Telecom
Addressing Key Dichotomy In Africa’s Telecom Market With Virtualized 2G
By Christoph Fitih
Africa is taking a giant leap of ‘faith’ when it comes to mobile telecom. The region, where over 50% of the population still has no access to mobile phones, has suddenly seen a flurry of activities among telecom players to launch 5G services.
The service providers have started to conduct trials for the 5G technology, which enables many futuristic use cases, including remote surgery, autonomous driving, Artificial Intelligence, Augmented Reality and Virtual Reality.
Recently, Vodacom — the African arm of Vodafone – announced the launch of Africa’s first commercial 5G network in Lesotho, a tiny landlocked country in southern Africa. The 5G rollout, though, is limited with the services being provided initially to only two corporate entities.
Vodacom has a temporary license for 5G testing in Africa, while MTN has tied up with Ericsson and ZTE for the launch of services in Africa. Though they have not made much headway beyond public demonstration, 5G seems to be the new area of competition among telecom operators in the continent.
Gaping Digital Divide
One piece of fact, though, should not get lost in the entire buzz around the launch of a commercial 5G services in Africa. And the point is that Africa continues to remain an under-penetrated telecom market, and the majority of its ‘connected’ population still uses the basic services.
This is true for Nigeria as well. The Nigerian telecom industry contributed 9.8% to the country’s Gross Domestic Product in 2016. At the end of 2017, the country boasted of 136.49 million mobile subscribers. It is also one of the fastest growing telecom markets in Africa. Even so, nearly 30% of the population is still to experience connectivity. The telecom industry has contributed immensely to Nigeria’s economy and has had huge impact on the lives of the country’s citizens. A case in point is the growing usage of mobile banks, which has made it easier for people to access banking services anytime and from anywhere. This is not different from the rest of Africa.
Look at the figures for yourself. Africa continues to be the region with the largest number of unconnected in the world. Globally 3.4 billion people are without internet access, and 830 million out of these live in Africa. Similarly, 660 million people in Africa out of 870 million globally, are without a mobile connection. Nearly 70% of the African population does not have access to mobile broadband.
Nigeria, like Africa, still remains largely a 2G market with over 50% mobile subscribers using 2G network. At the same time, the gradual shift towards better network technology is happening fast. According to GSMA’s recent report on Mobile Economy 2017: Sub-Saharan Africa, 3G will remain the dominant mobile broadband technology for the foreseeable future, but the 4G adoption is rising rapidly following increasing network rollout.
However, 5G making a meaningful contribution still remains a pie in the sky. The latest Ericsson Mobility Report shows that the Middle East and Africa would be one of the regions with the least — less than 5% of the continents entire population — subscriptions for 5G by 2023.
It is, therefore, not hard to see that the telecom companies are unsure whether they should invest in connecting the unconnected or start preparing the networks for 5G. This is not an easy decision considering the low ARPU and low adoption of the smartphone in the region. The market is not yet mature for 4G or 5G, but the service providers would want to secure their investments for future technologies as well.
The Virtualization Push
Virtualization can help the telecom sector tide over the dilemma – whether to concentrate on strengthening the basic infrastructure to address the digital divide or to focus on the roll-out of 5G.
Traditional telecom networks require several high-cost and often bulky equipment to deploy and operate. These types of equipment need large spaces to store, have a short life cycle and consume energy. Besides, hardware-based networks are difficult to upgrade. By shifting networks to virtual systems, telecom operators can overcome all these problems.
Telecom companies in Africa can, therefore, achieve multiple goals by shifting their 2G networks to virtualized networks.
Unlike the legacy 2G, the virtualized 2G is easy to deploy, maintain and upgrade to newer technologies. This means that the telcos will be able to address the current demands of their subscribers and can easily and quickly move to any new technology, be it 3G, 4G or 5G. Essentially it leads of network simplification by virtualizing different technology network functionalities on one platform. Since the platform is software-based, the upgradation itself is easy and doesn’t even require a visit from site engineer.
The installation and maintenance of Virtualized 2G is automated, which makes it easy to deploy and also brings down the capital and operational expenditure for the service providers. It makes the network agile, flexible and easy to scale. The service providers will be able to expand quickly and also launch newer services faster. Virtualized 2G reduced the expenditure at every stage, from deployment, maintenance, and upgradation. With Virtualized 2G the network is future ready even as you cost effectively meet the current requirements of your subscribers.
Lower cost, easy deployment, and easy upgradation allow operators to keep building 2G low-cost capacities in areas untouched by telecom network, while at the same time continuing to allocate resources and time in expanding their 4G LTE and 5G networks.
Reliable and affordable broadband is crucial for the growth of the region’s economy. It leads to a more inclusive society, enhanced collaboration and opens up a plethora of global opportunities for the local businesses. Besides it encourages entrepreneurship and leads to generation of more and newer jobs. Nigerian economy stands to gain enormously if the service providers leverage virtualized 2G to push for expansion of connectivity in all regions and segment of the country.
Christoph Fitih is Director Sales – Africa, Parallel Wireless
Wireless Application Service Providers Association of Nigeria (WASPAN) has asked the Court of Appeal to suspend the enforcement of the Federal Competition and Consumer Protection Commission’s (FCCPC) Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025 (DEON Regulations).
WASPAN warned that the implementation before the determination of its appeal could expose telecom value-added service providers to sanctions and disrupt their operations.
Millions of subscribers across the country rely on borrowed airtime to communicate.
Seun Sofoluwe, an Abeokuta, Ogun State resident, said another interruption would have severe consequences for many Nigerians who depend on airtime and data lending services for their daily communication needs.
“A lot of people depend on the services, and it will be very bad for them, especially those who are so reliant on it that they do debt-to-debt servicing,” he said.
Debt-to-debt servicing refers to the practice of repaying an outstanding airtime loan immediately to qualify for another advance, underscoring the extent to which some subscribers depend on the facility to remain connected.
Sofoluwe’s concerns echo the experience of Lagos-based employee Farouk Rabiu, who recounted the hardship caused by the six-month suspension of airtime lending services before they were restored.
“I was devastated because, after exhausting my data, I was hoping to borrow credit to access my bank account. Instead, it was a major disappointment,” Rabiu had said after the services resumed.
Adding another dimension to the debate, Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), said the earlier disruption showed that airtime credit had evolved far beyond a conventional telecommunications offering.
“What this episode demonstrated is that airtime credit is not a financial product in the way regulators initially characterised it. It is economic infrastructure that approximately 40 million people use regularly, with the vast majority of them at the base of the economy,” Adebayo said.
WASPAN, which represents licensed value-added service providers, has asked the Court of Appeal to restrain the FCCPC from enforcing the DEON Regulations pending the hearing of its appeal against the July 20 judgment of the Federal High Court in Lagos.
The association argued that immediate enforcement would expose operators to sanctions, create regulatory uncertainty and disrupt telecom-enabled services, including airtime credit and data advances, used daily by millions of Nigerians.
The FCCPC, however, has defended the resumption of enforcement, insisting the regulations are intended to sanitise the digital lending industry, curb predatory debt recovery practices, protect consumer data and eliminate illegal digital lenders.
The Court of Appeal is expected to determine whether enforcement of the regulations should remain suspended while it considers WASPAN’s appeal, a decision that could shape the future of telecom-based digital lending services and determine whether subscribers continue to enjoy uninterrupted access to airtime and data credit.
Nigerian Communications Commission (NCC) and the Rural Electrification Agency (REA) have entered into a partnership to deploy renewable energy solutions for telecommunications infrastructure in rural and underserved communities, a move expected to reduce operators’ energy costs and improve network availability.
Abraham Oshadami, executive commissioner for Technical Services at the NCC, disclosed this during the signing of a memorandum of understanding (MoU) in Abuja.
According to Oshadami, the NCC-REA Stakeholder Forum and MoU signing ceremony will enable telecom base stations located near mini-grids to access cleaner and more affordable electricity, reducing their reliance on diesel-powered generators.
He said the agreement came at a time when telecom operators are facing rising operational costs due to increased spending on diesel to power network sites amid unreliable electricity supply from the national grid.
The partnership reflects the growing relationship between the power and telecommunications sectors, as both rely on each other to deliver essential services.
Oshadami explained that while telecom infrastructure requires a steady power supply to remain operational, digital connectivity also supports electricity services such as smart metering, electronic payments and remote customer management.
According to him, the collaboration is aimed at improving access to reliable electricity and telecommunications services, particularly in remote communities where inadequate power supply has slowed digital inclusion.
He said both agencies had identified telecom base stations located within one to two kilometres of existing mini-grids, allowing the implementation of the initiative to begin immediately.
“Where mini-grids exist, we are able to identify nearby base stations and connect them to those power sources,” Oshadami said.
He added that future mini-grid projects would be planned with telecommunications infrastructure in mind, ensuring that electricity investments also support the expansion of digital services.
Airtel Nigeria has secured a fresh 10-year renewal of its spectrum licence from the Nigerian Communications Commission (NCC), reinforcing the telecom operator’s long-term commitment to expanding broadband connectivity and improving digital access across the country.
The renewed licence covers Airtel’s spectrum holdings, which are critical to the delivery of voice and high-speed data services, providing regulatory certainty for continued investments in network expansion, capacity upgrades and improved customer experience.
According to the company, the renewal underscores confidence in Nigeria’s telecommunications sector and will support its ongoing efforts to bridge the country’s digital divide by extending quality connectivity to more underserved communities.
Sunil Taldar, chief executive officer, Airtel Africa, said the renewal provides the company with the confidence to continue investing in Nigeria’s digital infrastructure.
He said, “The spectrum renewal reaffirms our long-term commitment to Nigeria, our largest market. It gives us the certainty required to continue investing in network expansion, improve service quality and accelerate digital inclusion for millions of Nigerians.”
Taldar added that Airtel remains focused on expanding broadband access and supporting Nigeria’s digital economy agenda through sustained investments in telecommunications infrastructure.
He further said, “We appreciate the Nigerian Communications Commission and the Federal Government for their continued support in creating an enabling environment for investment. We remain committed to delivering reliable and affordable connectivity while contributing to Nigeria’s socio-economic development.”
Meanwhile, Industry observers said the licence renewal removes regulatory uncertainty and allows Airtel to pursue long-term capital investments, including the expansion of 4G and 5G networks, as demand for mobile data and digital services continues to grow across Nigeria.
The renewal comes as telecom operators continue to invest heavily in broadband infrastructure to meet rising data consumption and support government efforts to achieve Universal digital access.
Furthermore, It also aligns with the NCC’s objective of ensuring efficient spectrum management while encouraging sustained private sector investment in the country’s telecommunications industry.
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