Mobile Technology Continues to Drive Growth in Nigeria’s Telecommunications Sector
Nigeria’s mobile technology sector continues to experience sustained growth, with the total number of mobile subscriptions reaching 225.88 million in January 2023.
This represents a significant increase of 3.66 million more mobile subscriptions than the previous month.
New industry data from the Nigerian Communications Commission reveals that the teledensity, which measures the number of active telephones per 100 people living in an area, grew to 118.51 per cent in January. This highlights the widespread adoption of mobile technology in Nigeria, with mobile subscriptions on MTN Nigeria growing to 91.95 million, 60.56 million on Airtel, 60.34 million on Globacom, and 13.03 million on 9mobile.
The growth of the mobile technology sector has also led to increased broadband penetration, which reached 48.20 per cent in January, with the number of mobile Internet subscriptions reaching 155.68 million. This is a significant step towards the government’s target of achieving 50 per cent broadband penetration by 2023.
The mobile industry’s contribution to the Nigerian economy cannot be overlooked. In 2022, it contributed N10.13tn in real terms, translating to economic gains for the country.
Additionally, mobile technologies have played a critical role in driving digital inclusion and financial inclusion, with mobile connectivity being the predominant form of connectivity in Nigeria, according to the GSMA.
In January 2023, mobile transactions grew by 230 per cent, demonstrating the role that mobile technology is playing in driving the country’s financial inclusion agenda. The widespread adoption of mobile technology is driving investment in network coverage, bringing connectivity to even more people across the country.
Experts in Nigeria Telco Industry Expresses Concerns Over Low Foreign Capital Inflow
The decline in Foreign capital inflow into the Nigerian telecommunications sector has heightened experts’ concern as the nation looks to deepen its broadband penetration.
In 2019, Nigeria’s telecommunications sector welcomed $942.8 million (N358.26 billion) in capital inflow. This amount declined by $525.4 million to $417. 5 million in 2020 while in 2021, the foreign direct investment into the sector was flat at $417.5 million, the same as in 2020.
In 2022, Nigeria’s economy recorded a boost in foreign direct investment to the tune of N23.982 billion ($57.79 million) in Q1 of 2022. Data obtained from the National Bureau of Statistics disclosed that the figure represents a 2.6 percent increase when compared to the same period last year.
Speaking on some of the reasons for low foreign capital inflow in Nigeria’s telecommunications industry, the President of the Association of Telecommunications Company of Nigeria (ATCON) and Chief Executive Officer of Medallion Communication Limited Engr. Ikechukwu Nnamani disclosed that Nigeria’s unfriendly foreign exchange is a limiting factor that has discouraged foreign investors.
He added that foreign investors have bemoaned the contradictory regulations coming from the Central Bank of Nigeria (CBN), which they claim is discouraging them from making investments in Nigeria.
In his words, “It has been estimated that the country would require $100 billion in investments in the next 10 years to bridge the existing infrastructure gap in the telecom sector, but where is the money going to come from?
“The exchange rate situation in Nigeria is of serious concern for Foreign investors, they are not sure of what the situation would be by the time they want to repatriate their returns. Their returns on investments could be halved due to the fluctuations in the exchange rate. If we want to see investors, we have to first address the foreign exchange situation.”
Meanwhile the 5G network rollout in the country, was said to have reportedly increased foreign investments in the telecommunication sector. According to telecom experts, 5G is expected to headline network investment and drive foreign investment into the sector.
Investors King understands that MTN Nigeria and Airtel Africa which are considered the big players in the industry had their investments in the sector increase to N613.13 billion in 2022. While MTN spent a total of N504.33 billion on the network rollout, Airtel’s investment hit N108.79 billion ($236m) for the same purpose.
The 5G network is projected to contribute $2.2 trillion to the global economy by 2034, according to a 2020 GSMA Intelligence report, titled: ‘The Mobile Economy’.
Nigeria reportedly has one of the largest telecommunications markets in Africa, supported by the second largest economy on the continent after South Africa. In recent years, the telecom sector has benefitted from supportive regulatory measures aimed at improving competition and developing infrastructure. This has helped boost the country’s broadband sector, which remains strongly focussed on mobile connectivity.
MTN Nigeria Partners With Amazon Prime Video to Offer Mobile-Only Subscription
MTN Nigeria, the largest telecommunication company in the country, has teamed up with Amazon’s Prime Video to offer Prime Video Mobile Edition to its customers.
This collaboration between MTN, I Cell Communications, Vector, and the Mondia Group has made MTN Nigeria the first telco in Nigeria to offer Prime Video Mobile Edition.
Prime Video Mobile Edition is a single-device, mobile-only subscription that offers MTN customers access to Prime Video’s extensive catalogue of more than 9,000 movies and 1,500 TV shows in standard definition. This subscription comes with an affordable and dedicated data package for streaming and downloading.
According to A’isha Umar Mumuni, Chief Digital Officer at MTN Nigeria, “We are excited to offer Prime Video subscriptions to millions of Nigerians, providing them with access to entertainment on their own terms – where and when they want it. Video-on-demand has become a major part of our lives, and this launch offer is important to make every customer’s journey to their desired content more accessible and affordable.”
The launch of Prime Video Mobile Edition plans being offered to MTN customers marks a significant milestone in the African digital content market. This partnership brings together critical stakeholders, including i-Cell Multimedia Limited, the mobile VAS Aggregator License holder, Vector Telecoms Limited, the mobile service provider, and Mondia Group acting as Technical Partner to Amazon.
i-Cell Multimedia Limited has played a critical role in this launch, being a leading and licensed digital content aggregator with a reputation for delivering high-quality digital content to mobile subscribers in Nigeria. Its relationship with Amazon is a testament to its commitment to innovation and customer satisfaction.
H. Fayad, the Chief Operating Officer of i-Cell Multimedia, said, “We are thrilled to work with Amazon to enable MTN customers to subscribe to Prime Video Mobile Edition. This is a game-changer for the Nigerian entertainment industry, and we are proud to be at the forefront of this exciting development.”
MTN Nigeria’s collaboration with Amazon Prime Video not only benefits its customers but also the Nigerian movie industry. With over 150 Nollywood titles already on the Prime Video platform and several Nigerian Originals currently in the pipeline, this relationship will bring value to both customers and the Nigerian movie industry.
Nigeria’s Federal Government Removes Excise Duty on Telecommunications Services
The Nigerian Federal Government has announced the removal of the proposed five per cent excise duty on telecommunication services.
The move is in line with the recommendations of the Presidential Review Committee on Excise Duty in the Digital Economy Sector, which was set up to review the implementation of excise duty in the telecom sector, Investors King reports.
Isa Pantami, the Minister of Communications and Digital Economy and chairman of the committee, made the announcement at a press briefing.
He stated that the exemption was granted due to the argument presented to President Muhammadu Buhari by the committee that the additional burden on the telecom sector would increase the sufferings of Nigerians.
The telecoms sector is already heavily taxed, paying up to 41 categories of taxes, levies, and charges. Pantami noted that there was no need for excise duty in the sector, as it had been contributing hugely to Nigeria’s economy.
The proposed tax had been met with resistance from telecommunication consumers under the National Association of Telecoms Subscribers, who had sued the Federal Government in court. The tax would have been an additional burden on the already struggling small and medium-sized enterprises that depend on the sector for survival.
The removal of the excise duty is a welcome development for consumers and businesses in the sector. It will relieve the burden on telecom operators and ensure the continued growth of the industry.
The government’s decision to exempt the digital economy sector from the tax is a step in the right direction towards promoting a favorable business environment for investment and growth.
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