Telecommunications

An Average Device Owner Changes Devices Every 6 to 18 months – NCC Reveals

Published

2 years ago

May 27, 2022

The Nigerian Communications Commission (NCC) has revealed that an average device owner in Nigeria changes devices every 6 to 18 months.

The ‘Deployment of a Device Management System: Project Information Memorandum (PIM) from the National Communications Commission revealed this.

The purpose of PIM is to provide interested parties with information on the Deployment of the Device Management System (DMS) (the Transaction), which was developed by the Nigerian Communications Commission (NCC) with the assistance of the project Transaction Adviser (TA), Weircapacity Consortium, and received approval from the Infrastructure Concession Regulatory Commission (ICRC) of the Federal Republic of Nigeria (FGN).

The commission noted that “Data from Original Equipment Manufacturer (OEM) suggests that approximately 63 million devices are sold each year in Nigeria. Estimates suggest that the average device owner changes devices every six to 18 months.

“The size and turnover of the mobile device market offer vast opportunities for the implementation of a DMS.”

In 2020, the nation’s telecommunication network will have around 132 million unique devices, according to the report obtained by Investors King.

The digital economy accounts for around 15.5 percent of global Gross Domestic Product (GDP), according to the NCC, and has grown two and a half times faster than global GDP during the last 15 years.

It added, “According to NCC industry data, the telecom sector is estimated to contribute between 11 – 14 per cent per quarter to the GDP.

“This figure has been rising in the last few years consistent with increasing competition, decreasing telecom sector tariffs, and increasing teledensity. Innovations in the market such as 5G, Internet-of-Things will only further the rate of penetration of telecom devices in Nigeria which makes the DMS project a welcome development.”

The Nigerian Communications Commission (NCC) is looking at the possibility of putting in place a Device Management System (DMS) to monitor, control, and safeguard the country’s telecoms sector.

DMS is a sort of central remote management software that is used in Nigeria to monitor, manage, and secure mobile devices that are deployed across many mobile service providers and operating systems.

The DMS system will offer a single window for telecom devices, allowing the NCC to detect illegal or substandard devices that are not allowed on the Nigerian telecommunications network ahead of time. The NCC plans to implement this DMS system under a Public-Private Partnership (PPP) framework.

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Telecommunications

Telecom Firms Face N56 Billion Monthly Diesel Bill Amid Power Woes

Published

2 weeks ago

September 25, 2024

Samed Olukoya

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has said telecommunication companies spend 35 percent of their operating expenses on diesel due to the unreliable electricity supply in Nigeria.

According to industry estimates, telecom operators use an average of 40 million liters of diesel per month to power their sites. The price of diesel jumped to N1,406.05 per liter in August 2024, representing a 64.58 percent increase from N854.32 per liter in August 2023, according to the National Bureau of Statistics (NBS).

This implies that the cost of powering Nigeria’s communication infrastructure surged from N34.17 billion in August 2023 to N56.24 billion in August 2024.

Gbenga Adebayo, President of ALTON, confirmed the current diesel consumption, stating, “It will be over that now.” According to Harmanpreet Dhillon, Airtel Nigeria’s chief technical officer, the telco spent N28 billion on diesel in May 2024.

During a media roundtable, Dhillon said that the company was exploring hybrid solutions—lithium batteries and solar—to lower its energy bill.

McKinsey recently noted that companies could save up to 30 percent on energy costs by adopting renewable energy solutions and other technologies.

“The biggest constraint in the telecom industry is high energy cost. If the government had continued to fulfill its part of the bargain it made in the early 2,000s to provide 18 hours of electricity, the heavy logistics and the capital we spend today from powering sites would not be there,” said Adebayo of ALTON.

Telecommunications

MTN Nigeria Revises IHS Lease Terms, Aims for N100 Billion Yearly Savings

Published

2 months ago

August 20, 2024

Samed Olukoya

MTN Nigeria, one of the country’s leading telecommunications giants, has successfully renegotiated its tower lease agreements with IHS Towers, a strategic move expected to save the company approximately N100 billion annually.

This renegotiation is a significant step in MTN Nigeria’s ongoing efforts to improve its financial performance amid Nigeria’s challenging business environment.

The revised terms of the lease agreements introduce several critical changes aimed at reducing operational costs and mitigating the impact of Nigeria’s volatile currency fluctuations.

The new agreements reduce the US dollar-indexed component of the leases, which has now been linked to a discounted U.S. consumer price index (CPI).

This change is crucial in lowering MTN Nigeria’s exposure to the fluctuating naira, providing the company with a more predictable and stable cost structure.

Also, the renegotiation removes technology-based pricing, simplifying the company’s cost framework. Payments for tower upgrades will now be based on tower space and power consumption, rather than the technology deployed on the towers.

This shift is expected to bring more clarity and control over MTN Nigeria’s infrastructure expenditure.

Another key aspect of the renegotiation is the introduction of an energy cost component indexed to the cost of diesel power.

Given Nigeria’s unreliable power supply, telecom companies like MTN Nigeria rely heavily on diesel generators to power their infrastructure.

By linking energy costs to diesel prices, MTN Nigeria can better manage these expenses, which have historically been a significant burden on its operations.

The renegotiated terms also include provisions for discounts and incentives over the life of the contracts, further enhancing the financial benefits for MTN Nigeria.

These changes are expected to boost the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, positioning it for stronger financial performance in the coming years.

MTN Nigeria’s strategic renegotiation comes at a time when the telecommunications industry is grappling with increasing operational costs and economic instability.

The savings generated from these new lease terms will not only improve the company’s bottom line but also allow it to reinvest in critical infrastructure and expand its services across the country.

As MTN Nigeria continues to navigate the complexities of the Nigerian market, the successful renegotiation of its tower lease agreements with IHS Towers underscores its commitment to maintaining financial stability and delivering value to its shareholders.

The telecom giant’s proactive approach to cost management and risk mitigation sets a positive precedent for other companies in the industry facing similar challenges.

Telecommunications

Airtel Africa Launches $50 Million Share Buy-Back Programme

Published

2 months ago

August 19, 2024

Samed Olukoya

Airtel Financial Results - Investors King

Airtel Africa, a major player in telecommunications and mobile money services across 14 African nations, has announced the initiation of the second tranche of its $100 million share buy-back programme.

This latest phase is a significant step following the completion of the programme’s first tranche earlier this year.

The buy-back programme, which commenced today, aims to enhance shareholder value by reducing the company’s capital through the repurchase and cancellation of its own shares.

The second tranche is expected to conclude by December 19, 2024. Airtel Africa has engaged Citigroup Global Markets Limited (Citi) to facilitate this phase of the buy-back.

Under this agreement, Citi will conduct on-market purchases of Airtel Africa’s ordinary shares, with the company subsequently acquiring these shares from Citi.

Citi will operate as a riskless principal and will make purchase decisions independently of Airtel Africa.

“The purpose of this buy-back programme is to reduce the capital base of the Company, thereby benefiting our shareholders through increased value per share,” stated a spokesperson from Airtel Africa. “All shares repurchased under this programme will be cancelled.”

The share buy-back transactions will be conducted within the framework of pre-set parameters outlined in the agreement between Airtel Africa and Citi.

These transactions will adhere to the guidelines established by the Company’s general authority to repurchase shares, as granted by its shareholders during the annual general meeting held on July 3, 2024.

At that meeting, shareholders approved the purchase of up to 374,141,187 ordinary shares.

In compliance with regulatory standards, the buy-back will be conducted according to Chapter 9.6 of the Financial Conduct Authority’s UK Listing Rules and the Market Abuse Regulation (EU) No 596/2014, as incorporated into UK domestic law.

Market Impact and Outlook

This strategic move comes as Airtel Africa seeks to optimize its capital structure and deliver value to its investors.

The share buy-back programme is anticipated to reduce the number of outstanding shares, potentially increasing the value of each remaining share and reflecting positively on the company’s stock performance.

The commencement of the second tranche follows the successful execution of the first tranche, demonstrating Airtel Africa’s commitment to shareholder returns and capital management.

The company’s decision to continue with the buy-back programme highlights its confidence in the long-term growth prospects and stability of its operations across the African continent.