by Lux Maharaj, director – Africa Sales at Parallel Wireless.
The Nigerian telecommunications industry is facing many challenges, and now is the time to start exploring innovative technology solutions to address the problems, so the industry is able to realize its real potential.
The telecom industry has contributed immensely to Nigeria’s economy. It has had a transformational impact on the lives of Nigerian citizens. For example, mobile banks have made it easier for people to access banking services in the country.
At the same time, a number of challenges and problems have prevented the sector from realizing its true potential. The persistent shortage of power coupled with low paying capacity of the subscribers has put immense pressure on the profit margins of communications service providers.
The expansion in the rural areas is curtailed because of limited access to power. The operational expenditure also increases because the telcos are forced to use generators to keep the infrastructure running.
In addition, it is tough for them to launch innovative services when the Average Revenue Per User (ARPU) is on the lower side. Competition, not just from other service providers, but also from Over the Top (OTT) players meaning that telcos are stretched to provide services below their cost price.
Sustainable growth is only possible when the industry resolves these problems head-on. The service providers need technology solutions that can help to bring down their operational expenditure even as they enhance the operational efficiency and subscriber experience.
It is crucial to think out-of-the-box in order to address these issues. Usually, telcos adopt the traditional capital-intensive and hardware-centric model to set up the network. While this strategy is good for the urban and developed areas, it is not right for developing countries since they need to keep their expenses under control.
The network architecture and design have to be kept with the realities of the developing nations. So the strategy of replicating the urban network plan is unlikely to work in rural areas.
Fortunately, there are various technology solutions available which promise to enable Nigerian service providers to grow and sustain growth in keeping with the market realities. Automation and cloud are two technologies that are witnessing much traction in the global markets but are also apt for a developing country.
Automation enhances operational efficiency enabling the service providers to bring down their operational expenditure. Similarly, Cloud helps the telcos to enhance agility and bring down operational cost. They enable the telcos to address the twin problem of controlling their expenses and also enhancing their operational efficiency.
The use of solar and wind energy is also going to be vital for the growth of the industry since it allows the telcos to decrease their fuel consumption which is a crucial cost of running the network. A small form factor which is easy to install also comes with self-optimizing and self-healing capabilities enables the telcos to bring down the network deployment cost.
Virtualized 2G Ensures Faster And Sustainable Expansion
The concept of virtualization is going to be vital for the next phase of growth of the Nigerian telecom industry. Basically, virtualization is a software-centric model which simplifies the network by bringing down the dependence on hardware.
The concept is especially relevant in Nigeria because it allows the service providers to deploy 2G which is still applicable in the region. More than 60% of the subscribers are on 2G network in the continent, and 43% of the mobile subscribers will continue to use 2G by 2020, according to GSMA report.
Low literacy and a fundamental knowledge of ICT means that a significant chunk of the population continues to use 2G. Besides the technology can also be used in the Internet of Things and Machine to Machine communications.
In the past service providers have been reluctant to deploy 2G mainly because it is tough to upgrade from 2G to future cellular technologies.
However, this problem is resolved with virtualization. A virtualized 2G is easy to upgrade to any future technology, like 3G or 4G as the market evolves.
In fact, it doesn’t even require a visit from site engineer to carry the up-gradation. Furthermore, fewer base stations are needed to cover the same area ensuring reduced power consumption.
This essentially means that it is possible to address the present day problems even as the telcos prepare the network for the future technologies. It enables the telcos to connect the unconnected by bringing down the expenditure and consequently make it profitable for them to expand in rural and newer markets.
Virtualized 2G solution also doesn’t require any cooling or shelter adding to the savings of the telcos. It is also in keeping with the trend of agile and flexible networks of the future.
The need is now to explore innovative technologies which enable the service providers to address the present day challenges and also prepare the networks for future technologies.
Virtualized 2G technology is especially relevant for Nigeria as the telcos struggle to bring down their operational cost to maintain growth and bridge the digital divide.