[ad_1]
Following Mafab and MTN’s launch of 5G, SAMI OLATUNJI writes about the affordability issue around 5G deployment and mass adoption in the country
MTN Nigeria pioneered 5G mobile services in the country and it was soon followed by Mafab which in January launched the new technology that many believe would revolutionise the cyber world globally. And Airtel Airtel has obtained the 5G licence and may launch the service any time soon.
Users have the choice of going for phone, router bundles or SIM-only 5G offerings. The offers differ significantly between and within regions. Worldwide adoption of the potential fifth-generation technology is still going strong, but it is very low in the country.
To accelerate the adoption of the technology, a national 5G policy was introduced in Nigeria to direct network deployment. During the launch of the policy, the President, Major-General Muhammadu Buhari (retd), said, “The national policy includes a deployment plan to ensure that major cities across the country benefit from 5G technologies. It also seeks to make 5G a major driver of our economy, a catalyst for smart cities in the country and a platform for the creation of jobs that support our digital economy.”
The importance of the 5G network has been stressed by the Minister of Communications and Digital Economy, Prof. Isa Pantami, who said that 5G has the potential to greatly improve users’ experiences with mobile networks and real-time communications.
Commenting on the policy, he stated, “The policy is designed to achieve the following, amongst others: to ensure effective deployment of 5G to cover major urban areas by 2025; to ensure the security of the 5G ecosystem and the protection of data.”
While the opportunities that come with 5G are enormous and the projection of the government is enviable, the cost required to deploy the technology across the country may pose a challenge and slow down its adoption rate.
The question now is, what is the cost of this 5G technology? How much money will we need to spend to join the 1 billion 5G users?
Expensive for operators
The Nigerian Communications Commission admitted that certain challenges may hamper the effective deployment of the 5G network in Nigeria. Some of the obstacles are a lack of 5G-enabled devices, high deployment costs, a shortage of frequencies with sufficient spectral efficiency, and a lack of trained personnel with the necessary knowledge of the technology.
When it came to the reserve price bid for the 5G network spectrum auction in 2021, Nigeria’s $194.7m (N75bn) was among the highest in the world, when compared to countries like India and South Africa. Egypt’s regulator provided 60MHz of 2600MHz spectrum at a reserve price of $150m per 10MHz, while the figure for India was INR4.92bn ($66.2m) and South Africa between $588,000 and $4.5m.
The Chairman of the Association of Licensed Telecom Operators of Nigeria, Gbenga Adebayo, expressed concern about the exorbitant price of the 3.5GHz spectrum during a stakeholders’ forum in Lagos in November 2021.
The best thing the government could have done, in Adebayo’s opinion, is to make spectrum licenses as low as possible so that the country could take full advantage of the benefits of 5G technology when it is deployed.
The President of the Association of Telecommunications Companies of Nigeria, Ikechukwu Nnamani, noted that Nigeria should not be left behind as far as emerging technologies are concerned, but “reduced spectrum cost would help operators to deliver 5G service to subscribers at an affordable rate”.
He acknowledged that 5G deployment was far more capital-intensive than 4G and other lower technologies, adding that the Nigerian Senate had during a recent public hearing on the technology, expressed concern that the operators might pass the cost to subscribers.
“There is no doubt that the operators are going to spend a lot of money to deploy 5G and they will need to recoup their investments from the service. The only way the cost can be lowered for the subscriber is for the telecoms regulator to make the 5G spectrum’s cost as low as possible, he said.
In December 2021, MTN Nigeria and Mafab Nigeria Communications Limited emerged winners of a 5G auction after about eight hours and 11 rounds of bidding.
Bidding began at $199.37m, as against the reserve price of $197.4m set by the Nigerian Communications Commission. The auction ended at $273.6m for each available lot, with MTN paying an extra sum of $15.9m to be assigned the preferred lot of Lot One, while Mafab was assigned Lot Two at no extra cost.
In October last year, the NCC set the reserve price for its new 5G spectrums at $273.60m, with a plan to issue two more 5G licences.
The Head of the Spectrum Administration Department at NCC, Abraham Oshadami, announced the reserve bid price for the band as contained in the draft IM, which NCC pegged at $273.6m, well above the $194.7m auction reserve price for the same spectrum band that was auctioned in 2021, eliciting reactions from operators who objected to the increase.
Concerned about the increase in the reserve representative price from $194.7m in 2021 to $273.6m in 2022, a representative from Huawei Technologies urged NCC to reduce the reserve representative price to allow more operators to participate in the bidding process.
Airtel, which participated in the bid last year but withdrew in the eleventh round, when the bidding process was at its height, requested that the NCC consider its participation in the bidding process and grant it the administrative privilege to purchase one of the lots at the reserve bid price, without competing with other operators.
The Executive Commissioner of Technical Services at NCC, Mr Ubale Maska, in response to the request, said the increase in the reserve bid price was reasonable because the spectrum license had increased in value since it was auctioned off the year before. The most recent auction, in his opinion, established the fair market value of the property up for sale.
He added that Airtel should participate again in the upcoming auction in order to be fair to all operators. However, in January of this year, Airtel Network Limited was the sole bidder for its 3.5GHz spectrum band for 5G deployment.
According to Prof. Pantami, Airtel, Mafab and MTN Nigeria spent about $820.8m to acquire the 5G spectrums. He also disclosed that 5G services were available in at least 225 sites across eight states in Nigeria.
Unaffordable for customers
The affordability of 5G devices may also hinder service adoption in Nigeria, even though there has been a significant increase in the number of 5G devices available globally since 2020.
According to ‘Ericsson Mobility Report, more than 615 million units of 5G devices were shipped in 2021, more than double the number shipped in 2020. The report added that over 650 5G smartphone models have now been launched, accounting for 50 per cent of all 5G devices by form factor.
However, their costs have come very high for most Nigerians with low purchasing power in a highly inflationary economy.
According to an analysis by QuartzAfrica, the low purchasing power of 5G-enabled smartphone users and the high cost of data were some of the recognised issues that would threaten the smooth launch of 5G operations in Nigeria and Africa in general.
It was also reported that the cheapest 5G-enabled smartphone in the continent was sold for about $300 (about N210,000) which is very expensive for the average Nigerian.
To bring an end to address the challenge of affordability, MTN announced it will be partnering with Intelligra, a smartphone financing platform in Nigeria, some Original Equipment Manufacturers, Stanbic IBTC Bank, and a popular gadget retail store, Slot, to enable Nigerians to own 5G-enabled smartphones and pay over a long period without any initial deposit.
MTN intends to partner with OEMs such as Samsung, TECNO, Nokia, Infinix, and iTel, among others to help the widespread of 5G technology in Nigeria by reducing the cost of mobile phones.
The telecom giant has rolled out the 5G technology in selected locations in Nigeria, including Abuja, Lagos, Enugu, and Port Harcourt. The price for the MTN 5G router is N50,000, which is higher than the minimum wage in the country.
A report by Alliance for Affordable Internet in 2022 revealed that only about 44 per cent of Nigerians had access to smartphones.
In its 2022 Mobile Economy report for sub-Saharan Africa, GSMA said, “The availability of 5G devices – and at affordable prices – will be crucial to 5G adoption in Sub-Saharan Africa. This is especially true given that the sluggish uptake of 4G across the region is, in large part, attributable to the high cost of devices relative to average income levels.”
The way forward
The President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, recently affirmed that Nigeria was ready for 5G adoption despite the issues bedevilling the industry.
The Chief Operating Officer, Association of Telecommunications Companies of Nigeria, Ajibola Olude, said, “We are ready for 5G. From all indications, we are ready for 5G. Regarding device shortages, MTN for instance has a device financing scheme for 5G.
“The adoption of 5G would be very quick here given its attendant benefits. 5G is coming with a lot of possibilities and the rate of adoption of 5G will be so quick. Although, it will be expensive. When you consider it vis-à-vis what you stand to benefit from, the uptake will be very quick. 5G will help us address a lot of things.
“It will be useful for security, education, the health sector, and virtually all sectors of the economy. 5G will impact our economy greatly.”
PPC Limited, an ICT and infrastructure development company, recently said Nigeria and three other countries in Sub-Saharan Africa would witness increased 5G adoption in 2023. Also, Tower infrastructure companies have expressed readiness to help mobile network operators free up some required expenses to ensure the 5G technology is delivered to Nigerians at a lower cost. This is as they called for partnerships to bridge Nigeria’s $136bn infrastructure gap, stressing that if industry collaboration is achieved, more development could be attracted.
In light of this, the right collaboration and support to drive affordability both in the deployment of and subscription to the 5G service, mass adoption and usage would make the difference.
[ad_2]
