Nigeria’s satellite firm Nig-Comsat loses $22 billion

Posted by News Express | 18 February 2022 | 647 times

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…as FG budgets N2.5bn for new facility

Nigeria’s Communications Satellite company, Nig- ComSat, may have lost not less than $22 billion in revenue over the last 11 years, New Telegraph has learnt. This came as telecommunications operators in the country shunned the service of the local service provider. Industry experts estimate that telecommunications companies in Nigeria spend over $2 billion every year in getting satellite services from foreign service providers.

In the last 11 years of Nig- ComSat 1-R operation, the company could have earned more than $22 billion if all the operators were patronising it. However, the telcos and even some government establishments source their satellite services from outside the country. The telecom operators have cited the high cost of access as one reason the satellite is being shunned. According to them, the cost of obtaining services from the nation’s satellite is far higher than what they get from foreign facilities.

In spite of this, the Federal Government is planning to acquire a new satellite this year. Already, a sum of N2.5 billion has been allocated for the acquisition in the approved 2022 budget. The country’s current satellite, NigComSat-1R, which was launched in 2011, has a life span of 15 years, meaning that it has four years left, even as stakeholders continue to lament the underutilisation of the multi-billion-naira facility. Before his exit in 2019, the immediate past Minister of Communications, Barrister Adebayo Shittu, had insisted that Nigeria needed two new satellites to act as a backup for the current one.

He had announced plans to approach China-ExIm Bank to secure a loan of $550 million for the purpose. This, however, met stiff resistance from stakeholders, who argued that the current satellite operated by the country had been a wasted investment as it is not profitable and being underutilised. Aside from the new satellite project, the satellite company will also this year spend N476.9 million on the provision of satellite broadband and rural connectivity, while the sum of N467 million is to be spent on the upgrade of its ground station. According to the 2022 budget, the satellite company is to draw the sum of N7.6 billion from the national purse this year.

Out of this amount, N2.8 billion, is for recurrent expenditure, covering payment of salaries and wages of the company’s staff for the year. The remaining N4.8 billion is for capital projects. Last year, the company at a stakeholders’ forum in Lagos had announced plans to acquire new satellites to replace the current NigComSat 1-R, which is expected to expire in 2026. The Managing Director and Chief Executive Officer of NigComSat, Dr. Abimbola Alale, at the forum, said: “l am pleased to inform stakeholders of our desire to acquire more satellites between now and 2025 with the NigComSat-2 (Hight Throughput Satellite) due for launch in 2023 while NigComSat-3 will be launched in 2025.” Legal Adviser and Company Secretary of NigCom- Sat, Alma Okpalefe, said the planned launch of the two satellites in 2023 and 2025 would help NIGCOMSAT meet up with its mandate to commercialise satellite resources in the country and provide quality and cheap satellite services to Nigerians. (New Telegraph: Excludes headline)

 


Source: News Express

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