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Diesel expenditure by Nigeria’s Telcos increased by 35%, hit N429 billion in 2023– Report

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Operating costs in Nigeria’s telecommunications sector rose sharply on the back of increase in the price of diesel which rose by 34.57% to hit N429.43 billion in 2023.

Nigeria’s potential for broad economic expansion is being hampered by its poor infrastructure. Recently, foreign businesses have begun departing the nation, and producers are already grumbling about the coming year. The Nigerian Bureau of Statistics noted that the price of diesel, which many depend on due to Nigeria’s poor electricity situation, increased from N288.09 per litre in January to N1126.69 per litre in December 2023.

According to the telecoms industry report, in the year under review, companies spent about N429.43bn on fuelling base stations, an increase of 34.57% of the N319.11bn they spent in 2022. This is because diesel prices soared in 2022 and remained at an elevated level in 2023.

In 2022, “the telecommunications industry has been heavily financially impacted following Nigeria’s economic recession in 2020 and the effect of the ongoing Ukraine/Russia crisis. This has resulted in an increase in energy costs, which constitutes an appreciable 35% of ALTON’s members’ operating expenses”, the report said.

Since 2022, telecom companies have been moaning about the negative impact of growing diesel expenses on their businesses. They used it as the foundation for their 2022 tariff review proposal to the NCC. Due to the increase, the Association of Licenced Telecoms Operators of Nigeria requested permission from the NCC in 2022 to increase charges by 40%.

The Nigerian Communications Commission revealed that as of the end of 2022, the nation had 127,294 base stations and 34,862 towers, while the sector incurred operational expenditures of N2.09 trillion in 2022, with diesel accounting for a significant portion of these costs.

In a plea to the House of Representatives, the telcos have bemoaned the ways in which their businesses are being adversely affected by factors such as depreciating currency, persistent challenges in obtaining foreign exchange at a reasonable price, escalated energy expenses, growing costs associated with protecting telecom infrastructure and field staff against escalating insecurity, and more.

The telcos said, “Notwithstanding the foregoing, the pricing regulatory framework has not been reviewed to account for changes in macroeconomic conditions and reflect the current cost profile of operators. As such, ALTON’s members are unable to price services at a sustainable rate”.

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Again, Starlink raises prices of its services in Nigeria

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Elon Musk’s satellite internet service provider, Starlink, has again jacked up the prices of its services in Nigeria after an earlier increase caused uproar among customers.

The service provider, in a statement released on Friday, informed its Nigerian customers that it would raise its monthly subscription prices, with the new rates set to take effect on January 27, 2025.

Under the new pricing regime, the lowest subscription tier will increase significantly from ₦38,000 to ₦75,000 per month, while mobile global roaming service will now cost ₦717,000 monthly.

The company stated that new subscribers will immediately pay the adjusted prices while existing customers will see the changes reflected in their upcoming bills.

In an email sent to users, Starlink said:

“To continue enhancing the Starlink network and provide reliable, high-quality service across Nigeria, we are adjusting our monthly subscription prices.

“These changes are part of our ongoing commitment to investing in the infrastructure needed to improve your experience with Starlink.”

This is the second time Starlink has attempted a price hike in Nigeria. The Nigerian Communications Commission (NCC) has rejected its previous increase in October on the grounds that the company had not sought the necessary regulatory approval.

However, insiders believe the NCC is set to approve an increase in the first quarter of 2025, which gives credence to insinuations that Starlink may have gotten an approval for the price increments.

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Safaricom Ethiopia launches 4G network in Gambella

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Ethiopia’s second largest telecom provider, Safaricom Telecommunications Ethiopia P.L.C., has announced the official launching of its 4G network services in Gambella and other surrounding areas.

The launching of the 4G network in the region, according to Safaricom Ethiopia CEO, Wim Vanhelleputte, highlighted the significant impact that enhanced telecommunications infrastructure could have on the region’s social and economic progress.

“In line with our commitment to digital education, Safaricom Ethiopia donated 20 laptops and 4 routers, including six months of free internet, to two high schools in Gambella City, supporting digital literacy and educational opportunities for local students,” Vanhelleputte stated.

Vanhelleputte reaffirmed Safaricom Ethiopia’s commitment to expanding its reach and ensuring that more regions gain access to reliable and high-speed internet.

“The introduction of the 4G network in Gambella is designed to deliver significant advantages to the local community,” he said .

“Enhanced connectivity will open doors to better access to information, education, and healthcare services. Additionally, it will create new opportunities for businesses and entrepreneurs, driving economic growth and development within the region.

“Safaricom Ethiopia’s move into Gambella aligns with its broader strategy to extend 4G coverage to more areas, furthering its mission of fostering nationwide connectivity,” the CEO added.

Alemitu Oumud, President of the Gambella Region who also spoke at the event, stated that, enhanced infrastructure is driving positive social and economic growth in our region.

“We commend Safaricom Ethiopia for its contributions to job creation, improving connectivity, and making Gambella a more attractive destination for investment,” Oumud said.

He stressed the potential of the new 4G network to drive business activities, attract investments, and foster entrepreneurship in the region.

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