Telecoms Penetration Grows amid Infrastructure Challenges
In spite of the enormous challenges of infrastructure, there has been an exponential increase in telecoms subscription in Nigeria since GSM was launched 2001, writes Emma Okonji
Since the introduction of the Global System for Mobile Communications (GSM) in Nigeria in 2001, telecommunications subscriptions have maintained a steady growth. Two years after GSM was introduced in the country, subscriptions jumped from 400, 000 lines to over five million active lines, even though the country had struggled to maintain 400,000 lines for several decades.
Since the era of GSM, subscriptions have continued to rise, despite telecoms infrastructural challenges faced by the country.
At the just-concluded 29th Enugu International Trade Fair, the Nigerian Communications Commission (NCC), the telecoms industry regulator, announced that the countryâ€™s phone subscriptions have reached 147 million as at January 2018. Executive Vice Chairman, NCC, Professor Umar Garba Danbatta, who made the disclosure, said Nigeria had continued to witness steady growth in mobile phone subscriptions in such a momentum that had impacted greatly on the countryâ€™s social media space.
Danbatta who was represented by Director of Public Affairs at NCC, Mr. Tony Ojobo, said, â€œOur statistics continue to show positive movement in the provision of services with internet and phone penetrations standing at over 100 million and 147 million subscribers respectively in January 2018.
â€œWith broadband penetration of 21 per cent, Nigeriaâ€™s social media space has continued to thrive and citizens are enjoying access to modern ways of interaction in the cyberspace. â€œ
Although the rise in telecoms subscription has impacted greatly on the social media space as well as the e-commerce space, the country is still battling with telecoms infrastructural challenges. The infrastructural deficit is currently impeding broadband penetration in the country.
Danbatta said Nigerians were not left behind with services and innovations that abound in the Information Communication Technology (ICT) industry. â€œIt is our commitment to keep the nation abreast of developments in telecommunications industry through innovative and world class regulatory processes,â€ Danbatta said at the 29th Enugu International Trade Fair, adding, â€œThe commission will soon issue directive to service providers to give 14 daysâ€™ window to subscribers to enable them roll over their unused data. In other words, this will stop the current practice where subscribers lose unused data even if they fail to renew on the date of the expiration of the current subscription.â€
He said NCC had already put the service providers on special notice about the commissionâ€™s current monitoring of user experience relating to poor reception, wrong billings and deductions and will call them to account in due course.
President of Enugu Chamber of Commerce and Industry, Mines and Agriculture (ECCIMA), Emeka Udeze, said NCCâ€™s presence at the fair was a well thought out strategy to interact with its various publics in the South-east. Udeze said a whole lot of positive changes had taken place in the ICT sector, which had accelerated the pace of socio-economic development of the country.
In 2016, while presenting the first progress report of the eight-point agenda that was unveiled to the media in 2015 by NCC, Danbatta said the Nigeria broadband penetration had reached 20.95 per cent. Since then, the figure has increased to over 21 per cent, an indication that the country has continued to witness steady growth in both mobile phone subscription and broadband penetration.
According to Danbatta, the commission recognises its prime responsibility in the actualisation of the national broadband plan to attain 30 per cent broadband penetration by the end of 2018. He said the commission was set up with the aim of boosting the importance of broadband on the international policy agenda and expanding its access in every country. The NCC boss said that the commission was also set up as a key strategy in accelerating progress towards national and international development targets.
The steady growth in telecoms subscriptions has affected growth in teledensity and mobile internet subscription since 2017, according to statistics obtained from the website of NCC. According to the statistics, both teledensity and the number of mobile internet subscription grew from July to December 2017, bringing the total number of subscriber teledensity to 103.61 per cent, as at December 2017, up from 79.39 per cent in July 2017. The number of mobile internet subscription also rose from 91.4 million in July 2017 to 98. 4 million in December 2017.
Teledensity is the number of active telephone connections per one hundred inhabitants living within an area and is expressed as a percentage figure. NCCâ€™s statistics shows the sum total of all active telephone subscribers and teledensity as calculated on monthly and annual basis. Mobile internet subscription is best described as the active online presence of subscribers connected to the internet through mobile devices, like mobile phones and tablets.
Teledensity and mobile internet subscription assumed new growth in the later part of 2017, after a drop in the first six months in 2017, which was largely attributed to the effect of recession in 2016 and early part of 2017.
According to the statistics, in July last year, the total number of telecoms subscribers across networks was 139.1 million, with a teledensity of 79.39 per cent. In August, number of subscribers rose slightly to 139.4 million, with a slight increase in teledensity of 99.6 per cent. In September, subscriber number rose to 139.9 million, with teledensity of 99.9 per cent. In October, subscriber number also increased to 140.7 million, with increase in teledensity of 100.5 per cent. In November, subscriber number surpassed that of October figure, to reach 142.3 million, with increased teledensity of 101.66 per cent, while in December, the number of subscribers also increased to 145.1 million, with increased teledensity of 103.6 per cent.
The statistics shows that telecoms subscribersâ€™ number and teledensity reached their peak at 155.1 million and 110.8 per cent, repetitively, in January 2017, before nosedived between the months of February and July in 2017. As at July, subscriber number was as low as 139.1 million, with a teledensity of 79.39 per cent, before the figures started picking up again. According to NCCâ€™s latest report, the countryâ€™s phone subscriptions have reached 147 million as at January 2018.
Commending the growth in telecoms subscriptions, teledensity and mobile internet subscription across networks, experts attributed the growth to the availability and affordability of mobile devices, occasioned by the fact that Nigerians and Africans are largely a mobile dependent people.
The growth in mobile internet subscription could also be likened to recent statistics about the increased internet presence among African countries, as released by Google, which ranked Nigeria highest in online presence in Africa, above South Africa and Kenya. The Google research study also ranked Nigeria among the top three countries of the world that spend quality time online in search of various goods and services.
President, Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola, who commended the growth of mobile phone and internet subscriptions across network, said the growth would open up opportunities for more Nigerians to have access to communication and the internet, thereby boosting e-commerce and encouraging merger and acquisition in the ICT industry, as recently witnessed in the acquisition of Konga, an e-commerce business, by the Zinox Group.
Chief Executive Officer of Pinnet Informatics, Mr. Lanre Ajayi, who also commended the steady growth in telecoms subscriptions and mobile internet subscriptions, said the growth would boost innovations on the part of telecoms service providers and spur healthy competition and further growth of the telecoms sector. Ajayi said mobile phone manufacturers should take advantage of the growth opportunity in the Nigeria telecoms space, to consider setting up mobile phone manufacturing plants in Nigeria that will further reduce the cost of mobile phones. Ajayi attributed the growth in telecoms subscriptions and internet subscriptions to affordability and accessibility of mobile phone devices. He said more access to mobile phone devices would further boost mobile subscriptions and internet subscriptions and open up lots of opportunities in the e-commerce space where people could shop online and do a variety of online businesses, using their mobile phones that are connected to the internet.
Despite the growth in telecoms subscriptions, the telecoms business in Nigeria is fraught with challenges. Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said government should enact policies that would protect telecoms infrastructure from vandalism. Adebayo also called on governments at the federal and state levels to remove all forms of barriers, like taxes and levies that are inimical to telecoms growth. He frowned on the recent move by some state governments and federal government agencies to introduce new taxes and levies on telecoms operations, saying such action can erode the gains of telecoms in the country.
Reacting to the Amended Taxes and Levies Order of 2015, which according to Adebayo, has engendered a multiplicity of taxes across different tiers of government, he insisted that such developments were inimical to telecommunications operations and growth in the country. He said the Amended Order failed to fix the taxable rate, resulting in the imposition of arbitrary levies and charges by the state government. The industry is also burdened with enactment of laws at the government level to legitimise various levies and charges that tend to negate the ease of doing business in Nigeria, Adebayo said.
According to him, item 3 (b) of the Amended Schedule to the Taxes and Levies (Approved List for Collection) Act, introduced new levies and taxes under items 12 â€“ 25. â€œMost of these taxes and levies were hitherto contested by our members on the grounds that they were not applicable to telecommunications operations justified by the previous Taxes and Levies (Approved List for Collection) Act 1998,â€ he stated. â€œIt is therefore disturbing that the entire instrument has given the state governments authorisation to coerce and disrupt the operations of our members in order to compel the payment of sundry levies, charges and taxes.â€
ALTON is requesting an executive order to designate telecoms infrastructure as critical national security and economic infrastructure, as prescribed in the Cybercrime Act, 2015, Adebayo said. He called on the federal government to consider rolling out telecoms infrastructure across the country, instead of dissipating energy on how to impose arbitrary levies and taxes on telecoms operations in the country.
In recognition of the deficit in infrastructure rollout across the country, NCC has said the licensing of Infrastructure Companies (InfraCos) will address the shortfalls in telecoms infrastructure rollout. Danbatta assured Nigerians that the additional two InfraCos that were licensed in December would, in collaboration with the existing two InfraCos, address the shortfalls in telecoms infrastructure in the country, especially with last mile broadband capacity transmission.
Danbatta, who spoke at a panel session of the International Institute of Communications (IIC) And Regional, Telecommunications and Media Forum in Singapore, said the newly licensed InfraCos would facilitate the deployment of infrastructure for the telecommunications sector. He noted that the commission had to develop innovative solutions to fast-track infrastructure deployment with a view to deepening the nationâ€™s broadband penetration.
Industry stakeholders had earlier called on NCC to expedite action on the licensing of additional InfraCos to cover each of the six geo-political regions of the country. The stakeholders said the additional InfraCos would assist the existing two InfraCos to begin the rollout of nationwide broadband infrastructure, which would reduce the high cost of bandwidth in the country and boost online presence among Nigerians.
The stakeholders were worried that the lack of sufficient broadband infrastructure had made it difficult for the telecoms operators to maintain cheap telecoms service offerings across the country. The board of NCC had recently issued two additional InfraCos licences to Zinox Technology Limited for South-east; and Brinks Integrated Solutions Limited for North-east, in addition to the MainOne that was issued InfraCo licence to cover Lagos zone, and IHS licensed to cover the North-central zone, bringing the total number of licensed InfraCos to four.