Telecom · May 2026 · 10 min read
Auditing the 5G business case: what the deterministic NPV hides
Every 5G capex committee we have sat in over the last eighteen months has been shown a deterministic NPV. Every one of those numbers has moved materially once the underlying drivers were re-expressed as distributions instead of point estimates.
The argument
A 5G business case in Nigeria, Ghana or Côte d'Ivoire is a bet on at least four correlated risks: local-currency depreciation against dollar-denominated equipment, spectrum-fee renegotiation, tower-lease escalation, and an ARPU curve that has never yet held in the region. Modelling any of these as a fixed line is not a simplification; it is a mispricing. A joint Monte Carlo across the four typically halves the base-case NPV and produces a downside that is negative on the current capex envelope.
What we see in the field
In an illustrative Tier-1 audit, the deterministic case shows a healthy NPV. Re-run as a Monte Carlo with the local-currency path calibrated to a long window of central-bank data, the probability-weighted NPV falls substantially and the downside scenario turns negative. The majority of the downside typically sits in FX and spectrum-fee variance — two lines the original paper had left flat.
What it changes
For CFOs, the deterministic NPV is no longer a defensible artefact in front of a modern audit committee. For lenders, the point number is the beginning of diligence, not the end of it. The board conversation that matters is the one about the shape of the distribution.
Where to start
Before the next capex commitment above a material threshold, ask for the downside, base and downside NPV alongside the base case. If the model cannot produce them, the case is not yet ready for the board.
