Nigeria’s biggest telecommunications companies, the MTN Group and Airtel Africa, on Wednesday struck a deal to share mobile phone network infrastructure in Nigeria and Uganda, a major breakthrough in the companies’ aim to enhance internet penetration and lower costs.
The firms said that the deal will see them save on investments while still increasing service coverage.
The framework is similar to recent deals in the oil industry, wherein oil companies share rigs, rather than embark on costly agreements to enter solo contracts with rig owners, leading to high cost of production of the commodity.
Mobile operators in Africa are seeing sustained demand for digital and financial services, but building and maintaining networks are expensive, especially for fast 5G connections.
MTN Group Chief Executive, Ralph Mupita, in a statement noted that there are opportunities within regulatory frameworks for sharing resources to drive higher (operational) efficiencies and improve returns.
On the other hand, Airtel Africa Chief Executive Officer, Sunil Taldar, said the agreement would avoid duplication of expensive infrastructure.
Sharing infrastructure allows operators to extend their network coverage more quickly, especially in rural or less densely-populated areas where it might not be economically viable to build separate networks.
Following the conclusion of agreements in Uganda and Nigeria, MTN and Airtel Africa will explore various opportunities in other markets, including Congo-Brazzaville, Rwanda and Zambia, the companies said.
Among the deals under consideration are radio access network sharing, the largest portion of the cost in network deployment and operation; commercial and technical agreements for fibre infrastructure sharing; and, if necessary, the construction of fibre networks, they added.
“Driven to extend digital and financial inclusion across Africa, MTN Group and Airtel Africa have entered into agreements to share network infrastructure in Uganda and Nigeria, while ensuring compliance with local regulatory and statutory requirements.
“These sharing agreements target improved network cost efficiencies, expanded coverage and the provision of enhanced mobile services to millions of customers, particularly those in remote and rural areas who do not yet fully enjoy the benefits of a modern connected life,” part of the statement stressed.
Mupita said operators on the continent were seeing sustained demand for data services, adding that MTN continues to be driven by the vision of delivering digital solutions that drive Africa’s progress.
“As MTN, we are driven by the vision of delivering digital solutions that drive Africa’s progress. We continue to see strong structural demand for digital and financial services across our markets. To meet this demand, we continue to invest in coverage and capacity to ensure high-quality connectivity for our customers.
“That said, there are opportunities within regulatory frameworks for sharing resources to drive higher efficiencies and improve returns,” Mupita added.
Commenting, Airtel Africa Chief Executive Officer, Sunil Taldar said: “As we compete fiercely in the market on the strength of our brand, services and our offerings we are building common infrastructure, with in the permissible regulatory framework, to provide a more robust and extensive digital highway to drive digital and financial inclusion at the same time avoiding duplication of expensive infrastructure to drive operational efficiencies and benefits for our customers”.
According to the companies, the initiative is part of a growing global trend toward network sharing. By collaborating, telecoms operators, both forms said, can explore innovative and pro-competitive solutions to improve service quality while managing costs more effectively.
The sharing of infrastructure has the potential to enable the delivery of world-class, reliable mobile services to more and more customers across Africa, they noted.
Following the conclusion of agreements in Uganda and Nigeria, MTN and Airtel Africa said they are exploring various opportunities in other markets, including Congo-Brazzaville, Rwanda and Zambia.
“MTN Group and Airtel Africa are dedicated to working with other mobile operators within the countries in which they have a presence to achieve the advantages of network sharing.
“Throughout this process, the parties will continue to function as independent market entities and will compete freely in shared markets. This engagement does not preclude the parties from collaborating with other operators in any respective market,” the statement added.
Emmanuel Addeh
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