Tower Operators Spend $80m Monthly on Maintenance

Telecommunications tower operators in the country spend some $80 million every month in the maintenance of towers they are operating.

Telecom towers houses base stations that Global System for Mobile communications (GSM), Code Division Multiple Access (CDMA) and 4G internet service providers use to deliver services to their customers.

Nigeria CommunicationsWeek investigations revealed that with adoption of co-location model by telecom operators and sale of towers to tower operators by GSM operators among others, 95 percent of the towers in the country are under the management of tower operators.

It was also gathered that presently 25,000 towers are actively in use by operators and it cost $3,500 to manage a tower housing three to five base stations while a tower housing a single base station cost $2,750 to manage every month.

60 percent of the cost of managing a tower goes to provision of power, such as diesel and maintenance of generators.

Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), said that the development in the management of towers is a testimony that the country’s telecommunications industry is responding to the dynamics of global economic trends, which makes operators more efficient as they focus on the core competent of service delivery.

“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.

He added that the present system of handing over towers to tower operators will create more jobs as it encourages springing up of supportive players in the industry. “This is also fallout of our internal regulatory mechanism to ensure growth in the industry. More so, tower sale could be as a result of administrative reasons, cost reduction or shareholders decision,” he said.

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

According to him, ‘the high cost of tower management is occasioned by service cost provided at the towers such as power and security. “Most towers 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.

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.