• Wednesday, June 19, 2024
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Outlook for 2022: Telcos to focus on cloud, Internet of things, 5G adoption

Telcos risk losing revenue on planned airtime price hike

After emerging from the COVID-19 pandemic, the Nigerian telecom industry is entering a new phase and will be faced with a new set of challenges. This is due to the new innovations – cloud technology, internet of things (IoT), and 5G network adoption, among others, brought about by the digital adoption of the sector in the outgoing year.

According to experts, 2022 is projected to be a unique transition year for the telecom industry. While new government strategies that originated in the wake of the COVID-19 outbreak continue to be pumped into the global economy, the telecom sector is not exempted.

“The COVID-19 pandemic has accelerated the increased need to embrace digital culture. So, as Africans, one of the ways by which we can respond to the challenge thrown by the pandemic is to accelerate our digital transformation,” Isa Pantami, minister of communications and digital economy, said recently.

Read Also:Nigeria’s telcos record first internet subscription growth in nine months

Within the space of the 5G, the rise of the network as a service will push enterprises to adopt mobile edge computing (MEC). Edge computing in telecom provides execution resources (compute and storage) for applications with networking close to the end users, typically within or at the boundary of operator networks.

Edge computing can also be placed at enterprise premises, for example, inside factory buildings, in homes and vehicles, including trains, planes and private cars. The edge infrastructure can be managed or hosted by communication service providers or other types of service providers.

Experts say as 2022 comes around the capabilities provided by 5G managed services are going to push enterprises to re-evaluate their approach to the edge. Specifically, enterprises will begin to take advantage of the high reliability this distributed architecture provides.

Despite the high concentration on the 5G spectrum and its supporting technologies, Olusola Teniola, Nigeria national coordinator, Alliance for Affordable Internet, told BusinessDay that there was still work to be done as regards the 4G network being accessible across all parts of the country.

“The focus of the industry will be increasing the rolling of 4G networks alongside the target of the Nigerian broadband plan of 2025. We still need to focus on 4G networks in addition to deploying 5G networks licensing obligations sent by the Nigerian Communications Commission (NCC),” Teniola said.

The need for 5G to be adopted in the coming year is for users to begin to experience technologies that have been discussed around gaming, and immersive applications that require low latency to be appreciated by customers.

Also, increased usage of cloud technology in order to have an uninterrupted broadband experience in terms of high speed is expected. “We anticipate a gradual migration of cloud technology applications, and data being built inside Nigeria as opposed to outside Nigeria,” Teniola said.

Similarly, with the 5G spectrum launch, “the sector will see more foreign direct investments (FDI). For instance, the money for infrastructures is pitched at $500 million and it has to be funded, which will come from foreign investors, although local banks will contribute their quota.

“More innovation, which includes the internet of things (IoT) now that we have 5G, should also be expected as well as the level of competition will be heightened among telcos,” Ajibola Olude, executive secretary/chief operating officer at Association of Telecommunications Companies of Nigeria (ATCON), said.

The ability to support both long-term evolution (LTE) and 5G simultaneously will be a competition as the industry transitions from one ‘G’ to another. While some are excited about this development, others might likely not want to move from a private LTE network to 5G immediately, but will transition over time as its network demands evolve.

“The service provider or networking vendor that can enable that with the least amount of pain will have a significant advantage in the market,” Olude said.

In preparation for the 2023 elections, the telco industry is also not left out. Plans are being implemented to ensure that electronic voting is utilised at its maximum, in conjunction with relevant government agencies – including the Independent National Electronic Commission (INEC).

To ensure this, experts are clamouring for the adoption of clear data gathering across the country. “The use of analytics, where telcos can focus on trying to customise their offerings to consumers in a manner that it becomes personalised, will really go a long way. The demographics of the consumer base, the young ones more especially, to experience some of the services which include digital identities, and other forms of data capture,” Teniola said.

In the case of broadband penetration in 2022, the industry is expected to have access to forex in a meaningful manner. “Its commitment by industry players to commit significant amounts of capital expenditure to ensure that the broadband networks can be extended, not only within the urban areas where it is the capacity focus, but also extend into the rural areas. A lot of equipment, software, and sometimes skill sets need to be encouraged in the country and the industry can only achieve this if they have an enabling environment to be provided by the government,” Teniola stated.

Without this, broadband penetration might not reach its target rate at 47 to 48 percent by the end of 2022, from where it is now between 41 to 42 percent.

Speaking on the contribution of telcos towards the country’s GDP, Olude explained that with the presence of FDI in the country, GDP is expected to increase.

Telco operators must therefore transition to the fundamentally new network architecture, which is software-based, fully virtualised and cloud-centric. Seeing that “the future is digital, we should be committed to supporting and collaborating with African countries to maximise opportunities inherent in digital technologies. We should also be ready to avoid the pitfalls by instituting appropriate regulations,” Pantami said.