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Nigeria’s Telecom Sector: A Beacon of Hope amidst Challenges

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By Johnson Ademola

In the midst of political tumult and upheaval, there is a tale of remarkable progress emerging from Nigeria’s telecom landscape. It’s a story that should be celebrated, for it signifies a beacon of hope in a time of widespread despair.

At the helm of this transformative journey is Umar Garba Danbatta, a professor of telecommunications engineering, and the Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC).

The numbers tell a compelling story. Since the advent of GSM and the expansion of broadband infrastructure, Nigeria’s telecom sector has attracted a staggering $77 billion in investment. What’s even more impressive is that $39 billion of this sum flowed into the sector during Danbatta’s eight-year tenure as the regulator.

Moreover, the sector now contributes a substantial 16 percent to the nation’s Gross Domestic Product (GDP), a remarkable increase from the 8 percent it contributed in 2015 when Danbatta assumed the role of EVC.

This meteoric rise in the telecom sector reflects the surging demand for telecommunications services across various sectors of the Nigerian economy, from agriculture and commerce to education. It’s a testament to the resilience and adaptability of the industry, which weathered global challenges like the COVID-19 pandemic and economic recessions while maintaining its bullish stance.

Danbatta credits this remarkable journey to “thorough sustained regulatory excellence and operational efficiency” by the NCC. Indeed, telecom has become a shining example of local content development, with significant growth in digital innovation, human capital development, and skills acquisition among Nigeria’s youth. This has enabled them to compete on a global stage, earning recognition from multinationals and international agencies alike.

In financial terms, the telecom sector continues to make a significant contribution to the national economy. A report from the National Bureau of Statistics (NBS) indicates that telecom and information services added a substantial N2.508 trillion to Nigeria’s GDP in the first quarter of 2023, representing 14.13 percent.

One of the sector’s forward-looking strategies is the adoption of 5G technology, positioning Nigeria as one of the early adopters in the global digital economy. This bold move paid off handsomely, generating $820.8 million for the federal government from 5G spectrum license fees paid by operators like MTN, MAFAB, and Airtel.

But that’s not all. The recent launch of Starlinks broadband services, a satellite-based wireless broadband offering with nationwide coverage potential, is another feather in Danbatta’s cap. This service, made possible by the NCC’s issuance of a license to Elon Musk-owned SpaceX, is already available in various parts of the country.

Under Danbatta’s leadership, the number of telephone users in Nigeria has surged to 218.9 million, while internet subscribers and broadband users now stand at 159.5 million and 88.7 million, respectively.

These figures, coupled with the creation of jobs, both direct and auxiliary, during a period when other sectors were shrinking, have earned Nigeria the respect of international bodies like the International Telecommunication Union (ITU).

The telecom sector’s growth, as evidenced by its consistent 16 percent contribution to GDP, demonstrates its resilience in the face of socio-economic and political challenges.

It prompts us to ask how such growth was achieved in an environment plagued by erratic electricity supply, ethnic and religious divides, Right of Way (RoW) disputes, fiber cuts, high capital requirements, multiple taxations, infrastructure vandalism, and regulatory hurdles.

The answer lies in Danbatta’s unwavering commitment to innovation and active engagement with stakeholders, all for the betterment of the sector and the nation’s economy at large.

Nigeria can draw inspiration from the telecom sector’s success story. If the goal is to elevate Nigeria into the ranks of the world’s top 20 economies, the federal government must replicate the triumphs of the telecom sector in other industries. Danbatta’s leadership has shown that with vision and dedication, Nigeria can indeed achieve greatness.

In the grand scheme of economic transformation, the telecom sector’s journey under Danbatta’s stewardship has been nothing short of awe-inspiring. Beyond its undeniable contributions to the GDP and job creation, it has paved the way for profound advancements in entertainment, banking, agriculture, e-commerce, and various primary sector frontiers.

The steady rise in quarterly GDP contribution, now at a phenomenal 16 percent, means that the telecom sector has successfully insulated itself from the socio-economic and political vagaries that have stymied growth in other sectors.

So, how did Danbatta and other stakeholders in the telecom industry achieve this remarkable feat? It’s a question that warrants deeper exploration. How did telecom transition from mere kilobytes to terabytes in growth, market size, and innovativeness in an environment where electricity supply remains horrendously erratic?

How did it rise above the divisive forces of ethnicity and religious affiliations that have plagued the nation’s public discourse and rendered it ineffective? The telecom sector’s resilience in the face of challenges like Right of Way (RoW) disputes, fiber cuts, high capital requirements, multiple taxations, infrastructure vandalism, and complex regulations deserves a closer look.

The answers to these questions lie in the unwavering commitment of Danbatta and his team to finding innovative solutions and actively engaging stakeholders for the greater good of the sector and the larger economy. They have demonstrated that a robust regulatory environment, coupled with visionary leadership, can lead to extraordinary growth and prosperity.

Nigeria now stands at a pivotal crossroads. The success of the telecom sector serves as a blueprint for what can be achieved in other industries. If the vision is to leapfrog Nigeria into the exclusive club of the world’s top 20 economies, then the federal government must replicate the summer success recorded in telecom across various sectors.

Danbatta’s leadership has shown that with dedication, innovation, and visionary leadership, Nigeria can indeed become a global economic powerhouse.

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Telecom

Report Says 71 Percent of Nigerians Don’t Have Access to Regular Internet

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A recent report by the Groupe Special Mobile Association (GSMA) revealed that a significant 71% of Nigerians do not have regular access to mobile internet.

Report Says 71 Percent of Nigerians Don’t Have Access to Regular Internet

“While 29 per cent of Nigerians are regularly using mobile internet, there remains untapped potential; 71 per cent are not accessing these services regularly. An improved policy environment has the potential to help the industry boost coverage and adoption, resulting in 15 million additional internet users by 2028.

However, the sector faces challenges to infrastructure deployment,” the report stated.

The details of the study were disclosed during the report’s launch in Abuja, highlighting a critical gap in digital connectivity amidst ongoing discussions about possible tariff increases by Nigerian telecom operators.

The telecom industry is currently advocating for an increase in tariffs to counter various operational challenges. However, the government is pushing for alternative solutions rather than price hikes.

The GSMA report underscored the challenges hindering the expansion of telecom coverage, which include cumbersome and costly rights-of-way acquisition processes and a complex tax environment. These factors collectively make it difficult for the industry to sustain investment levels.

Despite these hurdles, the report optimistically noted that Nigeria could add 15 million internet users by 2028 with appropriate policy adjustments. It emphasized that achieving universal access to digital connectivity hinges on a wider digital transformation of the Nigerian economy.

The report details the sector’s challenges, stating that “An improved policy environment has the potential to help the industry boost coverage and adoption, resulting in 15 million additional internet users by 2028. However, the sector faces challenges to infrastructure deployment.”

The report also identified key obstacles, such as the rigorous process of securing rights of way and a layered tax regime, which together increase operational costs and stymie sustainable investments. Added financial pressures from rising fuel prices and increased governmental fees further strain telecom operators’ ability to maintain healthy investment flows.

The GSMA report recommended several policy measures to foster a more enabling economic and regulatory environment for the mobile industry.

These include establishing a legal framework to protect critical national infrastructure, simplifying rights-of-way issuance, reducing the tax burden, and cultivating a regulatory climate conducive to robust investment.

“Future policies should be geared towards reducing the cost and complexity of infrastructure rollout to encourage investment and boost the adoption of mobile broadband,” the report advised.

It further  highlighted  the far-reaching implications of such policy enhancements, noting, “The impact of such actions would go far beyond mobile, driving productivity gains across the economy and creating millions of new jobs in Nigeria.”

 

 


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Telecom

MTN Group Weighs Down by Nigerian Operations

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MTN Group (MTNJ.J), Africa’s biggest telecoms operator, reported on Tuesday an 18.8 per cent fall in first-quarter service revenue, weighed down by the performance of MTN Nigeria

MTN Group Weighs Down by Nigerian Operations

MTN, with 288 million subscribers in 18 markets across Africa, said its reported group service revenue fell to 42.9 billion rand ($2.34 billion) in the quarter ended March 31, from 52.8 billion rand in the same quarter last year.

In constant currency, service revenue, which excludes device and SIM card revenue, rose by 11.1%.

MTN’s service revenue from South Africa surpassed that of Nigeria, its biggest market by revenue, growing marginally by 3% to 10.4 billion rand, while Nigeria tumbled by 52.8% to 10.2 billion rand.

“The macro environment in the first quarter of 2024 remained challenging with ongoing high inflation as well as local currency devaluations in some of our key markets,” Ralph Mupita, group president and CEO said in a statement.

Mupita also cited global geopolitical tensions as a factor impacting the operator’s performance, including the ongoing civil war in Sudan, which severely affected network availability and revenue generation in that business.

MTN was also impacted by subsea cable cuts that resulted in downtime.

Overall reported group earnings before interest, tax, depreciation and amortization (EBITDA) fell by 28.7% to 17.2 billion rand and rose by 3.9% in constant currency.

Reported EBITDA margin declined by 5.8 percentage points to 37.9% due to rising costs and currency depreciation mainly in Nigeria.

The group revised down its anticipated capital expenditure (excluding leases) deployment for 2024 to about 28 billion rand to 33 billion rand from a target of 35 billion rand to 39 billion rand, largely due to a reduction in expected spending by MTN Nigeria.

 


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Airtel Excites Business Owners with Unlimited Speed Plan

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Telecommunications network, Airtel Nigeria has introduced a groundbreaking new service for business owners called the Enterprise Business Broadband (EBB) Speed Based Plans 3.0. This specially designed plan offers unparalleled connectivity and flexibility with unlimited monthly plans.

Tailored to meet the diverse needs of enterprises, the new EBB plans feature unlimited internet connectivity options, providing the opportunity to without data limitations. Customers also get a chance to select from three dynamic options, from as low as N20, 000 to N60, 000.

The N20, 000 monthly subscription delivers internet speeds of up to 20Mbps, the N35, 000 subscription offers up to 40 Mbps, and, with the N50, 000 monthly subscription users can experience ultimate reliability and speeds of up to 60Mbps, which is perfect for large organizations with high bandwidth requirements.

Speaking on the new unlimited plan, Chief Commercial Officer, Airtel Nigeria, Femi Oshinlaja emphasized the transformative impact of the new unlimited plan.

“We have seen the early adopters of the Speed Based Plans 3.0 express their satisfaction after using this service and we are confident to say that the uninterrupted internet service is a game-changer for business owners.

“We are committed to continuously providing innovative solutions that empower businesses to thrive in the digital landscape, ensuring unparalleled connectivity and reliability for our valued customers,” he said.

According to Airtel, customers get a complimentary router upon purchase. The speed plan also allows customers to have the flexibility to set data usage limits and control access to specific websites on the router, promoting responsible internet usage.

 


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