5G Technology Raises Telecom Foreign Investment By 129%
Fifth-generation technology rollout and investment in communication infrastructure increased foreign investments into the telecommunication sector by 129.21 per cent in the first 11 months of 2022, according to capital importation data from the Central Bank of Nigeria.
Capital importation into the telecom sector was $174.47m from January to November 2021. It, however, jumped to $399.91m in the corresponding period of 2022.
This leap in investment came after the successful auctioning of 5G spectrums to MTN Nigeria and Mafab Communications Limited in December 2021. According to the GSMA, the global body for telcos, telcos would need to invest $500m and build 6,000 base stations to successfully roll out 5G in 10 top cities of the country.
In 2022, MTN Nigeria and Airtel Africa disclosed that they invested N613.13bn in infrastructure in 2022. This signified a 14.19 per cent increase from the N536.91bn they both spent in 2021.
Commenting on its investment, MTN said, “Capital expenditure was N504.3bn, up 23.5 per cent, due to acceleration in coverage expansion, focusing on the 4G and 5G networks and our rural telephony programme.
“We deployed 9,027 4G sites, 588 5G sites, and 778 rural sites. 4G accounted for approximately 76 per cent of the total sites deployed during the year.”
According to telecom experts, 5G is expected to headline network investment and drive foreign investment into the sector. In recent years, foreign investments have reduced in Nigeria due to a myriad of factors. Despite this, experts say the profit margins and growth recorded in the communications sector will continue to drive growth.
Commenting on the growth of the sector, the Chief Operating Officer, Association of Telecommunications Companies of Nigeria, Ajibola Olude, said, “5G has contributed to this growth, which has led to increased investments.
“The rollout of 5G is driving investments, which are coming from abroad. The purchase of 5G investment is also driving growth.”
He also stated that several policies from the Federal Government and various state governments are attracting foreign investors to the sector.
He added, “You will see that the rate of data centers in Nigeria has astronomically increased, this is also responsible for great. There are a lot of opportunities in the digital economy, which is driving investors to make investments in the sector.
“Also, the sector has become the pride of the Nigerian economy which means that the adoption of communication and digital products has increased. Also, the return on investment is also responsible for this growth.”