Telecom industry contributes $21bn to Nigeria’s GDP

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The mobile telecommunications industry contributed $21 billion to gross domestic product (GDP) in 2017, representing 5.5 per cent of Nigeria’s total GDP. In addition, the growth of Nigeria’s digital economy resulted in the creation of nearly 500,000 direct and indirect jobs.

A report by the GSM Association (GSMA), trade body of mobile global mobile operators titled: “Spotlight on Nigeria: Delivering a Digital Future,” launched at a GSMA industry event yesterday held in conjunction with the Nigerian Communications Commission (NCC) shows that the mobile market in Nigeria makes an important contribution to the economy.

The report said modernizing regulation and policy reform would be crucial to boosting Nigeria’s digital economy and accelerating internet access for millions through increased mobile broadband penetration. The event brought together leaders from across the mobile industry with policymakers to discuss future regulation and how to enable the next-generation of 5G connectivity.

Executive vice chairman, Nigerian Communications Commission (NCC), Professor Umar Danbatta said, “In the world we live in today, mobile communication is a cardinal tool of economic development, growth and integration, and the mobile industry is a key enabler of productivity across economies and societies.

“The mobile industry is not only a significant contributor to the economic activities of Nigeria, but also towards the growth of other sectors of the economy. The Nigerian Communications Commission has been, and continues to play a key role in the development of mobile communication in Nigeria, and I am delighted to be part of this event today. This provides an avenue for regulators, operators, investors, and other relevant stakeholders to examine, share and constructively exchange ideas.”

Head of Sub-Saharan Africa, GSMA, Wale Goodluck said, “Mobile connectivity has already improved the welfare of millions of Nigerians, opening the door to new digital possibilities and powering the country’s economic development.

“For Nigeria to take full advantage of the next phase of its digital transformation, it’s vital that collaboration between industry and government enables the right policy environment for millions more to benefit from ultra-fast mobile broadband. If policies don’t keep pace with the needs of society and technological innovation, there is a risk that citizens will be left behind and productivity and competitiveness will suffer.”

Growth in the adoption of digital services by government, businesses and consumers is having a positive impact on daily life in Nigeria. For the majority of Nigerians, mobile broadband is the first and only technology for accessing the internet, enabling better access to health, education and commercial opportunities, amongst other public services. Smartphone adoption has already risen to over 53 million connections, and 49 per cent of the population are currently connected by mobile technology, compared to less than one per cent who have a fixed-line connection.

However, the report concludes that there is still a broad scope for Nigeria to increase its mobile penetration. Although more Nigerians are getting access to mobile broadband, the country lags regional peers in 4G adoption. Helping to accelerate adoption would enable more advanced services and create bigger societal impacts.

With increased spectrum harmonization and licensing reform, the country’s mobile penetration is forecast to rise to 55 per cent of the population by 2025, with 70 per cent having 3G connectivity and 17 per cent having access to 4G networks. Currently, only 44 per cent of mobile subscribers in Nigeria are using 3G technology and 4 per cent are using 4G technology, compared to over 18 per cent 4G penetration in South Africa and 16 per cent in Angola.

The GSMA has identified support for and release of harmonized spectrum and a modernized licensing framework as fundamental building blocks for Nigeria’s digital future.

The harmonization of 1427-1518 MHz and 3.3–3.6 GHz makes them critically important bands for mobile operators seeking to offer new mobile services to consumers and businesses. Making these bands available for assignment to mobile operators would be a core component in reinforcing Nigeria’s position as Africa’s leading mobile market.

With active participation in the ITU World Radiocommunication Conference 2019 (WRC-19) process, Nigeria is hugely influential. With a year to go until WRC-19, leading the region in support of identifying new IMT bands that 5G would benefit from, especially the 26GHz, 40GHz and 70GHz bands, will be crucial.

Meanwhile, changes in the market and technologies have resulted in a licensing framework and licensing conditions in Nigeria that could benefit from a review and update; left as is, they could pose an impediment to future growth. A future-fit licensing regime will help promote market growth, boost investor confidence and enable increased connectivity.

Building on the progress already achieved by the NCC, the GSMA recommends the following reforms in its report to: Retire the Digital Mobile Licence, the National Carrier Licence and the International Gateway Licence; Eliminate superseded conditions in the Unified Access Service Licence (UASL) and migrate many others towards a supplementary general UASL conditions document or to parallel regulations.

Others are: Transition to an indefinite duration for the UASL; Guarantee a truly unified approach to licensing, permitting licensees to offer the full range of services, as per the UASL scope of services provision; and provide coverage obligations via radio frequency licenses.

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