ISPs Cry Foul over $2,000 Tower Rental Cost

Internet Services Providers (ISPs) have lamented over high cost of tower rental in the country and said that it frustrates their effort towards expanding services because it drains their revenue.

The operators which included Spectranet, Direct On PC and Mobitel, stated this in a presentation to Nigerian Communications Commission (NCC) on their challenges noted that tower rental cost is much higher compared to other developing countries because infrastructure providers face unique problems such as power, theft & security.

“In Nigeria huge portion of ISP revenue goes towards connectivity charges and tower rentals,” they stated.

Nigeria CommunicationsWeek Investigations revealed that colocation facility providers charge operators $2,000 monthly for tower rental and each tower houses about five operators.

 It was gathered that similar service in India attracts just $300 monthly.

Sunday Folayan, president, Internet Service Providers Association of Nigeria (ISPAN),  said that tower rental cost in the country will not be cheap as it is determined by some factors which include number of users on the tower as well as power and security provided in the base stations.

“I’m not surprise that tower rental cost is high because the cost of powering base stations with generators is high. If we fix power problem in this country every other thing will take shape,” he added.

Lanre Ajayi, president, Association of Telecommunications Companies of Nigeria (ATCON), identified two factors as responsible for high cost of tower rental in the country, which are competition and service cost.

According to him, ‘competition in the co-location business is not deep enough to bring about reduced cost. Presently, there are few companies providing co-location facilities in the country’.

He added that high cost of tower rental is also occasioned by service cost provided at the base stations such as power and security. “Most base stations are powered by generators and the cost of gas is high, they provide security at the towers. These are outside the control of co-location operators,” he said.

He however, urged government to set up an intervention fund to support the growth of ICT in the country just as she did in the entertainment industry, from where small operators could borrow to expand their network.

Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), agreeing on local cost of services at tower as determinate factor, noted that cost of service provision in two different environments are not the same as in Nigeria and India.

“In Nigeria, tower operators are faced with problems of approval cost, multiple regulations, multiple taxations and maintenance cost. Power is a challenge as cost of diesel is high; today you buy N140 per litre tomorrow you buy it for N150. These costs are not insignificant and affect the business,” he said.

It would be recalled that recently, three major GSM operators MTN, Etisalat and Airtel have sold their towers to co-location operators as a way of offloading the burden of tower maintenance. What it means is that they are now on rent on those towers previously owned by them and are to pay monthly rents like ISPs.