Telecom
Ovum Says Communications Industry Capex Favours ICPs
Communications industry capex is shifting rapidly to favor Internet content providers (ICPs) such as Google, Apple, and Facebook as traditional telcos tighten their capex budgets in the face of weak revenues, according to global analyst firm Ovum.
According to a new forecast from Ovum, ICP capex grew from US$23bn in 2008 to US$46bn in 2013, and it will grow well over the US$100bn mark by 2019.
ICPs are starting to spend heavily on their networks, particularly on data centers and cloud infrastructure.
Telcos, aka communications service providers (CSPs), are likely to keep capex largely flat over the next several years, from the (approximate) 2014 level of US$340bn.
That’s partly because revenue growth for the CSPs is hovering at around 2% per year, limiting their network investment options.
Matt Walker, Ovum principal analyst and report author, noted that ICPs are recording much stronger revenue growth, and some, notably Google, spend more of their revenues on capex than typical large CSPs.
“Ubiquitous broadband and user-friendly fixed and mobile access devices have changed the telecom industry dramatically. Enormous new value is being created by the new business models, apps, and service platforms now available to end users, many enabled by ICPs.”
However, Walker noted, this transition is not easy for many industry players, especially large CSPs, forcing them to tightly control network spending. To compete with the adjacent market ICPs, they need to explore partnerships, leverage start-ups and ecosystems for innovation, consider a broader range of suppliers, and look realistically at what M&A could accomplish to improve their strategic positioning.
Even as ICP capex spikes, CSPs will dominate network infrastructure markets for many years to come.
By 2019, fixed and mobile CSPs will still account for 29% and 44%, respectively, of total communications provider capex, while ICPs will likely reach 24% of total capex.
Carrier-neutral providers (CNPs), mainly tower and data center specialist providers such as Crown Castle and Equinix, will chip in another 3%.
While small spenders, CNPs are playing a crucial role in the overall functioning of the world’s networks, Walker said.
CSPs are raising cash by spinning off tower assets to cell tower CNPs, for instance, and relying more on these specialists for incremental tower coverage.
Data center–focused CNPs are also carving out a strong niche, providing multitenant data center space to CSPs, ICPs, and enterprises.
Like companies in other network industries, CSPs have to spend heavily on their networks for both growth and basic maintenance.
Upgrading networks with new technology to support a lower cost base, new features, or better performance will continue to be part of CSPs’ annual planning.
A tight revenue climate puts a ceiling on capex growth, but capex levels will remain high. Walker concluded, “CSPs that fail to maintain their networks, upgrade to meet the competition, and deploy new services will simply fail in the marketplace.”
The report analyzes Ovum’s capex forecast for communications service providers (CSPs), Internet content providers (ICPs), and carrier-neutral providers (CNPs).
Total spending was US$2.1 trillion over the 2008–13 period; for 2014–19 we forecast spending of US$2.6 trillion, with growth driven largely by the ICPs.
With a shift in relative spending will come a shift in industry influence.
Ovum is a leading global technology research and advisory firm.
Through its 180 analysts worldwide it offers expert analysis and strategic insight across the IT, telecoms, and media industries.
Founded in 1985, Ovum has one of the most experienced analyst teams in the industry and is a respected source of guidance for technology business leaders, CIOs, vendors, service providers, and regulators looking for comprehensive, accurate, and insightful market data, research, and consulting.
With 23 offices across six continents, Ovum offers a truly global perspective on technology and media markets and provides thousands of clients with insight including workflow tools, forecasts, surveys, market assessments, technology audits, and opinion.
In 2012, Ovum was jointly named Global Analyst Firm of the Year by the IIAR.
In addition, Ovum operates a large portfolio of technology conferences annually in Europe under the OvumLive events brand, presenting a more interactive opportunity to learn from its analysts. Its flagship event – Ovum Industry Congress – attracts over 300 end-user attendees every year.
Ovum is a division of Informa plc, one of the leading business and academic publishing and event organisers globally, headquartered in London. Informa is quoted on the London Stock Exchange.
Airtel Nigeria, as part its ongoing commitment to delivering a seamless and exceptional retail experience for its customers has launched its new Company-Owned-Company-Operated (COCO) retail store in Sangotedo, Lagos, on Friday, 24th January 2025.
The new retail store aligns with Airtel’s dedication to providing topnotch experience for its customers, offering end-to-end customer support, instant activation of new SIM cards, bill payments, data plan subscriptions, device purchases, and troubleshooting services.
Speaking during the launch, Femi Oshinlaja, Chief Commercial Officer, Airtel Nigeria, reiterated Airtel’s commitment to delivering world-class service to its customers.
“At Airtel, our mission has always been to delight our customers by delivering unmatched satisfaction and we understand that connectivity is the lifeblood of modern business and everyday life. This is why we are passionate about ensuring that every customer’s journey with us is seamless, convenient, and rewarding,” he said.
“We are proud to be part of the Sangotedo community and excited to deepen our partnership with the people and businesses in this vibrant part of Lagos. This shop is a reflection of our belief that access to excellent telecommunications services should be within everyone’s reach,” he added.
The launch event was attended by senior Airtel executives and included a guided tour of the cutting-edge facility, showcasing the innovative features and personalized services that customers can now enjoy. Leveraging the latest retail technologies and best practices, the store sets a new benchmark for customer service excellence in the telecommunications industry.
In her closing remarks, Human Resources Director, Airtel Nigeria, Adebimpe Ayo-Elias emphasized Airtel’s goal in promoting quality customer service.
“At Airtel, we understand the importance of having a conducive environment for effective customer service and with the launch of this new shop, we have made provisions for 24 seats to accommodate everyone.
“Every customer who walks in is assured of receiving top notch quality customer care. We would continue to be the reason to imagine and look forward to achieving even greater milestones,” she said.
Airtel remains committed to enhancing its retail footprint across Nigeria, ensuring customers have convenient access to superior telecommunications services.
Galaxy Backbone (GBB) proudly recognizes the outstanding efforts of its employees, whose dedication and innovation have significantly contributed to the organization’s success and recognition in recent times.
These achievements underscore GBB’s unwavering commitment to excellence in service delivery and pioneering technological solutions that advance Nigeria’s public sector.
The development, launch, and implementation of the GBB GovMail Email Platform in November 2024 by the Head of the Civil Service of the Federation, marked a transformative milestone in Nigeria’s digital transformation journey. GovMail provides Civil and Public servants across the public sector with a secure, efficient, and reliable platform for official communication.
By fostering seamless collaboration and ensuring the integrity of government data, GovMail directly supports the federal government’s vision for a digitally enabled public sector that prioritizes accountability and efficiency.
This groundbreaking initiative was driven by an exceptional teamwork, led by GBB’s, Head of Cloud Operations and supported by GBB’s team of Cloud Solution Specialists. Their innovation and “can-do spirit” embody GBB’s commitment to delivering cost-effective technology solutions that empower governance and enhance service delivery to citizens.
In recognition of their outstanding contributions, the team members were formerly recognized and commended by GBB’s Executive Management, led by the Managing Director/CEO, Professor Ibrahim A. Adeyanju. The expressed delight by the team’s spirit, commitment and dedication and encouraged other members of Staff to emulate their great work for GBB, the Public sector and the nation at large.
In a similar way, GBB also commended a member of its Datacentre Team for his exceptional skill and dedication in responding to a critical incident at the National Shared Services Centre (NSSC) in 2024. His swift actions safeguarded critical infrastructure, and ensured uninterrupted business continuity. These Individuals have in their unique ways, shown professionalism and technical expertise, which aligns with GBB’s core values.
These commendations highlight GBB’s dedication to fostering a culture of excellence, innovation, and recognition. Through initiatives like GovMail and the unwavering efforts of its talented workforce, GBB continues to lead the charge in advancing Nigeria’s digital transformation agenda and strengthening governance through cutting-edge technologies.
Federal government has signed a Memorandum of Understanding (MoU) with the West Indian Ocean Cable Company (WIOCC) to provide internet facilities and services to three million Nigerian homes.
The project, backed by a $10 million initial investment from WIOCC, aims to enhance internet access in both urban and rural areas, bridging the digital divide and promoting inclusive development.
Bosun Tijani, minister of Communications, Innovation, and Digital Economy, signed the agreement on behalf of the Federal Government, while Darren Bedford, WIOCC’s group chief development officer, signed on behalf of the company during the ceremony held in Abuja.
Tijani noted that the initiative would facilitate the connection of fiber optic cables to Nigerian homes, schools, hospitals, and public offices, enabling reliable internet services.
“The partnership will create opportunities for training Nigerians and supporting the local manufacturing of accessories such as batteries,” Tijani said.
The Minister said that widespread internet connectivity in Nigerian homes and offices would soon drive down the prices of data, calls, and SMS, as Nigerians would have alternative platforms for internet access across the country, beyond just their phones.
Tijani explained that the development is a key part of the current administration’s efforts to position Nigeria as a $1 trillion economy in the coming years, with both the government and private sector making aggressive investments in digital infrastructure.
He added that once completed, the project would provide Nigerians in cities with a minimum internet speed of 25Mbps for downloads at home, while those in rural areas would have at least 10Mbps download speeds in their homes.
According to him, “This company is already making significant investments in Nigeria, starting with their submarine cable investment. However, what’s even more important is that they are bringing something long overdue for our people – fiber-to-home connectivity.
“Imagine needing to use the internet – this is the global standard. You shouldn’t have to wait to use it on your phone. The ability to access top-quality, world-class service is only possible if you have that kind of connection. Our goal is to make this mainstream, so it’s not just available in a few high-end estates or parts of Lagos. They are committing to connecting around 3 million homes in the coming years.”
In his remarks, Darren Bedford, of WIOCC, said that the MoU signed with the Federal Government aimed to bring internet directly to homes, hospitals, schools, and other key establishments.
Bedford stated that the initial phase of the investment would cost his company approximately $10 million, with plans to expand coverage to more states, local governments, and institutions.
He highlighted that over 40,000 homes and several institutions have already been connected with fiber infrastructure for internet services. However, he acknowledged challenges, including Right of Way (RoW) issues and insecurity in certain states.
He emphasized the significant impact of the project, noting that most of Nigeria remains unconnected, with people and businesses relying on mobile internet rather than high-speed broadband. “This project is the first step in creating an environment where Nigerians can participate in the global digital economy,” he said.
With an initial target of connecting 3 million homes, Bedford explained that the goal is to set realistic expectations, allowing for reassessment during the rollout.
He suggested that the target could grow to 10 or even 30 million homes as the project progresses
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