Telcos plan $75b CapEx as Nigeria sees rise in 5G network deployment

Telecoms operators in Nigeria and other parts of the region are expected to spend $75 billion on their networks from 2023 to 2030, mostly on 4G technology. This move is expected to improve service quality and takes telephony services to unserved and underserved communities. Nigeria currently has about 114 access gaps of about 27 million Nigerians without services.

The Global System for Mobile Telecommunications Association (GSMA), in the ‘2023 Mobile Economy Report for Sub Saharan Africa,’ noted that as a result of extensive 4G network buildout and growing 5G network deployments in Sub-Saharan Africa, capital expenditure (CAPEX) will be on an upwards trajectory over the next few years.

GSMA said this will begin to trend downwards closer to 2030 as operators turn their focus to generating returns on investment. It informed that the focus over the next few years would be on extending coverage, along with network upgrades. At the same time, operators will be ramping up investments to support the growing momentum behind 5G.

The telecoms body, which is the umbrella body for telecoms operators across the globe, including Nigeria, said 5G is expected to benefit the SSA economy by $11 billion in 2030, accounting for more than six per cent of the overall economic impact of mobile.

Much of the 5G benefits, according to GSMA, will materialise over the period to 2030, as some countries are in early stages of deployment and 5G economic benefits will increase as the technology starts to achieve scale and widespread adoption.

According to GSMA, while 5G is expected to benefit most sectors of the SSA economy, over 32 per cent of the benefits are expected to come from the manufacturing sector

It added that this would be driven by applications such as smart factories, smart cities, and smart grids.

GSMA said 29 per cent of the benefits will go to the services sector, while every other sector will benefit based on their ability to incorporate 5G use cases in their business.

While the Nigerian Communications Commission (NCC) put 5G penetration at 0.83 per cent, about two months ago and some 500, 000 subscriptions on the networks of MTN, Airtel and Mafab Communications, the global telecoms body noted that SSA would have 226 million 5G connections in 2030, equivalent to an adoption rate of 17 per cent, to be driven largely by Nigeria and South Africa.

“Nigeria and South Africa will account for almost half of these connections. 5G growth in the region will be slow but steady, as a larger share of the customer base will continue to migrate to 4G. Growing demand for the Internet is catalyzing the growth of the 5G fixed wireless access (FWA) market in the region, with operators such as Orange Botswana and Telkom South Africa having launched commercial 5G FWA services.

“FWA will act as a primary broadband connection and help improve coverage in the region. At the same time, it will give operators an opportunity to increase their number of subscribers and build new use cases,” GSMA said in the report.

GSMA in the report noted that there has been a steady growth of unique mobile subscribers in SSA.

According to the body, this would continue over the next seven years, taking the total to nearly 700 million by the end of 2030.