Investors stake NGN 2tn on Nigerian telecoms sector in four years

Foreign direct investors have staked USD 10bn (about NGN 2tn) on the Nigerian telecommunications industry in the last four years, the Nigerian Communications Commission (NCC) has said. The Executive Vice Chairman, NCC, Dr. Eugene Juwah, said this in a presentation he made at a forum with journalists in Abuja on Thursday 07 May 2015. Juwah, who was represented at the forum by the Director of Public Affairs, NCC, Mr. Tony Ojobo, also said that internet penetration in the country now stood at 59.4%. According to him, FDI in the industry has grown from USD 25bn at the end of 2010 to USD 35bn, showing 40% increase within a period of four years. Juwah said, “The Nigerian telecommunications industry has grown in leaps and bounds over the last four years.

Impressive performance of telecoms industry

Our industry statistics as of February 2015 show an active voice subscriber base of about 142.5m; a teledensity of about 101.8%; about 83.2m internet subscribers (overwhelmingly using wireless access means); internet penetration rate of about 59.4%; and FDI of about USD 32bn; and the telecoms industry contributes about 9% to Nigeria’s GDP. “In 2010, there were 88.3m subscribers, with a teledensity of about 63.1% and less than 20m internet subscribers, and an aggregate investment of about USD 25bn with a GDP contribution of 4.5%,” Juwah added. “Regardless of this impressive performance, however, the Nigerian telecommunications industry still has tremendous opportunities for growth, especially in the area of broadband infrastructure deployment.” Juwah said the NCC would continue to encourage the rollout and strengthening of the ICT infrastructure, promote healthy competition in the broadband ecosystem and accessibility and affordability to the entire population.

Need for more spectrum bandwidth

The NCC boss regretted that the impressive results recorded by the industry notwithstanding, broadband penetration had remained low. He listed some of the bottlenecks negating broadband infrastructure rollout to include lack of metropolitan fiber networks in cities across the country; the high cost of leasing intercity fibre backbone infrastructure from existing infrastructure owners; and unregulated pricing of transmission capacity provision from infrastructure owners. Other bottlenecks, he said, were the need for more spectrum bandwidth for mobile broadband to drive internet service expansion, relatively low levels of co-location and infrastructure sharing among industry players and the need to encourage more innovation, especially from small and medium sector players. According to him, the auction of one slot of 30MHz bandwidth in the 2.3GHz frequency spectrum band on a wholesale basis was carried out to trigger broadband expansion and encourage the growth of small and medium-scale internet service providers across the country.

Room for growth for mobile and telecoms

The planned interconnection of internet exchange points across the country is geared towards encouraging small and medium ISPs, improve quality of service delivery of the ISPs, optimising their costs and engendering the growth of innovative services, he said. The rollout of the required metropolitan fiber infrastructure and the provision of fibre infrastructure across the cities and towns as well as the provision of fibre bandwidth, Juwah added, were steps further taken to broaden broadband infrastructure in the country. The above information shows that there have been good steps taken towards the improvement of communication infrastructure in Nigeria. More however, remains to be done for the country’s infrastructure to match that of developed countries. For example, there is a lot of room for growth for mobile and telecoms companies in Nigeria, in areas such as data provision and mobile banking solutions.