GSM companies lose N20bn annually to closure of cell sites, multiple taxation

The closure of Base Transceiver Stations (BTS) resulting from issues relating to multiple taxation and vandalism costs  the Global System for Mobile (GSM) communications operators about N20 billion annually, as they have to increase expenditure to meet up with these challenges in the telecom sector.

Mr Segun Ogunsanya, Managing Director and Chief Executive Officer, Airtel Nigeria, who disclosed this, stated that revenue loss from idle or shut down BTS represents the main source of negative impact of multiple taxation and network vandalism for the industry.

He affirmed that two to three per cent of cell sites are affected by arbitrary shutdown and vandalism at any given point in time.

According to him, it is estimated that increased operating costs and lost revenue amount to about N9 billion each year to the telecom industry, or about N20 billion if most of the arbitrary fees in some key states are upheld. He, therefore, called on the government to unify taxes under one code and also bring to book vandals who deliberately destroy telecoms infrastructure.

Providing insight on the theme: ‘Nigerian Telecom Industry: Five Years Ahead,’ he noted that strong growth is expected from mobile financial services over the forecasting period and operators should ensure they are able to offer products to the large unbanked population of Nigeria, whilst growing demand for mobile apps and e-commerce will have a positive knock-on effect on mobile operators.

However, the issues of vandalism and closure of cell sites have posed a major challenge to network expansion by telecom operators who have to comply with the directives of the Nigerian Communications Council (NCC) on massive investment to further advance the sector. This has brought to the fore the need for operators to collocate and share infrastructure for improved network quality especially in the remotest part of the country.