Driving Digital Transformation in Telecoms Sector

At 72 years, the Chairman of Globacom, Mike Adenuga Jnr is still passionate about digital transformation in the telecoms sector, given the company’s initiatives and support for telecoms growth in Nigeria, which align with federal government’s initiative, writes Emma Okonji

Given the importance broadband in driving digital transformation in the telecoms sector and in the Nigerian economy, the federal government is investing $2 billion to expand Nigeria’s fibre optic network by laying additional 90,000 kilometres of fibre optic cable, aimed at increasing broadband penetration and digital infrastructure.  

Telecoms analysts are of the view that the federal government’s initiative to lay additional 90,000 kilometres of fibre optic cable will boost broadband penetration and telecoms contribution to GDP. They are also of the view that the current reforms taking place in the telecoms sector, such as the recent hike in the cost of telecoms tariffs for voice and data, will also improve quality of service across networks.

Chief Corporate Services and Sustainability Officer at MTN Nigeria, Tobechukwu Okigbo, had said at a telecoms forum in Lagos that the 50 per cent hike in telecoms tariff would help save the telecoms industry from sliding into inflation and that in less than three months from the date of implementation of the 50 per cent tariff hike, Nigerians would begin to experience improved quality service across networks.   

Although telecoms contribution to Gross Domestic Product (GDP), is a function of a combination of broadband subscriptions and broadband penetration, among other variables, the latest statistics on telecoms contribution to Nigeria’s GDP, released by the Nigerian Communications Commission (NCC), revealed that the telecoms sector is making significant contribution to GDP, despite the fluctuations.

According to the statistics, as at Q1 2023, telecoms contribution was 14.13 per cent, which increased to 16.06 per cent in Q2 2023, before dropping to 13.50 per cent in Q3 2023, but increased to 14 per cent in Q4 2023.

In Q1 2024, it increased again to 14.58 per cent, with a further increase to 16.36 per cent in Q2 2024. Telecoms contribution to GDP however dropped to 13.94 per cent in Q3 2024, according to NCC’s statistics.

But despite the fluctuations in telecoms contribution to GDP, Globacom has remained passionate about sustaining telecoms revolution and ensuring that telecoms consumers have real value for all telecoms services rendered by telecoms operators, which are paid for by the consumers.

It all started with the introduction of per second billing system at the very inception of Globacom’s entrance into the telecoms industry in 2003, at a time when existing telecoms operators were billing in minutes and rounding off every call that ended in seconds into minutes, and compelling consumers to pay in minutes for all voice calls.

Per Second Billing 

Per second billing system, which all telecoms subscribers are currently enjoying across all networks, was introduced by Globacom in 2003, when it rolled out its telecoms services to the Nigerian subscribers. Before 2003, the existing telecoms operators were billing in minutes and were rounding off every call that ended in seconds into minutes and the subscribers were charged in minutes. At that time, if a call ended in five minutes and one second, the call would be automatically rounded off to six minutes and the subscriber is charged for six minutes in line with the call rate. Although telecoms subscribers saw it then as a rip-off, and wondered why  calls that ended in seconds were billed in minutes, but the existing operators at that time, told them that the billing system had already been configured to charge in minutes and that it was not possible to change the billing system to per second billing.

The narrative however changed when Globacom came up with per second billing system from the inception of its service rollout in 2003, a development that forced other operators to immediately changed their billing systems to per second billing and till date, all telecoms subscribers are enjoying per second billing system, that allows them to pay for the exact time spent on a particular call, which translates to paying less, compared to per minute billing system.

Affordable Internet Service

With the landing of Glo 1 submarine cable in 2010, Globacom was able to crash the cost of internet service in Nigeria, thereby giving access to more Nigerians to connect to the internet and deepening broadband penetration in the country.       

Currently, Nigeria has over 164 million active internet subscriptions, with majority of the subscriptions linked to GLo1 submarine cable.

Internet connectivity from various submarine cables like Glo 1, West African Submarine Cable (WASC), African Coast to Europe (ACE) submarine cable and MainOne submarine cable, which have landing points at the shores of Nigeria, have been providing stable internet access to various Internet Service Providers (ISPs) across the country, until some of the cables had major disruptions in March this year, except Glo1, which remained resilient and unaffected.

On March 14, 2024, 13 African countries, including Nigeria, faced internet disruptions as a result of major cuts on the affected subsea cables which led to operational downtime for all businesses connected to the internet, including banks, where bank customers could not carry out banking transactions for hours.

Internet Service Providers (ISPs), as well as broadband connectivity providers, that were connected to the affected submarine cables, were completely disconnected from the internet and from the broadband connections, as they could not provide connectivity access to their customers in banks, schools, churches, mosques, business centres, call centres as well as to organisations across different sectors of the economy.

The disruption was caused by multiple cuts in the submarine cable around the coast line of Senegal and Cote d’ Ivoire.

The affected 13 countries include: Cote d’ Ivoire, Liberia, Benin Republic, Ghana, Burkina Faso, Togo, Cameroon, Gabon, Namibia, Niger, Nigeria, Lesotho, and parts of South Africa.

The affected submarine cables came from Europe, and passed through the East Coast of Africa. The West African Submarine Cable (WASC), African Coast to Europe (ACE) submarine cable and MainOne submarine cable that have landing ducts at the shores of Nigeria, were affected by the multiple cuts.

But Glo1, which has so much resilience and capacities to connect and provide internet access, was not affected in any way. During the period of massive internet disconnections, Glo1 was still providing uninterrupted internet services to its customers, thereby making it possible for all ISPs connected to the Glo1 submarine cable to be able to provide internet services to all their customers, including banks that are connected to the ISPs that are directly linked to Glo1 submarine cable.  

The Glo1 is a 9800km submarine cable connecting Bude in United Kingdom (UK) to Lagos in Nigeria and the rest of West Africa, with landing points in Nigeria, London, Lisbon in Portugal, Accra in Ghana, among other West African countries.

Market Share

Although Globacom was the third entrant into the Global System for Mobile Communication (GSM) market in Nigeria, having launched its telecoms services in August 2003, the telecoms company soon became the second largest telecoms operator in Nigeria in terms of subscriber base and market share, a position it maintained for several years up till early 2024.

The latest statistics on telecom’s market share released by the Nigerian Communications Commission (NCC), however rated Globacom as the third largest telecoms operator in Nigeria, with a subscriber number of 20,545,782 and a market share of 12.15 per cent as at January, 2025.

Financial Inclusion

Encouraged by the positive development in the banking sector, the Central Bank of Nigeria (CBN), launched the Financial Inclusion Strategy in October 2012, which seeks to drive financial inclusion in Nigeria. From the inception of financial inclusion in Nigeria, the CBN excluded telecoms operators from driving the initiative, even though it was driven on the platform of telecoms infrastructure, a development that made the financial inclusion initiative, to become bank-led.

Having witnessed a slow growth in the bank-led financial inclusion initiative, CBN further opened the space between 2020 and 2022, by licensing telecoms operators as Payment Service Banks (PSB), to operate mobile money that will further drive financial inclusion in Nigeria.

While CBN licensed 9mobile as 9PSB, Airtel as SmartCash PSB and MTN as MoMo PSB, it also licensed Globacom as MoneyMaster PSB.

Following the approval granted Globacom to operate MoneyMaster Payment Service Bank (PSB) by the CBN in 2020, the telecoms company, in 2022, launched G-Kala, its flagship product that would further drive the activities of MoneyMaster PSB and deepen financial inclusion across the country.  

According to Globacom, the launch of G-Kala is in line with its commitment to deepen, stimulate the growth of digital payment in Nigeria, and to bridge the country’s financial inclusion gap.

In a statement shortly after the launch in Lagos, the telecom company said: “Our over-arching business objective remains to empower Nigerians by providing them with unlimited opportunities. MoneyMaster extends that objective as it targets the unbanked and under-banked with G-Kala its flagship product in order to deepen financial inclusion in Nigeria.”

Just as Globacom revolutionised the telecoms industry with cutting-edge technology and unique products when it started operations in 2003, MoneyMaster PSB has redefined the payment service banks’ landscape while driving financial inclusion in Nigeria.

Since the launch of MoneyMaster PSB in 2020, the telecoms company has unveiled various suite of innovative and cutting edge business solutions that have helped the unbaked in rural community to carry out safe and secured financial transactions.

With its agent banking platform, Globacom has empowered over 100,000 agents across Nigeria to further deepen financial inclusion in Nigeria.

GDP Growth 

From the inception of GSM services rollout in 2001 up till 2015, telecoms contribution to GDP was put at $70 billion, a development that was made possible by Globacom and other telecoms operators.

But that figure had since been surpassed according to statistics released on the website of the Nigerian Communications Commission (NCC), the telecoms industry regulator.

According to NCC, the contribution of the telecommunications sector to Nigeria’s Gross Domestic Product (GDP), doubled in the last 10 years. GDP in 2012 was 7.7 per cent, but the figure doubled to 14.3 per cent as at the second quarter in 2020. 

The statistics indicated that telecoms contribution to GDP had maintained a steady growth rate between 2012 and 2020, excerpt for 2013, when there was a drop in the contribution, compared to the contribution in 2012.

But it picked up again in 2014, contributing 7.6 per cent to GDP. In 2015, telecoms contribution to GDP further increased to 8.5 per cent and it had another increase in 2016, contributing 9.13 per cent. In 2017, it contributed 8.7 per cent to GDP and in 2018, telecoms contribution to GDP grew to 9.9 per cent.

In 2019, telecoms contribution to GDP grew again to 10.6 per cent and in second quarter 2020, telecoms contribution to GDP, reached 14.3 per cent, representing N2.3 trillion, whereas the entire contribution of ICT to GDP within the same period was 17.5 per cent.

The latest report on telecoms contribution to GDP shows that it increased from 14.3 per cent in the second quarter of 2020 to 14.42 in the second quarter of 2021 and further increased to 15 per cent in second quarter of 2022, before increasing again to 16.06 per cent in second quarter of 2023. It however dropped to 13.50 per cent in the third quarter of 2023, but increased to 14 per cent in fourth quarter 2023. In first quarter 2024, it increased again to 14.58 per cent, with a further increase to 16.36 per cent in second quarter 2024, but dropped to 13.94 per cent in third quarter 2024, according to the latest industry report from the NCC.

Job Creation

The Nigerian telecommunications sector has significantly impacted both direct and indirect job creation since 2001.

The sector has directly employed a substantial number of people. Telecoms Operators  like Globacom, MTN Nigeria, Airtel Nigeria and 9mobile have contributed to job creation by hiring staff for various roles, including customer service, technical support, sales, and management.

The expansion of telecoms networks has led to the construction and maintenance of cell towers, fiber-optic cables, and other infrastructure. These projects require skilled workers, contributing to direct employment. Telecom operators also rely on retail outlets and distribution centers to sell SIM cards, recharge cards, and other services. These outlets employ sales representatives, cashiers, and administrative staff.

In the area of indirect jobs, the telecoms sector stimulates job creation in related industries. For example, manufacturers of telecoms equipment, such as smartphones, routers, and antennas, employ workers. Additionally, logistics companies handle the transportation and distribution of telecoms products.

Indirect jobs are created through service providers like call centres, repair centres, and maintenance teams. These entities support telecoms operations and provide employment opportunities.

As the telecoms sector grows, it generates demand for goods and services across various sectors, thus creating ripple effects that lead to additional job opportunities in areas like transportation, hospitality, and retail.

The telecoms sector’s growth has positively influenced Nigeria’s economy, and it has contributed to GDP growth, infrastructure development, and increased connectivity. Despite being a late starter in technology investments, the industry has made significant strides.

With the contributions of Globacom and other telecoms operators, the Nigerian telecoms sector has been a beacon of hope, fostering job creation directly within the industry and indirectly through its ripple effects on the broader economy.