Telecom

Global Financial Crisis: What It Holds for Nigeria Telecoms Sector

Published

17 years ago

March 16, 2009

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When the global financial crisis started to show its effects in the middle of 2007 and into 2008 in United States of America and Europe, little did people know that it will spread to developing countries in spite of their generally weak integration with the rest of the global economy. It started gradually with the world stock markets falling, to large financial institutions collapsing or even been bought out, and governments in the wealthiest nations coming up with rescue packages to bail out their financial systems.
On one hand, many people are concerned that those responsible for the financial problems are the ones being bailed out; while on the other hand, global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world.
Today, almost every sector of the economy has been affected by the crisis; telecom industry is not left out.
In many countries, traditional telecom infrastructure has been excessively developed, and the saturation of remaining markets has reached critical mass. Bubbles have also emerged in the traditional operations market. Inflation rates are notably higher in emerging markets than in developed countries, and inflation may get out of control in some emerging markets. In some regions, due to slowdown of GDP growth, telecom operators will have weakened investment ability and willingness to do so. Only the strong will survive if there is a negative growth rate of -5%.
According to a recent World Bank release on the effect of the current global financial meltdown on emerging markets, there is going to be financial shortfall of between $270 billion and $700 billion of investment into emerging markets’ economies. This, the bank said will be as a result of private financial organizations shunning the market in view of the global financial crisis.
Telecom investments largely consist of financial capital or sovereign wealth funds, with an emphasis placed on long-term returns. If the markets are stagnant and the economic downturn is chronic, investors cannot see expected returns and they will slow down or stop investing, particularly during transformation in the early stages of telecom development when the balance sheets are still in the red.
The financial storm will expose the contradiction in the transformation of the traditional telecom industry, and the contradiction between the saturation of per capita access demand and per capita bandwidth demand. It will correct the course of bad investment as in the past, bringing more attention to per capita bandwidth, and cause some market bubbles to burst.
Market growth
The growth of market demand will slow and customers will reduce procurement, leading to a dramatic decrease in operating income for the IT and telecom industries. Financial institutions, large enterprises, and governments are always large consumers of telecom and IT services, spending heavily to replace equipment and upgrade networks each year. The financial crisis will make the financial chain tauter and lead to more complex embedded restrictions.
This position was corroborated by Mr. Bayo Banjo, managing director, Disc Communications. According to him, Nigerian operators are likely to feel the hit of the current global financial meltdown in the area of investment required for network expansion.
He explained that operators seek for facility from financial institutions to import telecommunications equipment for expanding network coverage as well as upgrade, but when the institutions are not strong to advance the facility, it will invariably slow down development in the sector.
He noted that Nigeria operation of some telecommunications equipment vendors may not downsize their staff because they are engaged in more of buying and selling as against manufacturing that is undertaken in the home country operation, which are affected because of low demand for their equipment.
Regulatory effort
Nigerian Communications Commission had responded to this situation when it organized a forum to determine the impact of the current situation on the development of telecommunications in Nigeria.
The forum drew telecom experts and economists to deliberate on the effects of the global economic crisis on the ICT industry in Nigeria and proffer solution on how to ensure that the crisis does not affect the ICT sector in Nigeria.
For telecom operators, it was an opportunity to seek attention to their growing cost of doing business and thereby requested for reduction in fees payable to government, a move they believe is panacea to the effect of the global economic meltdown on the sector and also will allow for inflow of more capital into the economy by no known means.
Chief Bayo Ligali, chief executive officer of Zain Nigeria, said that for the telecom operators to successfully thrive at this critical moment of global economic melt down there is the need for the government to reduce regulatory fees.
He stressed that there should be liberal interpretation and application of the regulatory provisions that have financial implication to stimulate growth in the sector.
Ligali requested for two years waiver on annual numbering fees as well as two years waiver on Microwave transmission fees, and expected government to also help operators resolve interconnect debt problems.
The Zain boss appealed for waivers of tax noting that tax paid on bad debt by the operators is a burden which NCC should help on by following the definition of revenue as stated by the International Accounting Standard Board on payment of tax on bad debt.
He proposed that the payment limit period should be reduced to three months instead of nine months which is obtainable presently because the early refund of the debt will form at least close to 300 base stations.
Engr. Ernest Ndukwe, the executive vice chairman, NCC, said that the continued success of Nigerian information and communication technology (ICT) is critical to the nation’s ability to ameliorate the effect of the global economic crisis on Nigeria.
He noted that the ICT industry is one private sector that is capable of providing an economic stimulus for the nation; adding that there is the need to evolve innovative ways of employing that industry as a catalyst for economic recovery in Nigeria
Ndukwe pointed out that there have been concerned voices within Nigeria, on the impact the crisis will have on the continued expansion and growth of the ICT industry in Nigeria. “Mobile technologies are the most powerful tools for combating extreme poverty in the most isolated part of the world.”
"As the regulator of the ICT industry and one of the advisers to the government on ICT matters, the NCC has found it expedient to convene the public forum so that as industry players, we can together address our concerns as well as proffer solutions to challenges that have the potential of affecting investment flow to the sector,” he said.
According to him, digital technologies will play a core role in ending poverty and enabling the world to join together through markets, social networks, and cooperative efforts to solve our common challenges.
The EVC observed that Nigeria is already feeling the effect of the global crunch with the oil and gas sector been severely hit leading to a sharp decline in the federal government revenue, stressing that in this period of the crisis only improvement on the ICT can salvage the nation.
Industry watchers that spoke to Nigeria CommunicationsWeek argued that some of the demands by operators to cushion the effect of the current financial crisis are frivolous, citing the issue of tax waivers where the income of operators are not affected due to the culture of Nigerians who prefer making calls to eating food.
They explained that phone usage in the country is not likely to be affected by global financial turmoil, due to Nigerians’ love for telephone.
Since 2008 Q3, more than 90% of enterprises around the world have experienced negative year-on-year growth. 43% of enterprises have started to cut IT spending, and 49% of financial institutions have started to reduce IT budgets. Almost all enterprises have started to cut expenditures in 2008 Q4. In 2009, all enterprises will invariably cut their expenses. Due to various reasons, downsizing has begun in the information industry and around 10% of the total workforce has lost their jobs; and this is in an industry where the number of employees has already been declining.
New dimensions
As governments tighten up monetary policies and financing costs increase, over-expanded and fragile links of the industry chain will run the risk of their finances drying up. This is especially true for newly established companies that rely on venture capital, and many of them happen to be the "anchors" of future supply chains. They will bear the brunt of the trauma. As credit and loans become difficult to obtain and liquidity drops, the traditional telecom industry will see slow development.
Multinational operators must also face the risks of exchange rates and inflation because their revenue is generated in local currencies. Due to the impact of the US dollar economy, most countries have experienced inflation (depreciation of currencies). As a result, most multinational operators’ revenues started to decrease in 2008, and revenues from operating companies will continue to drop. At the same time, multinational operators’ operational baseline is rising with associated growing costs. Job-cutting and other cost reduction measures become an inevitable choice.
The cost of debt and inflation will dramatically increase an operator’s cost. Financing will become a precondition to contract signing for operators both in developed and developing countries. Operators will also adopt light-asset operation models, putting greater pressure on equipment vendors to adopt new models like managed service and capacity service.
Consumers will not give up mobile voice or fixed broadband for now. Internet-related applications and solutions like mobile broadband and mobile Internet devices (MID)/PC-like terminals will become the new stars. In the terminal market, the high-end and the low-end segments will become the focus; iPhone, GPhone, and simplified black-and-white terminals will become primary choices for most people.

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Why Econet Wireless is Switching to VFEX

Published

1 day ago

December 19, 2025

Ebere Melum-Nwogbo

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After nearly 30 years on the Zimbabwe Stock Exchange (ZSE), Econet Wireless, the country’s biggest technology company, is preparing to leave the bourse and move its property and infrastructure assets to the US dollar-based Victoria Falls Stock Exchange (VFEX).

Why Econet Wireless is Switching to VFEX

Econet plans to spin off its towers, property and power installations into a new company, Econet InfraCo, which will be listed on the VFEX. Its mobile network operator business will be delisted from the ZSE.

Econet believes the market has failed to properly value its business and its assets. At the time Econet first released a cautionary on December 3, its market capitalisation was the equivalent of US$628 million.

A rally over the past days has lifted it to a market capitalisation – the number of shares times the share price – to around US$1 billion.

“For the last several years, the company has traded at a significant discount to its peers across Africa which trade at 6 – 8x EV/EBITDA.

“These peers have all already separated and realised value from their tower infrastructure whereas the company still owns its tower and other passive infrastructure which the company has now housed under a separate infrastructure company to be listed on the Victoria Falls Stock Exchange,” Econet said.

Econet will keep 70% of Econet InfraCo, with up to 30% used to settle an offer to shareholders who do not wish to remain invested.

The company argues that infrastructure assets are better suited to the VFEX, which trades in US dollars and attracts investors familiar with property and long-term infrastructure.

“Unlike the mobile network operator business in Zimbabwe, infrastructure assets represent a different class of investment, one that is better understood and valued within USD-based property and infrastructure markets.

“This is demonstrated by the higher Price-to-Earnings multiples at which listed real estate and infrastructure companies trade on the VFEX,” the company said.

Econet dominates Zimbabwe’s mobile market, with 88% of voice traffic, 82% of data usage and 73% of all subscribers. It has built the largest portfolio of telecoms assets.

By the end of the second quarter, it had 234 5G sites, 1,700 LTE sites, 1,900 3G towers and 2,860 2G locations.

In the half-year to August alone, it added 27 new 2G–4G sites and 100 new 5G sites.

In addition to these locations, Econet also holds other properties and power assets, including solar installations, Tesla batteries and generators.

The move follows a well-established trend in Africa.

MTN and Airtel Africa sold towers in Nigeria, Ghana, Uganda and Kenya to independent operators like IHS Towers and Helios Towers. Vodacom, Orange and Telkom South Africa have also carved out tower units through sale-and-leaseback deals.

Credit: Newsday

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Telecom

Qualcomm Completes Third Edition of Make in Africa Startup Mentorship Program

Published

2 days ago

December 18, 2025

Chike Onwuegbuchi

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Qualcomm Technologies Inc. has announced the successful completion of its third annual Make in Africa (QMIA) Startup Mentorship Program, marked by the virtual Make in Africa Finale 2025. The initiative underscores Qualcomm’s long-term commitment to fostering Africa’s vibrant innovation ecosystem through the broader Qualcomm Africa Innovation Platform.

Highlights:

The 2025 Qualcomm Make in Africa program supported ten innovative startups from Kenya, Tunisia, Nigeria, Benin and Senegal, each addressing local challenges by developing tech-enabled solutions across critical sectors such as healthcare, sustainable agriculture, climate resilience and mobility.
This year, the program attracted more than 400 applications from 19 countries, showcasing remarkable talent across the continent.
Farmer Lifeline, of Kenya, was announced as the 2025 Wireless Reach Social Impact Fund winner, recognizing its impactful use of wireless technology.
Applications for Qualcomm Make in Africa 2026 are now open. Applicants can visit the Qualcomm website to apply.

As a flagship initiative of Qualcomm, the equity-free program shines a spotlight on the creativity and drive of African founders leveraging advanced technologies such as AI, 4G/5G, robotics, connectivity and IoT to address pressing real-world challenges.

Now in its third year, the program remains steadfast in its mission to accelerate early-stage technology startups by providing tailored mentorship, targeted business coaching, expert engineering consultation and comprehensive intellectual property protection guidance – exemplified by resources such as Qualcomm’s L2Pro Africa training. This holistic support empowers founders to transform their visionary ideas into sustainable, market-ready solutions.

“This year’s cohort has demonstrated incredible ingenuity, transforming complex challenges into scalable, tech-driven solutions that will drive social and economic impact across the continent,” said Elizabeth Migwalla, Vice President International Government Affairs, Qualcomm Incorporated.

“Innovation is the driving force behind Africa’s future, and this year’s startups are a brilliant demonstration of that. The African Telecommunications Union (ATU) is proud to partner with Qualcomm for the Make in Africa 2025 program,” said John Omo, Secretary General of the ATU. “We are working to harmonize spectrum management policies, regional standards, and open data practices, but we know that true progress relies on large-scale support. That’s why we call on governments, universities, investors, and industry to support these initiatives – and any endeavor that places African ingenuity at the forefront.”

The 2025 cohort includes the following groundbreaking startups:

Aframend (Nigeria): Uses AI to explore African medicinal plants for new drug discovery and aims to turn local remedies into safe, affordable treatments for diseases.
AmalXR (Tunisia): Offers AI-powered virtual rehabilitation sessions on everyday devices, enabling easy patient and clinician progress tracking.
Archeos (Benin): Automates fish farming with solar-powered sensors and feeders, providing real-time data on water quality and feeding levels for improved fish health.
ClimatrixAI (Nigeria): Installs connected weather and flood stations with an AI platform to forecast street-by-street risk, enhancing early warnings and disaster response for local communities.
Ecobees (Tunisia): Builds smart hive monitors and a digital platform for real-time insights into beehive-health, to protect bees and crops that depend on them.
Edulytics (Senegal): Applies AI on handheld ultrasound devices for early detection of liver disease, aiming to make this special screening widely accessible.
Farmer Lifeline (Kenya): Deploys small, solar-powered devices that scan fields for pests and diseases and send alerts straight to farmers’ phones to protect crops.
Pollen Patrollers (Kenya): A women-led agritech startup using connected hive technology and AI to keep bee colonies healthy.
Solar Freeze (Kenya): Provides solar-powered cold rooms with remote monitoring enabling farmers to keep fruits and vegetables fresh and increase earnings.
Pixii Motors (Tunisia): Designs electric scooters with smart batteries that can be swapped in and out at local stations, aiming to revolutionize urban mobility.

Wireless Reach Social Impact Fund Winner

Kenyan innovator, Farmer Lifeline, was announced as the winner of the 2025 Wireless Reach Social Impact Fund. The fund, sponsored by Qualcomm® Wireless Reach™ Initiative, champions the innovative use of wireless connectivity to address pressing community. As the winner, Farmer Lifeline will receive dedicated funding and tailored technical support to scale its groundbreaking solution.

“Farmer Lifeline stood out with its innovative small solar-powered devices that scan fields to detect pests and diseases. This technology enables local farmers to effectively protect their crops, significantly increase yields, and improve food security”, stated Erica Ciaraldi, Vice President, Wireless Reach, Qualcomm Incorporated.

“Their visionary approach and dedication to agricultural resilience have positioned them as leaders in their field. They are driving meaningful change for smallholder farmers and inspiring others across the continent. This fund will empower them to scale their impact further, enabling broader reach and deeper influence across Africa and the world.”

In recognition of the groundbreaking innovations demonstrated by all finalists, each will receive stipends designed to accelerate their growth, support strategic development and safeguard their intellectual property. This comprehensive support underscores Qualcomm’s commitment to fostering innovation and ensuring these visionary projects can thrive sustainably.

Looking ahead: Launch of Qualcomm Make in Africa Startup Mentorship Program 2026

Building on the significant success of previous years, Qualcomm is excited to launch the fourth year of the program in 2026.

Applications for the 2026 Qualcomm Make in Africa cohort can be found at the Qualcomm website.

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Fynd Expands Global Footprint, Adds Africa With Surtee Group Partnership

Published

2 days ago

December 18, 2025

Ugo Onwuaso

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Fynd, an AI-native retail technology platform backed by Reliance Retail Ventures Limited, today announced its official expansion into South Africa, onboarding Surtee Group – one of the region’s most established luxury and fashion retailers – as its first strategic customer in the market. This milestone marks a pivotal moment for African retail, as legacy brands begin embracing digital transformation to meet the demands of a rapidly evolving consumer landscape.

Fynd

Fynd’s entry into Africa reflects its commitment to enabling digital transformation in high-growth retail markets worldwide. The move also comes at a turning point when South Africa’s e-commerce sector is projected to exceed R130 billion ($7.48 billion) in 2025, capturing nearly 10% of total retail sales – a fourfold increase since 2020.

According to Statista, South Africa is expected to have 11.7 million e-commerce users in 2025, with projections reaching 21.5 million by 2029. This growth is being driven by rising internet penetration, mobile-first shopping behaviour, and increasing trust in digital platforms. To meet rising consumer expectations, businesses are investing in AI and unified commerce platforms. Fynd’s scalable, AI-native stack is built to support this shift, enabling agility, personalisation, and operational efficiency.

“South Africa’s retail landscape is evolving fast,” said Ronak Modi, Chief Business Officer – Global at Fynd. “Consumers expect seamless, personalised experiences across every channel, and retailers need agile, intelligent infrastructure to keep up. Our platform is built to unify disconnected systems, speed up fulfilment, and elevate customer engagement; all without adding operational complexity.”

“South Africa is an exciting addition to our global footprint. The market is digitally ambitious, brand-forward, and ready for intelligent commerce infrastructure. Our goal is to help local retailers unify siloed systems, personalise engagement, and accelerate fulfilment without adding complexity.”

Surtee Group operates 94 boutiques and 2 e-commerce sites, comprising the multi-branded stores Levisons and the mono-brand boutiques, namely, Giorgio Armani, Michael Kors, Lacoste, Hugo Boss, VERSACE, TOD’S, Salvatore Ferragamo, Versace Jeans Couture, Emporio Armani, Burberry, Jimmy Choo, Luminance, Paul Smith, Coach, and Armani Exchange. They will implement Fynd’s unified commerce stack, including Storefronts, Order Management System (OMS), Warehouse Management System (WMS), and Clienteling tools to connect in-store and online operations, streamline inventory visibility, and launch brand-specific ecommerce storefronts across its brand portfolio.

While online retail continues to surge, offline sales still represent the vast majority of revenue for retailers in the country. Fynd will enable Surtee Group to unify its offline inventory online, power ship-from-store capabilities, and improve both margins and sell-throughs. Additionally, products like Clienteling will empower in-store teams to engage customers better and drive incremental sales through personalised recommendations and seamless omnichannel experiences.

Fynd’s entry into the market is designed to meet this demand. Its AI-native platform enables real-time stock visibility, ship-from-store capabilities, dark store orchestration, and intelligent customer engagement all within a single scalable solution.

As part of its digital transformation roadmap, Surtee Group aims to consolidate its leadership in luxury and fashion retail while expanding into e-commerce and improving omnichannel agility.

“We were looking for a partner who understood both the technical and strategic dimensions of unified commerce,” said a Surtee Group spokesperson. “Fynd stood out for their proven scalability, consultative approach, and deep experience with global fashion brands, many of which align with our portfolio. Their unified stack enables us to modernise operations while building a connected, brand-first customer experience.”

Fynd has already scaled across India, the GCC, and Southeast Asia, and now adds Africa to its regional presence. With Surtee Group leading the transformation, Fynd is positioned to play a key role in powering unified commerce adoption across South Africa’s growing digital economy.

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