and 2014. The company had at a recent function declared that at least 80 sites were destroyed during the last quarter of 2014.

During a working visit of the Minister of Communication, Adebayo Shittu, to MTN Head Office, in Lagos, a former Corporate Services Executive, MTN Nigeria, Amina Oyagbola, had solicited government’s support to address the monster of infrastructure vandalism to further improve service delivery to end users.

A telecommunications expert, Kehinde Aluko, said the increasing menace of vandalism has become a dent on the success of the sector.He stressed that this development has also limited many telecommunications operators from completely implementing outlined network expansion initiatives in the country, amid rising cost of doing business in an industry that is heavily dependent on foreign exchange and capital.

At forum earlier in the year, the Chief Executive Officer, Airtel Nigeria, Segun Ogunsanya, claimed that Nigerian operators spend between $3 billion and $4 billion as capital expenditure yearly on network expansion initiatives.

He explained that if vandalism of telecoms equipment and installations continued unabated, Nigerian subscribers could experience higher frequency of dropped calls, incoherent transmission and undelivered text messages.

“Two per cent to three per cent of Nigeria’s telecoms sites are affected by random shutdown and destruction at any given point in time,”added. Experts are of the view that the current situation has been exacerbated by the failure of the National Assembly to pass the Critical National Infrastructure Bill.

The bill, if passed into law, will criminalise any act of vandalism of telecoms equipment, since they will be classified as critical national infrastructure.

According to Chairman of ALTON, Gbenga Adebayo, stressed that inadequate power supply and insecurity; vandalism; multiple taxation and regulation among others have impacted seriously on the fortunes of the industry.

Adebayo said telecoms infrastructure should be seen as critical equipment just like the oil pipelines, as well as PHCN and NITEL (Nigerian Telecommunications Limited) facilities.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

IOCs Stick to Dollar Dominance in Crude Oil Transactions with Modular Refineries

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Crude Oil - Investors King

International Oil Companies (IOCs) are standing firm on their stance regarding the currency denomination for crude oil transactions with modular refineries.

Despite earlier indications suggesting a potential shift towards naira payments, IOCs have asserted their preference for dollar dominance in these transactions.

The decision, communicated during a meeting involving indigenous modular refineries and crude oil producers, shows the complex dynamics shaping Nigeria’s energy landscape.

While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had previously hinted at the possibility of allowing indigenous refineries to purchase crude oil in either naira or dollars, IOCs have maintained a firm stance favoring the latter.

Under this framework, modular refineries would be required to pay 80% of the crude oil purchase amount in US dollars, with the remaining 20% to be settled in naira.

This arrangement, although subject to ongoing discussions, signals a significant departure from initial expectations of a more balanced currency allocation.

Representatives from the Crude Oil Refinery Owners Association of Nigeria (CORAN) said the decision was not unilaterally imposed but rather reached through deliberations with relevant stakeholders, including the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

While there were initial hopes of broader flexibility in currency options, the dominant position of IOCs has steered discussions towards a more dollar-centric model.

Despite reservations expressed by some participants, including modular refinery operators, the consensus appears to lean towards accommodating the preferences of major crude oil suppliers.

The development underscores the intricate negotiations and power dynamics shaping Nigeria’s energy sector, with implications for both domestic and international stakeholders.

As discussions continue, attention remains focused on how this decision will impact the operations and financial viability of modular refineries in Nigeria’s evolving oil landscape.

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Energy

Nigeria’s Dangote Refinery Overtakes European Giants in Capacity, Bloomberg Reports

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Aliko Dangote - Investors King

The Dangote Refinery has surpassed some of Europe’s largest refineries in terms of capacity, according to a recent report by Bloomberg.

The $20 billion Dangote refinery, located in Lagos, boasts a refining capacity of 650,000 barrels of petroleum products per day, positioning it as a formidable player in the global refining industry.

Bloomberg’s data highlighted that the Dangote refinery’s capacity exceeds that of Shell’s Pernis refinery in the Netherlands by over 246,000 barrels per day. Making Dangote’s facility a significant contender in the refining industry.

The report also underscored the scale of Dangote’s refinery compared to other prominent European refineries.

For instance, the TotalEnergies Antwerp refining facility in Belgium can refine 338,000 barrels per day, while the GOI Energy ISAB refinery in Italy was built with a refining capacity of 360,000 barrels per day.

Describing the Dangote refinery as a ‘game changer,’ Bloomberg emphasized its strategic advantage of leveraging cheaper U.S. oil imports for a substantial portion of its feedstock.

Analysts anticipate that the refinery’s operations will have a transformative impact on Nigeria’s fuel market and the broader region.

The refinery has already commenced shipping products in recent weeks while preparing to ramp up petrol output.

Analysts predict that Dangote’s refinery will influence Atlantic Basin gasoline markets and significantly alter the dynamics of the petroleum trade in West Africa.

Reuters recently reported that the Dangote refinery has the potential to disrupt the decades-long petrol trade from Europe to Africa, worth an estimated $17 billion annually.

With a configured capacity to produce up to 53 million liters of petrol per day, the refinery is poised to meet a significant portion of Nigeria’s fuel demand and reduce the country’s dependence on imported petroleum products.

Aliko Dangote, Africa’s richest man and the visionary behind the refinery, has demonstrated his commitment to revolutionizing Nigeria’s energy landscape. As the Dangote refinery continues to scale up its operations, it is poised to not only bolster Nigeria’s energy security but also emerge as a key player in the global refining industry.

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Crude Oil

Brent Crude Hits $88.42, WTI Climbs to $83.36 on Dollar Index Dip

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Brent crude oil - Investors King

Oil prices surged as Brent crude oil appreciated to $88.42 a barrel while U.S. West Texas Intermediate (WTI) crude climbed to $83.36 a barrel.

The uptick in prices comes as the U.S. dollar index dipped to its lowest level in over a week, prompting investors to shift their focus from geopolitical tensions to global economic conditions.

The weakening of the U.S. dollar, a key factor influencing oil prices, provided a boost to dollar-denominated commodities like oil. As the dollar index fell, demand for oil from investors holding other currencies increased, leading to the rise in prices.

Investors also found support in euro zone data indicating a robust expansion in business activity, with April witnessing the fastest pace of growth in nearly a year.

Andrew Lipow, president of Lipow Oil Associates, noted that the market had been under pressure due to sluggish growth in the euro zone, making any signs of improvement supportive for oil prices.

Market participants are increasingly looking beyond geopolitical tensions and focusing on economic indicators and supply-and-demand dynamics.

Despite initial concerns regarding tensions between Israel and Iran and uncertainties surrounding China’s economic performance, the market sentiment remained optimistic, buoyed by expectations of steady oil demand.

Analysts anticipate the release of key economic data later in the week, including U.S. first-quarter gross domestic product (GDP) figures and March’s personal consumption expenditures, which serve as the Federal Reserve’s preferred inflation gauge.

These data points are expected to provide further insights into the health of the economy and potentially impact oil prices.

Also, anticipation builds around the release of U.S. crude oil inventory data by the Energy Information Administration, scheduled for Wednesday.

Preliminary reports suggest an increase in crude oil inventories alongside a decrease in refined product stockpiles, reflecting ongoing dynamics in the oil market.

As oil prices continue their upward trajectory, investors remain vigilant, monitoring economic indicators and geopolitical developments for further cues on the future direction of the market.

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