Africa Mobile Networks Group (AMN) has said that its first of its base stations in Nigeria to connect to SpaceX’s Starlink constellation is now live and using the LEO satellite network for backhaul connectivity.

It’s the first AMN base station to connect to Starlink since AMN and SpaceX signed a commercial deal in July 2023 to use Starlink for remote base station backhaul connectivity across Africa.

AMN said in a statement that Starlink’s low-latency connectivity enables its multi-carrier RANs to sustainably provide 2G, 3G and 4G services in remote, rural areas of Nigeria. AMN also said it also paves the way for the launch of 5G services, which AMN plans to do before the end of this year.

AMN, which builds, owns, operates and maintains mobile network infrastructure for African mobile network operators, currently operates 1,600 base stations across Nigeria.

The company said it will continue to install new sites throughout 2024 in Nigeria, as well as Democratic Republic of the Congo, Cameroon, Madagascar, Cote d’Ivoire, Benin and Rwanda. AMN also has operations in Bissau, Ghana, Guinea, Liberia, Sudan, and Zambia.

Starlink has been commercially available to consumers and enterprise customers since January 2023. Last week, according to a report from Nairametrics, Starlink slashed the price of its internet router by 45%, although its monthly subscription rate remains unchanged. No reason was given, but the report suggests the move may be related to the naira’s recent appreciation against the US dollar and other foreign currencies.

According to figures from the Nigerian Communications Commission (NCC), Starlink had over 11,200 subscribers in the country as of the third quarter of 2023 – which also makes it one of the top ISPs in Nigeria, the report said.

Ikemesit Effiong, Chairman of the Technology Committee of the Nigerian Bar Association Section on Business Law, has raised concerns about the sustainability of Nigeria’s telecoms sector amid ongoing economic challenges.

In an insightful article titled “The Imperative of Upholding Nigeria’s Telecoms Lifeline,” Ikemesit delves into the sector, emphasizing its pivotal role as both an economic engine and societal enabler. With approximately 15,000 direct employees and a significant 16% contribution to Nigeria’s GDP, the sector’s health is crucial for the nation’s well-being.

Ikemesit highlights various obstacles facing the telecoms industry, including frequent fibre optic cable cuts due to road construction and vandalism, multiple taxations, and challenges in acquiring rights-of-way. These issues, compounded by exploitative rent-seeking practices, have persisted despite efforts to resolve them.

“Central to the sustenance of any industry is a conducive economic environment that allows for sustainable growth and innovation,” writes Ikemesit. However, regulatory constraints that limit tariff adjustments hinder the sector’s ability to adapt to market dynamics unlike other industries.

Recent data from the National Bureau of Statistics (NBS) indicates a rise in inflation to 33.20% in March 2024, up from 31.7% in February 2024. This poses significant challenges for businesses striving to manage staff welfare and make necessary investments amid economic strains.

The inflationary pressures have led to price increases across various sectors, including agriculture, beverages, and services. Companies such as Nigerian Breweries Plc and Netflix have adjusted prices multiple times this year to cope with rising costs.

Recently, the quality of service has become a significant concern for subscribers across the country. Available data indicate that this issue may persist for the foreseeable future. The 70% broadband penetration target set by Bosun Tijani, Nigeria’s Minister of Communication, Innovation, and Digital Economy, was severely impacted in 2023, experiencing a decline of 14.2% from a peak of 48.28% in March to 41.87% in November.

With operators reporting financial losses in 2023 and a challenging outlook for 2024, it is evident that funding will pose a significant challenge for the necessary investments needed to transform the sector.

Describing the challenges of the sector in 2023, Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), said, “ALTON’s members currently pay at least 49 different taxes and levies. Additionally, our members continue to bear the brunt of multiple taxation and coerced compliance with tax and levy demands that have no legal basis by sub-nationals. This threatens investment, sustainability, and industry growth.

“Instances include – exorbitant Right of Way fees, increases under the Finance Act 2023 (such as an upward review of Tertiary Education Trust Fund Tax from 2.5% to 3%, imposition of Value Added Tax on cell towers (Base Stations), imposition of import levy on goods, removal of capital allowance on telecommunications goods and services under Section 32 of the amended Companies Income Tax Act), amongst others.”

In the past 10 years, telcos have maintained the same charges for calls and data, despite inflation rising from 8.05% in 2014 to 33.20% in 2024, and the dollar increasing from 185 naira in 2014 to about 1,000 naira in 2024.

Considering that this sector supports Nigeria’s 221.7 million active voice subscriptions and 160.2 million data subscriptions, with immense consequential economic and social value, leaving it to resolve its challenges independently or risk collapse poses significant threats to Nigeria’s socio-economic stability. Stakeholders in the sector are urging the government to either invest in the sector as needed or adopt a cost-reflective tariff to facilitate necessary investments.

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