Due to the low purchasing power of their customers as a result of inflation, Telecommunication companies may delay the commercial rollout of fifth-generation technology.
In a panel session during The AfricaNXT Conference 2022, the Nigerian Communications Commission revealed that Nigerians might use alternate broadband devices or get new devices to access 5G services.
The NCC team that spoke during a panel session said most devices present in the nation do not have 5G capabilities. They added that there would be one billion 5G devices in the world in two years.
According to GSMA, the industry organisation that represents the global interests of mobile network operators, most people in Nigeria and other sub-Saharan African countries spend 100 per cent of their income on entry-level Internet-enabled handsets.
In its ‘Mobility Report: November 2021, Ericsson disclosed that 5G subscriptions would hit 660 million globally in 2021. It added that counties like Nigeria would begin to have appreciable 5G subscriptions by 2022.
Experts have said rising inflation may hamper the commercial rollout of 5G services as consumers may not have enough disposable income to buy 5G devices.
Telcos were concerned about recouping their investment cost on 5G. According to the source, one of the companies that own the licence for 5G in the nation is planning to prioritise rollout in industrial areas.
According to a professor of Economics and Public Policy at the University of Uyo, Akpan Ekpo, people who want to use 5G will need to spend more.
“For people who want to use 5G, they will spend more. However, not everyone will want to use 5G, which is a problem. If the macroeconomic condition of the nation improves, people will want to use 5G. For now, 5G is for people who can afford it, maybe the elites.
“This means that a lot of people are excluded from technology. The operators must have done their research to know how many people must use 5G for them to be able to make good returns.
“If few people are using 5G, they may not recoup their returns, and this becomes a problem. So, I suspect that if they feel that they may not recoup their returns, they may bear part of the cost. Companies make what we call maximum profit. They may make a normal profit.”
The President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, said the rollout for 5G would be shaky as a result of low disposable income.
He said, “Things are getting inflated. Inflation is now getting high. Many things are getting more expensive, costlier than in the last one, two months.
“Low purchasing power will affect the rollout, and the teledensity will obviously decrease because people will not be able to readily afford phones that will be used to deploy the 5G technology.”
