Towards the concluding week of January, the Nigerian government launched the National Policy on 5G, which signifies its willingness to make the technology a reality in the country.
President Muhammadu Buhari in his statement extolled the benefits of 5G, particularly in tackling the insecurity situation in the country. He instructed the security agencies to leverage the technology to address the problem in the country.
While the President’s enthusiasm for 5G may be a welcome development for operators, the reality of the commercialisation of 5G technology in Nigeria depends more on the policies enabling its deployment. Mere rhetorical postulation will not be enough to convince investors to deploy at speed, or that the economies of scale make sense, according to people knowledgeable in the industry.
With less than 18 months left of its tenure, President Buhari administration can fast-track these five policy steps to enable investors deploy quickly:
Workforce training
One of the biggest CAPEX for 5G operators is the scarcity of talent for the technology.
The two operators MTN Nigeria and Mafab Communications are going to need a lot of human resources to be able to deploy at scale and it may be too much on their CAPEX to directly be involved in the training of the workforce.
Being a relatively new industry, the Nigerian government can invest in the training of the workforce for 5G technology by enlisting the universities and other post-tertiary institutions across the country to achieve this. The government can also fund training and retraining for workers to prepare for and meet 5G-related workforce needs.
The Industrial Training International (ITI) in a report suggests that this training and retraining can be done in conjunction with industry to ensure that it meets the required skill set. Policymakers, therefore, should make available incentives to the industry to support training.
Availability of spectrum in a timely manner
Making additional spectrum available in a timely and affordable fashion is very important for accelerating advanced network deployment, says the GSMA in a report.
This is how South Korea and the US were able to deploy the technology at a quicker rate. Korea, the frontrunner in the global 5G race, made 280 MHz of the 3.5 GHz and 2400 MHz bands available in 2018. The US Federal Communications Commission (FCC) developed a “5G FAST” plan to make auctioning high-band spectrum a priority.
Auctions have already been concluded for the 28GHz and 24GHz bands, with the 37GHz, 39GHz, and 47GHz being auctioned at the time of writing this report. In Singapore, the IMDA plans to release licences for both 3.5GHz and mmWave spectrum together.
The GSMA also notes that there should be a balance among competing objectives, such as maximising proceeds from spectrum auctions, fostering competition to keep consumer prices low, and enabling the build-out of new mobile broadband infrastructure.
Access to site locations
Although the President claims his administration was able to implement in 2019 the N145 fee agreement for Right of Way for fibre optic cables reached in 2013, the reality on the ground is different for all operators. The charges remain exorbitant in about 29 states.
Besides, local authorities deny carriers access to locations until they have made certain unspecified payments. The government can specify spaces for the deployment of fibre and 5G equipment. For example, in Japan, operators can install 5G base stations on 208,000 traffic lights across the country. The Japanese government also proposed that the costs of using the traffic lights for 5G deployments be shared between operators and local administrations. In the same vein, the UK’s Electronic Communications Code facilitates operators’ access to macro and small cell infrastructure on public and private land.
Financial support for deployment
While the Nigerian government is fixated on generating revenue from the sale of 5G licence, it should also realise that it has a financial obligation towards the deployment of the technology, especially if it wants to ensure ubiquitous access to connectivity. There should be a subsidy from the government for 5G deployment.
Many investors including MTN, which has the widest reach, would be hard-put to deploy its 5G network to rural areas where it has little chance of making returns on investment. This is partly why 4G deployment in the country is still at 37 percent because it is very expensive to provide full service to every corner of the country.
Read also: Rich countries embrace network sharing arrangements for speedy 5G rollout
Due to the high cost of 5G equipment, operators in the UK had to agree with the government to build a shared rural network with financial contributions from both industry and government. In Shenzhen, the city administration offered CNY10,000 for every standalone 5G base station constructed, up to 15,000 base stations or a total of CNY150 million. They also offered electricity cost subsidies of up to three years for 5G sites.
Ease of sharing network agreements
Due to the enormous CAPEX and OPEX burden of network deployment on operators, network sharing has become a strategy aimed at reducing the cost weight. And this is not limited to just the 5G network as operators have used this method for previous generations.
According to Mckinsey, operators have been able to reduce the total cost of ownership by up to 30 percent while improving network quality through sharing a variety of both active and passive equipment. 5G will be no exception, with operators eyeing new ways of accelerating the deployment of an otherwise daunting investment.
A prominent example of a network sharing agreement is the one between Orange Belgium and Proximus in July 2019. The operators said the agreement will improve coverage of the 5G network in Belgium with the combined number of mobile sites rising by 20 percent higher than the existing separate radio access network. The agreement would never have been possible without the flexibility exhibited by the Belgium government.
Also in 2019, Orange and Vodafone Spain entered into an active sharing agreement for mobile infrastructure on 14,800 masts and back-haul components, including joint use of 5G sites. The deal with Orange was expected to deliver cumulative OPEX and CAPEX savings to Vodafone of $667 million over a period of ten years.
New operators like Mafab may need to tap into shared agreements to reduce the cost, it is therefore important the government demonstrate flexibility in such transactions.
“It is vital for the wider success of 5G that such cooperative agreements do not run into regulatory roadblocks. A growing number of regulators are taking steps to permit, or even encourage, shared deployment, especially for small cells, recognising that network operators need the flexibility to share infrastructure assets,” the GSMA noted in its policy report.
