Evolving telecom industry in the face of economic recovery

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The Nigerian economy just limped out of recession with 0.55 per cent growth rate in the second quarter of 2017, which is about 2.04 per cent higher than what was recorded in the same quarter last year. When I learned about those figures from the National Bureau of Statistics, I instantly became keen to know the contribution of the telecom industry.

Although the NBS attributed the growth to four key primary sectors, comprising oil, agriculture, manufacturing, and trade, I was still impressed by the fact that the telecom ecosystem also aided our limp out of recession, as it contributed N1.54tn to the country’s Gross Domestic Product in the second quarter, a figure that clearly represents 6.68 per cent increase from the first quarter’s contribution of N1.45tn the same year. Although many Nigerians are yet to start feeling the impact of our coming out of recession, as this could take a while, the tempo of wriggling out completely from the adverse economic situation must be sustained and taken seriously. If not, Nigeria’s economy will be forced to crumble once again. We need to encourage sectors that meet the daily needs of many Nigerians, like the telecom industry with enormous potential, to expediently take the bull by the horns.

The telecom industry is, however, one of the most challenging emerging industries in Nigeria. Its challenges range from multiple taxes, heavy levies on the ICT infrastructure, scarcity of forex, to the destruction of fibre lines, but an introspective analysis of the industry should put smiles on anybody’s face.

The industry has evolved in the last 17 years, recording an uninterrupted growth, as well as disruptions, due to the ever changing dynamic innovations. Some of these innovations are offering convenience to Nigerians.

Looking back to the early days, putting a call through on a mobile phone was a daunting task, as one might need to move to a particular location before a call could go through or have a better reception. Today, the case is different. You could sit comfortably in your house and make a video call. The industry is full of potential, which is still undergoing the process of exploration. A lot of disruptions are taking place, which position the telecom industry at the pinnacle, if one is to juxtapose it with other sectors in Nigeria.

Historically, the telecom industry started from its infancy in 2001, with a paltry investment of $500m; this was the period when MTN Nigeria came into the Nigerian market. And the entry of the South African firm, subsequently paved the way for other investors. Nigerians saw the industry’s investments growing gradually. As of then, (2001), we had 400,000 connected lines. The country, however, now boasts of 155 million connected lines, recording a teledensity of 111 per cent. Currently, we speak of an industry worth about $68bn with $35bn coming from Foreign Direct Investments, contributing 9.80 per cent to the GDP annually.

The growth is not just about the current worth, the FDI or the GDP. The sector could also boast of many operators that are constantly in competition, to keep Nigerians loyal to their products and services, all to the advantage of Nigerians.

It is instructive to note that the ecosystem has grown as a result of the concerted efforts of different stakeholders, such as the foremost regulator, Nigerian Communications Commission, National Information Technology Development Agency, Association of Telecoms Companies of Nigeria, Association of Licensed Telecom Operators of Nigeria, the Ministry of Communications and others. Each of these agencies and stakeholders has contributed significantly, in one way or the other, to the glittering feat of the industry that has attracted international commendation. On different occasions, there has been several collaborations and synergies among the stakeholders, with the primary objective of driving the industry forward. Most of these ties, no doubt, have yielded the necessary results, while Nigerians await the rest to fall in place, positively.

About five years ago, for instance, the NCC organised a National Stakeholders Consultative Forum and invited key stakeholders in the industry to discuss critical issues expected to drive growth in the sector. That forum aimed to ensure that critical inputs from key stakeholders were considered in the development of a five-year strategic management plan for the commission. A good number of the recommendations are now the policies in the industry today.

Another significant area that contributed to the sector’s success is the regulation of good service delivery. This is one major area, where the NCC has devoted its attention. The commission has devised various measures, which are currently in operation, to improve the quality of service, consumer satisfaction and making the telecom subscribers get value for their money. This success is as a result of the strategic collaboration with other key players, who are relentlessly making efforts to catapult the industry to a higher level.

At this juncture, I would like to commend the efforts of various industry stakeholders who have pioneered this industry for the past 17 years. But the sector is not there yet. There is, however, an urgent need to start attending to the challenges in the telecom sector to make it more effective. Some of these challenges, not insurmountable, are enacting policies that will create enabling environment for investors; dealing with double taxation; introduction of tax holidays; heavy levies on the ICT infrastructure; scarcity of forex and protection of critical telco infrastructure. All these will eventually make possible the necessary broadband penetration that will relatively improve the economy of Nigeria.

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