The Co-founder and Interim Chief Executive Officer of IHS Nigeria, Mohamad Darwish, speaks toOZIOMA UBABUKOH about the challenges and prospects of alternative energy, among other issues
Two issues stand out in alternative energy: cost and technology. Now that costs are falling, without domesticating the technology, do you think Nigeria will be able to optimise developments in the sector?
Yes, we strongly believe that the rollout of new innovative energy solutions will come with time. We know that the increased incorporation of alternative energy is key for many multinationals operating throughout Nigeria and that green energy implementation is a priority for the new Minister of Power. As aforementioned, this is also why we commissioned the Economist Intelligence Unit to study the impact of renewable energy in Africa and how green energy solutions could help solve Africa’s power problems.
What in your view are the alternative sources of energy Nigeria should focus more on to boost electricity supply in the country?
Nigeria’s electricity challenges are well documented. For instance, it is estimated that only approximately 18 per cent of all working connections in Nigeria have a reliable electricity supply. With the national grid in the country largely unreliable, Nigerians generally generate their own electricity for homes and businesses with expensively maintained gasoline or diesel-powered generators. These energy challenges are well known to the Nigerian government which has already spent approximately $13.5bn over the last 16 years to try to solve the problem.
In terms of potential alternative energy solutions to boost electricity supply in Nigeria, if we take the example of IHS Towers, the largest mobile telecoms infrastructure provider in Africa, Europe and the Middle East, providing a reliable power supply across our Nigerian operation is challenging. High dependence on diesel power coupled with erratic electricity grids impedes our ability to power our sites. To mitigate these challenges, we have invested over $500m in solar power across our sites throughout the country. This is a testament to our confidence in decreasing our diesel consumption, which will be supported by improved grid infrastructure.
Our ambition is to provide off-grid, hybrid energy solutions, which includes generating energy from a combination of DC Diesel Generators, batteries and solar technology.
What do you see as the challenges hampering investment in alternative sources of energy by private investors?
Numerous officials have confirmed that the development of renewable energy in Nigeria is a priority. Moreover, increasingly, foreign investors and multinational corporations are looking to Nigeria as a place to bring in expertise and Foreign Direct Investment from countries that already have a more developed alternative energy sector. Nigeria is seen as a big market and that is why I have no doubt that we will see increased investment and development in the renewable energy sector in Nigeria in the future.
Nigeria is currently facing severe energy shortages and new energy fields are not coming on stream as quickly as they are needed. How will the country bridge the huge gap in energy demand and supply?
As previously mentioned, from IHS’s perspective, we have adopted a combination of off-grid renewable energy solutions across our Nigerian tower portfolio, which include solar, batteries and DCDGs. Similar technology could potentially also be adopted and implemented by other sectors in the country to address their current energy requirements..
How best could government and the private sector players minimise the impact of the menace of vandals on telecoms infrastructure?
We are working closely with the Nigerian Communications Commission, the Association of Licensed Telecommunications Operators of Nigeria, the local police authorities and the Minister of Communications to ensure that all Nigerians understand the importance of keeping telecoms tower site access unrestricted. We sponsored a workshop on this topic in May, which was followed by an eight-week television and radio advertising campaign to further raise awareness about the importance of keeping telecoms tower sites safe in all parts of the country.
We hire local security guards, where possible, and work closely with our local communities to ensure all understand how important it is for telecoms tower sites to remain fully operational and how this will result in stronger network uptimes and a reduction in dropped calls. Finally, we believe that the government’s focus on creating a unified tax regime for all states will ensure that the tower ecosystem begins to be standardised throughout the country and should clarify any uncertainties that currently exist within the sector.
If the need arises to build more base stations, do you not think that the IHS would lack the experience to get all regulatory approvals and undertaking actual development?
It is important to remember that we started as a tower building company and know the nitty-gritty of the building process. The IHS employs close to 40,000 people directly and indirectly through our exclusive sub-contractors, and over 95 per cent of our employees are local. Our engineers’ local knowledge and technological expertise ensure that our towers are fit for purpose on day one and every day thereafter.
Therefore, our technological expertise and understanding of the wider mobile market are sufficient. We build and maintain towers based on a deep understanding of the environment they function in and the technology of the networks around them. We hope that all regulatory agencies understand that the rollout of new telecoms tower sites results in the continued infrastructure development of Nigeria.
Now that you have control of the base stations of telecoms operators, what will be the impact of this arrangement on quality of service?
The towers are now being managed by independent tower operating companies like us who can focus 100 per cent of their energy on maintaining increased quality of service and can commit large sums of funding to innovative green energy power solutions, which will result in better network availability. As mentioned, we have also invested over $70m in our NOCs, which monitor the performance of each tower and the amount of energy used 24/7 while keeping an eye on any equipment failure that may occur.
In the wake of the National Environmental Standards and Regulations Enforcement Agency shutting base stations for not adhering to its specifications, how do stakeholders like you intend to manage environmental issues?
Our business model is inherently environmentally friendly as our objective is to entice mobile network operators to share sites wherever possible and we are supporters of regulation that will improve the environment. We spend a lot of time acquiring necessary environmental permits before building new towers and ensure we remain within all operating guidelines throughout the tower site lifespan. We run regular emission tests and upgrade our sites frequently to ensure we keep noise and pollution to a minimum.
What prompted IHS to look towards the Nigerian market in terms of alternative energy sources?
In an increasingly competitive market, mobile network operators need superior products, attractive pricing and compelling marketing campaigns. Above all, however, they need efficient and reliable networks and the trust of the public if they are to stay in business. At the same time, they must manage the costs and logistics of operating towers. This means innovating, reducing costs and securing energy supply.
Throughout emerging markets, the telecommunications industry faces two major energy challenges. First, there is heavy reliance on diesel consumption, which has significant logistical implications and secondly unreliable electricity grids to power their towers. High dependence on diesel power coupled with erratic electricity grids impedes our ability to power our sites. As mentioned, to mitigate these challenges, we have invested over $500m in solar power across our sites. This is a testament to our confidence in decreasing our diesel consumption, which will be supported by improved grid infrastructure. Inherently renewable energy is good for us in terms of enhancing tower uptime for our customers, reducing operating costs, and decreasing our carbon emissions.
Through our various innovative renewable energy initiatives and diesel reduction strategies, we remain the industry leader in the switch to renewable energy, while still guaranteeing network uptime above 99 per cent across all our key markets. We have invested for the long term and strengthened our customer’s ability to increase network uptime. In addition to our renewable-energy solutions, we have state-of-the-art Network Operating Centres in Nigeria (Lagos and Abuja) and one in each of the other markets in which we operate. They are the nucleus of our network management and promote efficient operations. The key benefit is the automation and early warning system that can almost solve a problem before it has been realised. Again, there is an upfront investment cost but the rewards are clear and we are able to maintain market leading site uptimes.
What is the value of IHS’ acquisition of Helios Towers, and in what specific ways will Nigerians benefit from this, given the harsh economic realities?
We are unable to comment on the transaction value but can disclose that the portfolio includes 1,211 towers. The transaction is the first mobile infrastructure company consolidation in Africa and will allow efforts to be combined to deliver better solutions to customers alongside continued investment in infrastructure upgrades. This deal confirms our market-leading position in Nigeria as we work with the other telcos to build the remaining approximately 50,000 towers needed in the country. This is the first towerco consolidation in Africa and similar to our strategy in 2015, we have a focus on consolidation and growth in our key markets.
From a customer benefit perspective, with a population of nearly 180 million people, increasing smartphone penetration and limited fixed line infrastructure, Nigeria’s vibrant wireless industry is poised for a sustained period of network investment and growth. This transaction provides IHS the opportunity to optimise a larger portfolio through innovative green energy solutions and delivery of market leading quality of service. IHS will work to roll out its renewable energy solutions and diesel reduction initiatives while maintaining unparalleled network uptime. The transaction is also significant in that it combines Africa’s two original tower companies and will enable us to strengthen our service offering to our customers while focusing on their needs.
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