AfDB Supports Mobile Telecom in Nigeria :US$ 30 million to finance Helios Shared Telecom Infrastructure Project
Tunis, 2 September 2009 - The Board of Directors of the African Development Bank Group has approved a US$ 30 million loan to finance the Helios Shared Telecom Infrastructure Project in Nigeria.
The project consists of a countrywide expansion of a shared telecommunication infrastructure network. The provision of shared facilities by Helios Towers Nigeria (HTN) provides the opportunity for wireless telecommunication operators to roll out their network for a larger geographical coverage, while at the same time reducing their capital investments and operating costs.
The project is in line with priorities identified in the Nigeria Country Strategy Paper (CSP), namely its second pillar aimed at stimulating non-oil growth through enhanced infrastructure and agricultural/rural development. In particular, by expanding the shared telecommunications network in Nigeria, the project will contribute to improving the business climate and stimulating non-oil growth and job creation, through private sector development.
This project is also in line with the Bank’s 2008-2010 ICT Strategy, which sets out regional and national infrastructure as the first focal area. The ICT strategy paper highlights the need for investments across the whole supply chain, including: international connectivity to the rest of the world, regional backhaul links that interconnect countries, national backbones that extend access beyond major cities, and last-mile connectivity to rural and underserved communities. The Project also aligns to the Bank’s 2008-2012 Medium-Term Strategy, which emphasizes the need for a stronger sectoral emphasis on infrastructure and private sector development, and for deeper engagement in middle-income countries. It also highlights the need for the Bank to continue to strengthen its key partnerships with other DFIs.
By building ICT infrastructure, the Project addresses one of the Bank’s key private sector objectives, which is to enhance the environment for private businesses to thrive. The business model supported by the Project allows private telecoms operators to develop their own network at a lower cost, thereby enhancing the service they offer to end-users, both domestic and commercial.
By developing ICT infrastructure and improving the quality of mobile communications, the Project will help to reduce the cost of doing business in Nigeria, especially for small businesses based outside the main urban centers. It is recognized that the use of mobile phones in Africa has widened markets, created better information flow, lowered transaction costs, and substituted for costly transportation. People in remote areas, where other forms of communication (such as postal systems, roads and fixed-line phones) are often poor, may be prepared to spend relatively large amounts of their revenue on telecommunications because it helps them to save money in other areas. HTN towers are also made available on demand to other businesses, such as oil companies and TV/radio companies, to deploy their transmission equipment.
The Project responds to a strong demand by Nigerian telecom operators to outsource site construction and management, to allow them to focus their resources on extending coverage and enhancing the quality of their services. Tower-sharing also minimizes the negative environmental impact of an over-proliferation of unsightly telecom infrastructure in the country. Finally the success of the project will have a demonstration effect both nationally and in neighboring countries, by encouraging other telecom operators to adopt similar models and benefit from economies of scale.