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Effects of Fuel Shortage in Nigeria to Africa’s Telco Sector

Nigeria’s telco sector is one of the sectors that are said to be affected by the fuel shortage in Nigeria. Nigeria is the largest African fuel supplier. The fact will remain that the lack of fuel will lead to lack of adequate power supply in most parts of Africa. This means that the African TELCOs sector will go for the alternative power supply which is the use of a generator. However, for Nigerian telcos, even that continues to give a challenge to offering quality services. Power provided by both the National electricity grid and generators are also problems.

Parallel Wireless, a telecom company, has the solutions to these problems. Given the fact that Nigeria has a big economy, the telecoms company has solutions to help Nigeria’s Telcos provide value to this market. One of the most critical issues faced by the African service providers is that of high incidences of power shortages, which leads to the increase in the cost of conducting business as the telcos are forced to use generators to keep the network up and running. The other one is the low Average Revenue Per User (ARPU) means that the telcos find it hard to account for the high investment to expand and modernize the network.

Another problem faced by Nigeria’s telcos is the low profit they obtain per user. With companies like Whatsapp, Skype, Facebook offering the same services many of these telcos offers, the revenue to be generated by these Telcos, who also provide data for the various applications to work, reduce with a bigger margin. These factors limit the expansion of mobile networks in the rural areas and ensure that the population is unable to gain the benefits of broadband.

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Written by Denis Opudo

Am an engineer who's a tech blogger, hit me up on dennis@techinafrica.com and we base our discussion on technology in Africa and the rest of the world.
Denis the Tech guru

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