Research Analyst at PAC Research, Chinonso Nweke, says growing network adoption will encourage telecommunications companies to invest further in Nigeria’s 5G expansion and digital infrastructure.
Speaking during an interview with ARISE NEWS on Tuesday, Nweke said the telecommunications business is largely volume-driven, with operators more willing to invest in 5G and other network infrastructure as more consumers use their networks.
“Telco business is a volume-driven business. The more people are on the network, the more the telcos are willing to invest.”
Nweke said the high cost of 5G-enabled devices remains a major barrier to wider adoption, particularly for Nigerians with limited purchasing power.
“So, one of the major barriers is the cost of 5G-enabled devices. For a lot of Nigerians who have limited purchasing power, the cost of getting these devices can be a challenge.”
He said the cost of 5G-enabled devices could make adoption difficult for low-income workers, who may need months of savings to afford even second-hand smartphones.
“A worker earning about N70,000 could require several months of savings to afford a second-hand 5G-enabled phone.”
Nweke, however, said low earning capacity could create uncertainty for telecommunications companies, as operators would need confidence that 5G investments would generate sufficient returns.
“If people don’t have the earning capacity to pay for these services, the telcos will also be hesitant to invest because they need to be sure that the investment will generate returns.”
He said this uncertainty could discourage telecommunications companies from expanding 5G services across the country.
“These things discourage them from expanding the 5G across the country.”
On 5G adoption, Nweke said greater awareness of the benefits and opportunities associated with the technology could encourage more Nigerians to embrace it.
“If users are sensitized on these opportunities, they will get onboarded.”
He said Nigerians often embrace new technology through peer-to-peer experiences, as seeing its benefits from friends and family can encourage wider adoption.
“People tend to respond positively to peer-to-peer experiences. When they see the benefits through their friends and family, they are more likely to adopt the technology.”
Nweke said telecommunications companies would continue to invest when they could see a clear path to profitability, stressing that returns on investment remain a major consideration for businesses.
“Profit is a big motivator of every business.”
He said consumers must understand the benefits of 5G and become active users to enable telecommunications companies to recover their investments and continue expanding their networks.
“Consumers need to understand the benefits of 5G and become active users because telcos need to recover their investments and continue expanding their networks.”
Nweke also identified vandalism of telecommunications infrastructure as another major challenge to connectivity and the expansion of 5G services.
“Vandalism of telecommunications infrastructure is another major challenge because when infrastructure is damaged, it affects connectivity and limits the ability of telcos to expand their networks.”
He said damage to fibre infrastructure could disrupt businesses and result in financial losses.
“So that means businesses, there’ll be disruption. And also there’ll be financial losses. So we need those fibre to be very, very functional.”
Nweke called for stronger protection of telecommunications infrastructure, saying the assets must remain operational and secure to support reliable connectivity.
“When they hear about this vandalism, they are discouraged. So we need those infrastructures to be up and running and secure, precisely.”
On the role of government in expanding 5G and improving connectivity, Nweke said policy continuity would be important for strengthening investor confidence.
“Investors need to have confidence that the policies today will still be there tomorrow. So, policy continuity is very important for them to make those long-term investments.”
He said businesses need assurance that policies introduced by one administration will be sustained by subsequent governments.
“So there needs to be continuity in government policies, and that drives investors’ confidence.”
Nweke also said protecting telecommunications infrastructure from vandalism would encourage more investment in the sector.
“Everybody will be willing to put in their money.”
He further called for lower interest rates, saying high financing costs could make it more difficult for businesses to fund major telecommunications investments.
“Government can help in reducing our interest rates.”
On the outlook for 5G adoption, Nweke said the technology is gaining ground in Nigeria, although adoption remains slower than he had anticipated.
“I think 5G is gaining ground, but the adoption is not as fast as I would have expected.”
He said 5G penetration rose from 3.94 percent in January to 4.49 percent in May, describing the increase as gradual.
“Yes, the increase has been gradual. Over the next five to 10 years, it will be more than this, but not at the pace I anticipated.”
He also warned that continued reliance on older technologies could leave some Nigerians excluded from the opportunities associated with advanced digital services.
“They are far more disenfranchised, they’re far more cut off from the possibilities and the potentials they can get from 5G.”
Nweke said wider network adoption, stronger infrastructure, supportive government policies and increased investment would be critical to accelerating 5G expansion and maximising the benefits of digital connectivity in Nigeria.
“These are the things we need to really drive 5G expansion and ensure that Nigerians can fully benefit from digital connectivity.”
Goodness Anunobi
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