The Nigerian telecommunication system was fully deregulated in 2000 after the establishment of the Nigerian Communication Commission (NCC) in 1992. Since then, the industry has evolved from having players such as MTN, Visaphone, Multilinks, Globacom, Airtel, and 9Mobile to having just 4 key players who now provide mobile and internet services.
The number of internet and mobile subscribers have significantly grown over the years as the population grew and the need for distance communication increased. Between 2011 and 2020 the number of mobile subscribers increased from 95.89 million mobile subscribers to 204.6 million mobile subscribers. Besides population growth and modernisation, epidemics have also contributed to the recorded growth.
The most notable epidemics in Nigeria in recent times are the avian influenza (bird flu) in 2006, the ebola virus outbreak in 2014, and COVID-19 which began in 2020. The bird flu outbreak, however, did not have a significant impact on economic activities besides the agricultural sector at that time.
Ebola virus outbreak
According to a report from KPMG West Africa in 2015, the ebola virus did not have a significant impact on the Nigerian economy due to how quickly the outbreak was contained. Nigeria’s then Finance Minister, Ngozi Okonjo-Iweala, however, reported a 0.5% deduction from the 2014 GDP forecast as a result of insurgency and ebola.
- Although economic activities weren’t significantly affected by the ebola virus, the Federal government postponed the resumption of schools to 13th of October 2014 to better curtail the spread of the virus during the period. Businesses also began taking precautionary measures for the safety of their staff.
- In the initial period when Nigeria witnessed the Ebola outbreak, the number of mobile and internet subscribers in the country grew marginally month-on-month. However, between the months of November 2014 and February 2015, mobile and internet subscriptions recorded an average growth rate of 1.26% and 3.61% respectively.
- The total number of mobile subscribers increased from 132.6 million in June 2014 before the outbreak of the virus to 135.4 million at the end of October 2014. Similarly, internet subscriptions increased from 67.4 million as of June 2014 to 73.3 million at the end of October 2014.
- However, the contribution of the telecommunication sector to Nigeria’s real GDP in Q3 2014 when the ebola virus broke out declined from 9.25% in Q2 2014 to 7.57%.
Unlike the Ebola virus, the coronavirus hasn’t been fully curtailed since its outbreak in Nigeria in February 2020. Due to the virus’ rapid spread, the federal government declared a complete lockdown in 3 major economic cities – Lagos, Abuja and Ogun state from March 31 2020 till May 4 2020. Subsequently, the lockdown was eased with restrictions placed on public gatherings and the enforcement of the use of masks.
- These regulations and the need for business continuity forced businesses and individuals to look for alternative ways to communicate. Just between February 2020 and March 2020, the number of internet subscribers grew by 3.18% moving from 131.6 million subscribers at the end of February to 135.8 million subscribers at the end of March.
- Due to the huge increase in revenue generated by telecom companies in 2020, they began to offer subsidized service rates to their customers both as incentives to customers and also as a marketing tactic, to increase their market share.
- For example, MTN Nigeria gave 300 SMSs to its subscribers to communicate with their loved ones. Globacom also introduced an ultra-affordable data bundle subscription of 1.25GB for N200 on Sundays only.
- Data gathered from the National Bureau of Statistics showed that in 2020, mobile subscriptions grew by 10.8%, moving from 184.7 million subscribers in Q4 2019 to 204.6 million at the end of Q4 2020. Internet subscriptions sporadically grew by 22.4% from 126.1 million subscribers in 2019 to 154.3 million subscribers at the end of 2020.
Mobile subscription year-on-year growth distribution
- MTN: +17.45%
- Glo: +6.07%
- Airtel: +10.87%
- 9Mobile: -4.84%
- Others: -8.61%
Internet subscription year-on-year growth distribution
- MTN: +20.78%
- Glo: +38.61%
- Airtel: +19.60%
- 9Mobile: -11.75%
- Others: -3.05%
MTN Nigeria’s total revenue in 2020 grew by 15.1% from N1.2 trillion in 2019 to N1.3 trillion at the end of FY2020. Specifically, revenue on voice calls increased by 5.6% from N725.4 billion in 2019 to N766.4 billion. Revenue from data exponentially increased by 51.5% from N219.4 billion in 2019 to N332.4 billion in FY2020.
- Other sources of revenue such as interconnect and roaming, handset and accessories, digital, value-added services and others also recorded an increase except for SMS that declined by 8.7% year-on-year.
- The 9 months ended, 31 December 2020 financial performance of Airtel Africa revealed that the Group’s revenue increased by 13% from $2.52 billion as of Q3 2019 to $2.85 billion as of Q3 2020. Specifically, voice revenue increased by 5.3% from $1.5 billion in Q3 2019 to $1.5 billion as of Q3 2020.
- Data revenue also rose by 24.4% year-on-year from $677 million as of Q3 2019 to $842 million as of Q3 2020. Other sources of revenue to the telecom companies such as mobile money business, VAS, messaging also grew in the period.
As unfortunate as epidemics are to economic growth and some sectors in the economy, the telecommunication sector benefits greatly from them as already seen. The sector grew by 15.29% in 2020 in real terms (real growth) despite the general decline seen in the economy (GDP fell by 1.92%) in 2020.
FG gives completion date for Apapa-Oshodi-Ojota-Oworonshoki road project
The government said the reconstruction/rehabilitation of the expressway will be completed within 9 to 10 months.
The Federal Government has given a timeline for the completion of the Apapa-Oshodi-Ojota-Oworonsoki expressway project.
The government said the reconstruction/rehabilitation of the expressway which was inaugurated by President Muhammadu Buhari in November 2018, to resolve the Apapa traffic gridlock, will be completed within 9 to 10 months.
This disclosure was made by the Federal Controller of Works in Lagos, Mr Olukayode Popoola, during a joint inspection with the Nigerian Ports Authority (NPA) on Saturday, April 17, 2021.
He assured that section one of the project would be completed within 3 weeks and thereafter opened for use.
Popoola said that the rehabilitation works, which had been divided into four sections to ease port congestion and gridlock at the Apapa axis, have section one which spans from Liverpool Round through Creek Road to Beachland near Sunrise and is about 10 km, while section two is 8.4 km and spans from Beachland to Cele Bus Stop.
Briefing the press after the inspection that also had in attendance the NPA Managing Director, Hadiza Usman, and the Hitech Construction Company, the subcontractor handling the project on behalf of the Dangote Group, Popoola said that grey areas such as accessibility due to trucks infringing on construction zone and disagreements on the pace of construction had been resolved.
What the Federal Controller of Works in Lagos is saying
Popoola said that the inspection gave the NPA team the opportunity to see for themselves that the contractor had been working progressively.
He said, “And this section that we are is the end of section one which we have completed. We will complete the remaining portion within the next three weeks, especially the asphalt work.
So within that three weeks, the outstanding works will be completed fully and then the section one will be made available to the motorists.
We (FMW) also complained about the trucks that are infiltrating the road while we are working. We have told them (NPA) that we cannot allow trucks to flock onto the section where we are working because they will disturb the contractor.
So the trucks will now be monitored and controlled fully. Both the NPA security, the Nigerian Police, LASTMA and then the contractor’s representative will form a synergy to work out how they will be controlling the trucks that enter into the port road henceforth,’’ Popoola said.
He said the contractor is expected to move to site to start the construction works on section two of the project based on agreement adding that work on sections three and four had reached an advanced stage, with over 70% completion reached cumulatively.
Popoola said that the entire project would be completed and handed over within the next nine to 10 months, including section two which had just been awarded.
The NPA Managing Director said that agreements were reached on timelines for construction works in order not to disrupt port operations with resolutions that the contractor worked during the weekends and on public holidays to ease congestion.
She said it was resolved that a corridor would be opened for trucks movement in addition to palliative works on some roads and another inspection in three weeks on section one.
The contract was awarded to AG Dangote Construction Company Ltd at the cost of N73bn under the Tax Credit Scheme of the Federal Government.
What you should know
- It can be recalled that the Federal Government had earlier in the year said that the first phase of the Apapa-Oshodi-Ojota-Oworonshoki project, which has faced several delays, would be delivered in April 2021.
- The government said that sections one, three and four of the project which was awarded to AG Dangote Construction Company Ltd at the cost of N73bn under the Tax Credit Scheme of the Federal Government, were almost ready and would be completed in April.
- They had also said that section two of the project which spans from Beach Land bus stop area to Cele Bus Stop which was recently awarded would also be completed in December 2021.
USSD N42 billion debt: Telcos insist banks have to pay, seek CBN, NCC intervention
Telcos in Nigeria have called for the intervention of the CBN and NCC as they insist that banks have to pay the N42 billion debt for the USSD services.
Telecommunications companies have insisted that the banks have to pay the N42 billion debt for the Unstructured Supplementary Service Data (USSD) and called for the intervention of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) over the dispute.
This follows the accumulation of the debt to the mobile network operators over a period of about 1 year for services rendered to the deposit money banks.
According to a report from Punch, this was made known by the Chairman, Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, who said that this has become a moral burden on the banks.
What the Chairman, Association of Licensed Telecommunications Operators of Nigeria is saying
Adebayo, in his statement, said, “The over N42bn debt remains outstanding and the banks have to pay the telcos. It has become a moral obligation because the banks used the services, debited their customer accounts and now not paying the telcos.
Who do they expect to pay and what were the deductions made from their customers for USSD services, which you and I were debited for?
What is the deduction meant to for? It’s a debt and the banks have to pay the operators. It’s a moral obligation.”
On the association’s next step should the banks refuse to pay, Adebayo stated that the CBN and NCC would have to intervene.
He said, “We are hoping the regulators, CBN and NCC, having intervened by preventing operators from disconnecting the USSD services, will resolve the lingering debt issues.
“They (banks) owe the operators and they will pay. Otherwise, where is the money deducted for USSD services from their customers? You and I know we were charged for USSD transactions; what is the deduction meant for?”
What you should know
- It can be recalled that telecommunication firms under the aegis of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), had threatened to withdraw their Unstructured Supplementary Service Data (USSD) services to financial institutions from March 15 due to the N42 billion accumulated debt.
- However, following the intervention of the CBN and NCC, the planned action was shelved with both parties (the telcos and the banks), going into a meeting with the Federal Government representatives.
- As a fallout of the meeting, the CBN and NCC announced the introduction of N6.98 per transaction as new charges for customers using the Unstructured Supplementary Service Data (USSD) services with effect from March 16, 2021.
- Recently, the Chief Executive Officer, Access Bank Plc, Herbert Wigwe, reportedly stated that Nigerian banks were not indebted to telecommunications firms for using telcos platforms to provide payment services.
- The statement made the President, Association of Telecommunications Companies of Nigeria, Ikechukwu Nnamani, ask CBN to call the banks to order as regards agreements reached on the settling of the N42bn.
Nairametrics | Company Earnings
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- PZ Cussons Nigeria Plc appoints Ifueko Okauru as Independent Non-Executive Director.
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- NPF Microfinance Bank reports a profit after tax of N614.42 million in FY 2020.
- UACN Property Development Company Plc appoints Ojo Odunayo as new CEO.
- Unilever Nigeria Plc reports a loss of N492 million in Q1 2021.