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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

Oil Prices Climb on Renewed Middle East Concerns and Saudi Supply Signals

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As global markets continue to navigate through geopolitical uncertainties, oil prices rose on Monday on renewed concerns in the Middle East and signals from Saudi Arabia regarding its crude supply.

Brent crude oil, against which Nigeria’s oil is priced, surged by 51 cents to $83.47 a barrel while U.S. West Texas Intermediate crude oil rose by 53 cents to $78.64 a barrel.

The recent escalation in tensions between Israel and Hamas has amplified fears of a widening conflict in the key oil-producing region, prompting investors to closely monitor developments.

Talks for a ceasefire in Gaza have been underway, but prospects for a deal appeared slim as Hamas reiterated its demand for an end to the war in exchange for the release of hostages, a demand rejected by Israeli Prime Minister Benjamin Netanyahu.

The uncertainty surrounding the conflict was further exacerbated on Monday when Israel’s military called on Palestinian civilians to evacuate Rafah as part of a ‘limited scope’ operation, sparking concerns of a potential ground assault.

Analysts warned that such developments risk derailing ceasefire negotiations and reigniting geopolitical tensions in the Middle East.

Adding to the bullish sentiment, Saudi Arabia announced an increase in the official selling prices (OSPs) for its crude sold to Asia, Northwest Europe, and the Mediterranean in June.

This move signaled the kingdom’s anticipation of strong demand during the summer months and contributed to the upward pressure on oil prices.

The uptick in prices comes after both Brent and WTI crude futures posted their steepest weekly losses in three months last week, reflecting concerns over weak U.S. jobs data and the timing of a potential Federal Reserve interest rate cut.

However, with most of the long positions in oil cleared last week, analysts suggest that the risks are skewed towards a rebound in prices in the early part of this week, particularly for WTI prices towards the $80 mark.

Meanwhile, in China, the world’s largest crude importer, services activity remained in expansionary territory for the 16th consecutive month, signaling a sustained economic recovery.

Also, U.S. energy companies reduced the number of oil and natural gas rigs operating for the second consecutive week, indicating a potential tightening of supply in the near term.

As global markets continue to navigate through geopolitical uncertainties and supply dynamics, investors remain vigilant, closely monitoring developments in the Middle East and their impact on oil prices.

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Oil Prices Drop Sharply, Marking Steepest Weekly Decline in Three Months

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Amidst concerns over weak U.S. jobs data and the potential timing of a Federal Reserve interest rate cut, oil prices record its sharpest weekly decline in three months.

Brent crude oil, against which Nigerian oil is priced, settled 71 cents lower to close at $82.96 a barrel.

Similarly, U.S. West Texas Intermediate crude oil fell 84 cents, or 1.06% to end the week at $78.11 a barrel.

The primary driver behind this decline was investor apprehension regarding the impact of sustained borrowing costs on the U.S. economy, the world’s foremost oil consumer. These concerns were amplified after the Federal Reserve opted to maintain interest rates at their current levels this week.

Throughout the week, Brent experienced a decline of over 7%, while WTI dropped by 6.8%.

The slowdown in U.S. job growth, revealed in April’s data, coupled with a cooling annual wage gain, intensified expectations among traders for a potential interest rate cut by the U.S. central bank.

Tim Snyder, an economist at Matador Economics, noted that while the economy is experiencing a slight deceleration, the data presents a pathway for the Fed to enact at least one rate cut this year.

The Fed’s decision to keep rates unchanged this week, despite acknowledging elevated inflation levels, has prompted a reassessment of the anticipated timing for potential rate cuts, according to Giovanni Staunovo, an analyst at UBS.

Higher interest rates typically exert downward pressure on economic activity and can dampen oil demand.

Also, U.S. energy companies reduced the number of oil and natural gas rigs for the second consecutive week, reaching the lowest count since January 2022, as reported by Baker Hughes.

The oil and gas rig count fell by eight to 605, with the number of oil rigs dropping by seven to 499, the most significant weekly decline since November 2023.

Meanwhile, geopolitical tensions surrounding the Israel-Hamas conflict have somewhat eased as discussions for a temporary ceasefire progress with international mediators.

Looking ahead, the next meeting of OPEC+ oil producers is scheduled for June 1, where the group may consider extending voluntary oil output cuts beyond June if global oil demand fails to pick up.

In light of these developments, money managers reduced their net long U.S. crude futures and options positions in the week leading up to April 30, according to the U.S. Commodity Futures Trading Commission (CFTC).

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Crude Oil

Oil Prices Rebound After Three Days of Losses

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After enduring a three-day decline, oil prices recovered on Thursday, offering a glimmer of hope to investors amid a volatile market landscape.

The rebound was fueled by a combination of factors ranging from geopolitical developments to supply concerns.

Brent crude oil, against which Nigeria oil is priced, surged by 79 cents, or 0.95% to $84.23 a barrel while U.S. West Texas Intermediate (WTI) crude climbed 69 cents, or 0.87% to $79.69 per barrel.

This turnaround came on the heels of a significant downturn that had pushed prices to their lowest levels since mid-March.

The recent slump in oil prices was primarily attributed to a confluence of factors, including the U.S. Federal Reserve’s decision to maintain interest rates and concerns surrounding stubborn inflation, which could potentially dampen economic growth and limit oil demand.

Also, unexpected data from the Energy Information Administration (EIA) revealing a substantial increase in U.S. crude inventories added further pressure on oil prices.

“The updated inventory statistics were probably the most salient price driver over the course of yesterday’s trading session,” said Tamas Varga, an analyst at PVM.

Crude inventories surged by 7.3 million barrels to 460.9 million barrels, significantly exceeding analysts’ expectations and casting a shadow over market sentiment.

However, the tide began to turn as ceasefire talks between Israel and Hamas gained traction, offering a glimmer of hope for stability in the volatile Middle East region.

The prospect of a ceasefire agreement, spearheaded by Egypt, injected optimism into the market, offsetting concerns surrounding geopolitical tensions.

“As the impact of the U.S. crude stock build and the Fed signaling higher-for-longer rates is close to being fully baked in, attention will turn towards the outcome of the Gaza talks,” noted Vandana Hari, founder of Vanda Insights.

The potential for a resolution in the Israel-Hamas conflict provided a ray of hope, contributing to the positive momentum in oil markets.

Despite the optimism surrounding ceasefire talks, tensions in the Middle East remain palpable, with Israeli Prime Minister Benjamin Netanyahu reiterating plans for a military offensive in the southern Gaza city of Rafah.

The precarious geopolitical climate continues to underpin volatility in oil markets, reminding investors of the inherent risks associated with the commodity.

In addition to geopolitical developments, speculation regarding U.S. government buying for strategic reserves added further support to oil prices.

With the U.S. expressing intentions to replenish the Strategic Petroleum Reserve (SPR) at prices below $79 a barrel, market participants closely monitored price movements, anticipating potential intervention to stabilize prices.

“The oil market was supported by speculation that if WTI falls below $79, the U.S. will move to build up its strategic reserves,” highlighted Hiroyuki Kikukawa, president of NS Trading, owned by Nissan Securities.

As oil markets navigate a complex web of geopolitical uncertainties and supply dynamics, the recent rebound underscores the resilience of the commodity in the face of adversity.

While challenges persist, the renewed optimism offers a ray of hope for stability and growth in the oil sector, providing investors with a semblance of confidence amidst a volatile landscape.

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