Massive data usage, calls, others to fetch Nigerian telcos N2.9trn

By Omobayo Azeez

• As broadband becomes fastest-growing at 78.78m
• Total internet subscriptions hits 143.3m

By the end of the year, telecommunications companies in Nigeria offering internet and voice services among others will be mulling revenues of as much as N2.9 trillion, the latest industry forecast has stated.

This is as the broadband segment of the country’s telecoms industry evidently rose to become the fastest growing and outpacing rate of subscriptions to other services in the sector.

According to the latest industry statistics by the Nigerian Communications Commission (NCC), the number of active mobile-broadband subscribers rose sharply by 17 per cent year-on-year (YoY) to 143.3 million as at 30 June 2020 from the same period of 2019.

MTN with over 60 million subscribers or 42.3 per cent share of the total subscription leads the mobile broadband market, while Glo and Airtel with 26.5 per cent and 26.2 per cent shares respectively occupy the second and third positions.

The fourth-largest Mobile Network Operator (MNO), 9mobile, is the smallest of the four operators with just 4.9 per cent of the GSM internet subscriber base.

Generally, however, subscriptions to 3G and 4G LTE, which are categorized as broadband services by the NCC standard, have grown to 78.78 million, equivalent to 41.27 per cent penetration at the end of H1, 2020.

According to Agusto & Co, Nigeria’s foremost research house and rating institution which made the latest predictions, Nigeria’s telecom industry revenue is expected to maintain an upward trajectory in 2020, increasing by at least 15 per cent to around ₦2.9 trillion.

This is coming on the back of the exponential voice and data traffic witnessed in April 2020 during the five-week-long restrictions on movement to curb the spread of the pandemic.

Agusto & Co’s 2020 Telecommunications Industry Report was released recently, and it is the most current and comprehensive report on voice, data, auxiliary services as well as the impact of COVID-19 pandemic on the quality and affordability of telecom service in Nigeria.

According to the report, the entire telecoms market in Nigeria was estimated in the region of ₦2.5 trillion in 2019 with MTN accounting for nearly half of the industry’s revenue in the same period.

Coming out of the pandemic, millions of users in Nigeria are more connected, better educated, and familiar with digital tools. In the same vein, network operators have gained first-hand experience in dynamic network traffic management, while businesses and their telco partners have a better understanding of the challenges of home-working, according to the report.

“While the advent of the COVID-19 has somewhat fast-tracked Nigeria’s digitisation, particularly at the user experience level, the operational issues that have held back the country’s broadband penetration persist.

“Operators are grappling with the stifling effect of high business costs occasioned by ballooning interest expense on borrowings and a burdensome tax regime, while the long delays in processing right of way permits and their arbitrary costing models are the main reasons for the prohibitive cost of leasing transmission infrastructure in the country.

“This is in addition to the incessant cost of repairing damaged fibre infrastructure as a result of cable theft or damage during road construction, and insufficient electricity supply requiring operators to invest heavily in alternative energy projects to power base transceiver stations (BTS),” the report noted.

Agusto & Co further noted the network congestion witnessed during the COVID-19 lockdown owing to the spike in data traffic brought to the fore the inadequacies in the country’s communications infrastructures.

While discussions around additional spectrum for network operators and the declaration of communications infrastructure as critical national assets continue to dominate debate within the industry, the rating company believes addressing some of these operational challenges will improve the accessibility and affordability of telecom services in Nigeria and ensure sustainable growth for key players.