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  • Nigeria’s telecom industry at critical point, say operators

    Nigeria’s telecom industry at critical point, say operators

    About three decades after the liberalisation of the telecom sector, the industry which has contributed about 17 per cent to the nation’s gross domestic product (GDP) is at the cross roads with myriads of existential challenges and merging technologies, operators have said.

    But the regulator of the industry, Nigerian Communications Commission (NCC), assured that steps were being taken to address the challenges besetting the industry.

    The operators, acting under the aegis of Association of Telecommunication Companies of Nigeria (ATCON), said challenges such as multiple taxation, right-of-way bottlenecks and infrastructure vandalism, and others continue to stifle the growth of the industry.

    Its President, Tony Izuagbe Emoekpere, who spoke at Oriental Hotel, Lagos at the weekend during the 31st anniversary dinner of the group, said the operators will nonetheless continue to advocate for policies that foster innovation and investment; drive infrastructure development to bridge connectivity gaps; and collaborate across public and private sectors to position Nigeria as a leading digital economy in Africa.

    Recall that ATCON and its sister association, Association of Licensed Telecom Companies of Nigeria (ALTON), in a joint statement had appealed to the Federal Government, through the NCC, to allow for an upward review of end user tariffs, citing astronomical surge in inflation and weak value of local currency against the US dollar which is the currency for telecom infrastructure purchase. MTN Nigeria CEO, Karl Toriola, had described the entire industry as being in an intensive care unit (ICU), warning that if urgent measures weren’t taken, it might go the way of NITEL and NEPA with epileptic services as hallmarks.

    Read Also: Telecom tariff hike divides subscriber bodies

    Emoekpere said the industry is at critical junction with the advent of emerging technologies.

     “The Nigerian telecom industry is at a pivotal juncture, with emerging technologies like 5G (fifth generation), Artificial Intelligence (AI), and the Internet of Things (IoT) reshaping global communication,” he said adding that as an association, ATCON remained committed to ensuring Nigeria remains competitive in this rapidly evolving landscape.

     “Our goals are clear: advocate for policies that foster innovation and investment; drive infrastructure development to bridge connectivity gaps; and collaborate across public and private sectors to position Nigeria as a leading digital economy in Africa.

     “Together, we must strive to overcome challenges such as multiple taxation, right-of-way bottlenecks and infrastructure vandalism, ensuring our industry continues to thrive,” he said.

    Executive Vice Chairman at NCC, Dr. Aminu Maida, in a speech that appeared delivered extempore, said the agency is working hard to address the issues, citing the critical infrastructure presidential order as a bold step of President Bola Tinubu. He said the Order is already in the process of opeartionalisation.

  • Telecom subscribers reject tariff hike

    Telecom subscribers reject tariff hike

    Telecom subscribers have kicked against the push by Nigeria mobile network operators (MNOs)to increase end user tariff on calls, data and others.

    They say it is akin to putting the cart before the horse, insisting that customer experience on the network should precede any tariff hike.

    The MNOs had, through the Association of Licensed Companies of Nigeria (ALTON), warned about likely service disruptions in the country should they be restricted to charging a tariff that does not cover their cost of operation, citing micro and macro economic headwinds in the country.

    The subscribers, acting under the aegis of Association of Telephones, Cable TV and Internet Subscribers of Nigeria (ATCIS), during a press conference in Lagos at the weekend, vehemently opposed the proposed tariff hike arguing that acceding to such a demand by the Nigerian Communications Commission (NCC) will inevitably increase the burden of economic reform in the country.

    ATCIS National President, Sina Bilesanmi, described the timing of the proposed tariff increase as “most insensitive” given the prevailing economic challenges faced by Nigerians.

     “We are concerned that this strident call for a tariff hike is most unwelcome. It will impoverish telecom subscribers further, considering the realities on ground.

     “We see it as most insensitive as it will impoverish our members the more in view of the realities on ground.

    Read Also: Telecom subscribers reject tariff hike

     “The telcos have blamed the rising cost of diesel for powering their base transceiver stations (BTS) as one of the major reasons for the current clamour for tariff hike. We say no to any hike at this time with declining service quality.

     “We say no to any hike without the consultation of consumer advocacy bodies such as ours. We reject any tariff hike without improved service quality. We align with the position of the NCC on this. The telcos shouldn’t resort to subtle threats and blackmail to get the approval of the NCC to hike tariffs,” he said.

    He highlighted the significant contribution of the telecom sector to the nation’s gross domestic product (GDP) but emphasized that this does not justify burdening consumers with increased costs. “While we understand the industry faces challenges, we believe any tariff increase will place an undue burden on consumers, many of whom are already struggling with the current economic situation,” ATCIS president added.

    ATCIS urged the NCC to intervene, saying: “We urge the telecom companies to show restraint in implementing these increases and to explore ways to minimize the impact on vulnerable consumers, most of whom are our members, the many voiceless Nigerians.”

    ATCIS also demanded transparency from telecom companies, stating: “We call for full transparency on the justification for this increase and the expected benefits to consumers.

    “We demand that telecom companies improve service quality in line with the increased tariffs which the experiences of our members on the network have shown.”

    Also speaking at the event, Welfare Manager at ATCIS, Mr. Sam Oladipupo, underscored the need for fair billing practices and open stakeholder consultations before any tariff hike.

     “Subscribers are tired of arbitrary charges and unexplained deductions. There should be transparency in billing and customers should be fully informed about any changes to their plans. The N4 we pay for SMS should not even be in the first place,” he said.

    Oladipupo also called on telecom operators to reward loyal customers and show empathy to subscribers facing economic hardship. “It is important for telecom companies to recognize the value of their long-standing customers and support those struggling financially, especially at this time that most homes are struggling to make ends meet,” he added.

    ATCIS vowed to continue advocating for fair pricing, quality service, and the protection of consumer interests in Nigeria’s telecom sector just as it also emphasized its commitment to working with the telecom industry and the regulator to find solutions that protect consumers while ensuring the sustainability of the sector.

  • Telecom subscribers reject tariff hike

    Telecom subscribers reject tariff hike

    Telecom subscribers have kicked against the push by Nigeria mobile network operators (MNOs) to increase end user tariff on calls, data and others.

    They say it is akin to putting the cart before the horse, insisting that customer experience on the network should precede any tariff hike.

    The MNOs , through the Association of Licensed Companies of Nigeria (ALTON), warned about likely service disruptions in the country should they be restricted to charging a tariff that does not cover their cost of operation, citing micro and macro economic headwinds in the country.

    The subscribers, acting under the aegis of Association of Telephones, Cable TV and Internet Subscribers of Nigeria (ATCIS), during a briefing in Lagos at the weekend, vehemently opposed the proposed tariff hike arguing that acceding to such a demand by the Nigerian Communications Commission (NCC) will inevitably increase the burden of economic reform in the country.

    ATCIS National President, Sina Bilesanmi, described the timing of the proposed tariff increase as “most insensitive” given the prevailing economic challenges faced by Nigerians.

    “We are concerned that this strident call for a tariff hike is most unwelcome. It will impoverish telecom subscribers further, considering the realities on ground.

    “We see it as most insensitive as it will impoverish our members the more in view of the realities on ground.

    “The telcos have blamed the rising cost of diesel for powering their base transceiver stations (BTS) as one of the major reasons for the current clamour for tariff hike. We say no to any hike at this time with declining service quality.

    “We say no to any hike without the consultation of consumer advocacy bodies such as ours. We reject any tariff hike without improved service quality. We align with the position of the NCC on this. The telcos shouldn’t resort to subtle threats and blackmail to get the approval of the NCC to hike tariffs,” he said.

    He highlighted the significant contribution of the telecom sector to the nation’s gross domestic product (GDP) but emphasized that this does not justify burdening consumers with increased costs. “While we understand the industry faces challenges, we believe any tariff increase will place an undue burden on consumers, many of whom are already struggling with the current economic situation,” ATCIS president added.

    ATCIS urged the NCC to intervene, saying: “We urge the telecom companies to show restraint in implementing these increases and to explore ways to minimize the impact on vulnerable consumers, most of whom are our members, the many voiceless Nigerians.”

    ATCIS also demanded transparency from telecom companies, stating: “We call for full transparency on the justification for this increase and the expected benefits to consumers.

    “We demand that telecom companies improve service quality in line with the increased tariffs which the experiences of our members on the network have shown.”

    Read Also: FRSC cautions against carrying petrol-filled jerrycans in vehicles

    Also speaking at the event, Welfare Manager at ATCIS, Mr. Sam Oladipupo, underscored the need for fair billing practices and open stakeholder consultations before any tariff hike.

    “Subscribers are tired of arbitrary charges and unexplained deductions. There should be transparency in billing and customers should be fully informed about any changes to their plans. The N4 we pay for SMS should not even be in the first place,” he said.

    Oladipupo also called on telecom operators to reward loyal customers and show empathy to subscribers facing economic hardship. “It is important for telecom companies to recognize the value of their long-standing customers and support those struggling financially, especially at this time that most homes are struggling to make ends meet,” he added.

    ATCIS vowed to continue advocating for fair pricing, quality service, and the protection of consumer interests in Nigeria’s telecom sector just as it also emphasized its commitment to working with the telecom industry and the regulator to find solutions that protect consumers while ensuring the sustainability of the sector.

  • Telecom firms seek nod to raise tariffs

    Telecom firms seek nod to raise tariffs

    Telecom operators yesterday renewed their push for end-user tariff hike to reflect the cost of doing business.

    The operators, acting under the aegis of Association of Licensed Telecom Companies of Nigeria (ALTON) and Association of Telecom Companies of Nigeria (ATCON) in a joint statement asked for a cost-reflective tariff of services.

    They urged the Federal Government to protect telecom infrastructure against willful vandalism and theft.

    The statement reads: “ALTON and ATCON respectfully reiterate that telecommunications infrastructure development requires substantial investments in network expansion, maintenance, and technology upgrades.

    “Despite the adverse economic headwinds, the telecommunications industry remains the only industry yet to review its general service pricing framework upward in the last 11 years, primarily due to regulatory constraints.

    “For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence. ATCON and ALTON call upon the government to facilitate a constructive dialogue with industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with operators’ financial viability.”

    On infrastructure deficits, ALTON and ATCON said their members still lack access to essential telecommunication services due to a myriad of challenges, including multiple taxation and regulations and prohibitive Right of Way (RoW) charges, inadequate electric power supply and vandalism of telecommunications infrastructure.

    The groups sought the protection of assets and network infrastructure and urged the Federal Government for legislation that designates telecommunications infrastructure as Critical National Infrastructure (CNI).

    They said: “Both Associations expressed deep concern over the escalating security threats facing telecommunications infrastructure in Nigeria. Telecommunications infrastructure undoubtedly plays a pivotal role in Nigeria’s national security and socioeconomic growth, especially as the country currently contends with multiple security challenges that require urgent and immediate actions in response to these threats.

    “Attacks on cell towers, fibre optic cables, and other critical assets disrupt telecommunications services and result in significant financial losses for operators.

    Read Also: ‘Economic challenges threaten telecom sector’

    “The associations urge the government to prioritize the security of telecommunications infrastructure and collaborate with law enforcement agencies to enhance protection measures and combat vandalism and sabotage effectively.”

    On regulatory independence, ALTON and ATCON advocate for the sustenance of a culture of independence in the regulatory landscape to safeguard against undue influence and unwholesome incursion into the Nigerian Communications Commission (NCC’s) domain, which will inspire trust in the telecommunications sector and encourage investment.

    The associations further said: “Regulatory neutrality and independence are crucial to ensuring a thriving telecommunications sector. Statutory provisions lend credence to this notion, as a lack of an impartial regulator will lead to a failure to maintain public confidence in the objectivity and independence of its decisions.

    “We reaffirm our commitment to working collaboratively with the government to address the challenges facing the telecommunications industry in Nigeria. By fostering a conducive regulatory environment, prioritising infrastructure development, enhancing security measures, and facilitating pricing adjustments, the government can unlock the full potential of Nigeria’s telecommunications sector, driving economic growth and societal development.”

  • Severe fibre cuts disrupt telecom services

    Severe fibre cuts disrupt telecom services

    • NCC to telcos: deactivate SIMS not linked to NIN

    Mobile Network Operators (MNOs) apologised yesterday to their subscribers for the service hitches they have experienced for some days.

    The MNOs, under the aegis of the Association of Licensed Telecoms Operators of Nigeria (ALTON), blamed the service disruptions on “severe fibre cuts” by contractors.

    “There are reports of multiple fibre cuts that took a toll on the integrity of our networks,” ALTON Chairman Gbenga Adebayo told The Nation.

    He explained that since fibre optic cables are laid under the ground, they are highly susceptible to cuts during road and other infrastructure constructions.

    Most subscribers yesterday experienced the worst service disruptions, especially those in Lagos, who rely on their mobile phones for business and social activities.

    A subscriber and CEO of Sanjoks Enterprises, Esther Kokumo, described her experience as harrowing.

    She said: “The usual method of payment each time I go to the factory is either through the use of a Point of Sale Machine (PoS) or transfer through my bank account.

    “After calculating my bill, I already had the account number of the company and I tried to transfer cash, but no luck. When I tried doing the same via PoS, it just kept buffering.”

    Kokumode told The Nation that she was only allowed to go on self-recognition.

    An Enugu-based subscriber, Chukwuma Ohia, said he promised to pay for goods sent to him on Monday from Lagos but could not due to network failure.

    Ohia said: “I received a consignment on Monday which I had promised to make a payment today (yesterday), but to my shock, the network disappointed me. By the time I realised that the network would not work, it was too late for me to enter the banking hall. I am used to transferring cash within the comfort of my office, using my mobile App or USSD.

    Read Also: Active telecom voice subscribers hit 224,713,710

    “The service providers should please note that our livelihoods now depend on the network.” 

    Also, telecommunication subscribers who have not linked their SIMs to their NINs will from this morning be cut off by the telcos.

    The Nigerian Communication Commission (NCC) announced this at its special day at the 45th Kaduna International Trade Fair yesterday in Kaduna.

    The commission said the telcos must deactivate unlinked SIMs since it has not been served last Monday’s court order stopping its directive.    

    NCC Executive Vice Chairman/Chief Executive Officer Aminu Maida, who was represented by Director of Public Affairs, Reuben Mouka, said as a matter of critical national security, owners of such SIMs must link them to their NINs.

    As the challenge persisted, the Nigerian Communications Commission (NCC) insisted that its December 2023 directive to the MNOs/telcos to deactivate all Subscriber Identity Modules (SIMs) not linked to the National Identification Numbers (NINs) of their users remained unchanged.

    MTN, which is Nigeria’s largest carrier and worst hit by the fibre cuts, appealed for the understanding to its 87,038,768 customers.

  • Active telecom voice subscribers hit 224,713,710

    Active telecom voice subscribers hit 224,713,710

    The National Bureau of Statistics (NBS) yesterday said active telecom voice subscribers increased by 0.96 per cent from 222,571,568 in fourth quarter (Q4 2022) to 224,713,710 in Q4 2023.

    NBS, however, noted that on quarterly, the subscribers rose by 1.33 per cent.

    This was contained in its data tagged: “Telecoms Data: Active Voice and Internet per State, Porting and Tariff Information (Q4 2023).”

    The document stated: “The total number of active voice subscribers was 224,713,710 in Q4 2023 from 222,571,568 recorded in the corresponding quarter of 2022, indicating a growth rate of 0.96 per cent. On a quarter-on-quarter basis, this rose by 1.32 per cent.”

     According to the report, also, in Q4 2023, the total number of active internet subscribers stood at 163,838,439 from 154,847,901 reported in Q4 2022, showing an increase of 5.81per cent.

    Read Also: Active telecom voice subscribers hit 224,713,710 in Q4 2023

    It added that on a quarterly, this grew by 2.29 per cent.

    On state profile analysis, NBS said Lagos State had the highest number of active voice subscribers in Q4 2023 with 26, 739,346, followed by Ogun with 13,070,779 and Kano with 12,325,633.

    On the other hand, Bayelsa still recorded the least with 1,557,786, followed by Zamfara and Gombe with 2,772,424 and 2,785,030.

     The document said similarly, Lagos had the highest number of active internet subscribers in Q4 2023 with 18,927,446, followed by Ogun with 9,570,463 and Kano with 9,031,581.

    The bureau noted that  Bayelsa recorded the least active internet subscriber with 1,193,525, followed by Zamfara and Gombe with 1,959,252 and 2,100,073.

    NBS said, however, that MTN maintains its status as the telecom service providers with highest share of subscriptions in Q4 2023.

  • Nigeria’s telecom subscriber figures on steady dip

    Nigeria’s telecom subscriber figures on steady dip

    The number of telecom users in the country known as active telecom lines has continued to decline, telecom sector regulator, the Nigerian Communications Commission (NCC) data showed.

    According to a document entitled: “Subscriber/Teledensity Data January 2023-December 2023’’ prepared by the NCC, during the year under review, February recorded the highest number of active subscribers reaching 227,179,946 while June had the lowest of 220,086,951.

    Starting the year with 226,226,754, the year ended in December with 224,713,710. When the February bullish run with the bear ended the year, some 2,466,236 subscribers stopped using the mobile lines to either make and receive voice calls or send short message service (SMS) or text messages which translates to revenue loss to the mobile network operators (MNOs).

    The NCC document showed that in March, the February run experienced a decline to 226,161,713 while in April, it dipped further to 223, 663,521, depressing further in May to 221,258,372. In June, it slumped to 220,086,951, the lowest while in July, it stood at 220,860,987; August 220,715,961; it moved up marginally in September to 221,769,883; rose again to 222,188,195 in October and in November, it moved to 223,220,009 ending the year with 224,713,710.

    The continued slide in the number of active subscribers is coming at a time when the MNOs are pushing for an end user tariff hike, ostensibly because of an excruciating operating environment, especially high energy cost. The umbrella body of telecom operators, Association of Licensed Telecom Operators of Nigeria (ALTON), energy cost accounts for between 40 per cent and 45 per cent of operating cost (opex). 

    According to the last 2022 Subscriber/Network Data  Annual Report  prepared and released by the    Policy Competition  and Economic Analysis Department of the NCC,  the industry recorded N2,092,815,085,166 total operating cost. Of this cost, the global system for mobile communication (GSM) had  N1,996,659,000,000 while revenue stood at N3,329,241,000,000.00 and capital expenditure of N718,350,570,000.

    Executive Secretary at ALTON, Gbolahan Awonuga blamed the decline on ongoing subscriber identity module (SIM) and National Identity Number (NIN) linkage and the general twist in the economic fortunes of the subscribers.

    Read Also: On interconnection settlement challenges in telecom sector

    According to him, Nigeria is a multi-SIMming country with an average subscriber using more than two SIM cards. With the ever increasing fall in the average revenue per user (ARPU) of subscribers, no thanks to spiraling inflation which diminishes the value of the disposal income of the people, some customers may have dumped their SIMs to reduce costs.

    Another factor that may have accounted for this development is the mass relocation of Nigerians abroad, a development that has been labelled ‘Japa’ pandemic.

    The Nigeria Immigration Service (NIS) said over 3.6 million Nigerians have migrated to other countries within a space of two years.

    The Controller, Murtala Muhammed International Airport Command, Mrs. Adeola Adesola Adesokan, said data from NIS’s Migration Information Data Analysis System (MIDAS), showed that about 2, 115, 139 persons emigrated from Nigeria in 2022, while 1, 574, 357 left the country from January to September 31,2023, making it a total of 3,679, 496 that have left Nigeria in the last two years.

    Most of the migrants who left for greener pastures overseas due to economic hardship, and others that secured admission for further studies would have to drop their GSM lines.  Some of these lines would have been blocked and reassigned to fresh users because, as a matter of policy, any SIM card that failed to generate economic activity is withdrawn into the SIM basket and reassigned.

    On the contrary however, internet subscriptions continued to rise. It rose from 156,244, 368 in January to peak at 163,838,439 in December of the period under review. In February, it was 156,987,433 but rose to 157,551,104 in March; 158,231,544 in April; 159, 598,451 in May; 159,498,826 in June; 159,534,913 in July; and 159,034,717 in August.

    The figure grew from 160,171,125; 161,137,357 and 162,060,769 in September, October and November respectively.

  • ‘Competition key in telecom sector’

    ‘Competition key in telecom sector’

    Executive Vice Chairman (EVC) of the Nigeria Communications Commission, Dr. Aminu Maida, has said competition is vital to the healthy growth of the telecoms sector.

    Maida, who spoke when he received a delegation of management of Airtel Networks Limited in Abuja, said the Commission will give closer attention to managing the competition in the industry.

     ”We are more inclined to promote competition by creating a level-playing ground for all our licensees,” he said.

    The NCC boss explained that the Commission is looking at all sides of the issue on competition in the sector.

    “Indeed, the rising cost of business is affecting every sector.  We are also looking at a win-win regulatory approach, but we need to be careful to avoid over-regulation, as over-regulation is inimical to competition in the industry.

     ”The NCC has recently undertaken the review of all categories of licences, both class and individual, with a view to ensuring that our licensees are still able to work well within their capital and operating expenditure (COPEX),” he said.

    Read Also: Nigeria’s telecom sector records$2.5b cash importation

    In the same vein, Maida during the visit by the Airtel delegation said, in line with regulatory approach, the Commission considers it critical to have a win-win strategies and regulatory framework in place to ensure sustainability of the telecom industry.

    “It’s critical for the NCC and telcos to develop win-win strategies for the Nigerian telecom industry so that everybody gets value. The Minister has a blueprint, the President has the Renewed Hope Agenda, and they need to achieve it while telcos need to deliver value to the customers,” he said.

    The Airtel Network delegation was led by the company’s Chief Executive Officer, Carl Cruz, who congratulated the EVC for his appointment by the President and confirmation by the Senate.

    Cruz said while the Commission deserves commendation for its competition regulatory policies and frameworks, which it has put in place over the years, such efforts must be sustained to ensure a healthy competitive environment for telecom licensees.

  • Macroeconomic headwinds take toll on telcos’ balance sheet

    Macroeconomic headwinds take toll on telcos’ balance sheet

    Telecom giants, MTN Nigeria and Airtel Nigeria have been negatively impacted by economic headwinds in Nigeria which led to a decline in revenue and profit before tax  respectively.

    The year has been terribly challenging for many businesses in the country. Commenting on the financial performance of MTN Nigeria, its CEO Karl Toriola said the first nine months of the year have been a tough one for the telco.

    He highlighted the devaluation of the naira and the high inflation rate as some of the reasons for the company’s financial performance.

    Toriola, in a trading update, had said: “The full impact of Naira devaluation and VAT (value added tax) on lease costs, exacerbated by ongoing inflationary pressures, is expected to crystallise in Q4. We, therefore, expect our EBITDA (earnings before interest, taxes, depreciation and amortization) margin for 2023 to be in the range of 47-49 per cent. Capital intensity for 2023 is expected to be slightly above our medium-term target level of 18 per cent.

    Read Also: One minus one can’t make one

    The naira devaluation took a toll on the performance of the two listed companies in the country. MTN said the 68.5per cent upward movement in the exchange rate from N461/$1 in December 2022 to N777 per dollar at the end of September resulted in a higher cost of doing business. Beyond increasing the cost of doing business, MTN recorded a forex loss of N232.8billion on its net foreign currency liabilities.

    This is 157 per cent higher than the forex loss of N27.9 billion ($34.5 billion) that it had in the same period in 2022.

    Airtel’s forex loss also led to a significant decline in its PBT across all its markets in Africa. The $471 million finance cost caused its pre-tax profit to decrease —$ 516 million to $12 million — by 97.7per cent compared to its six-month result released in 2022.

    Group Chief Executive Officer, Airtel Africa, Segun Ogunsanya,  said though the firm recorded a strong growth in the earnings during the last three months ending September 30, 2023, noted that, “as reported in July 2023, our results for the first quarter were significantly impacted by the changes to the forex market in Nigeria, introduced by the Central Bank. Whilst the changes are required for the long-term benefit of the Nigerian economy, the immediate impact of the Naira devaluation continues to weigh on our reported financial performance in the period. Our focus remains to enhance long-term value by continuing to drive sustained and efficient growth.”

    Another factor is spiraling inflation which is currently at an all-time high of 27.33 per cent in October from 26.72per cent. Expectedly, the high inflation rate increased operating expenses (opex) for MTN by 34per cent — $427 million to $575 million — between 2022 and 2023.

    According to the Association of Licensed Telecoms Operators of Nigeria (ALTON), the telcom sector is the largest diesel consumer in the country, running most of its base transceiver stations (BTS) exclusively on the fuel. So, it was not a surprise that energy cost stood out as one of the major drivers of MTN’s opex.. Though Airtel was silent of its opex in the country, it is given since the telco is not immune to the harsh operating environment.

    The introduction of value-added tax (VAT) on tower leases in the Finance Act 2023 was another reason for the decline in MTN’s profit before tax (PBT).

    MTN announced in September 2023 that its tower operations will be run by the Nigerian subsidiary of the American Towers Corp. (ATC) from 2025, taking over from IHS Towers.

    The telecoms giant noted that the current license for which IHS Nigeria Limited provides its tower services is due to expire in 2024 and 2025.

    MTN, had via an official statement signed by Company Secretary, Uto Ukpanah, explained:  “MTN Nigeria Communications PLC (“MTN Nigeria” or the “Company”) hereby notifies the Nigerian Exchange Limited and the investing public that the lease of approximately 2.5k network sites, for which IHS Nigeria Limited currently provides tower services, is due to expire in 2024 and 2025.

    “In line with MTN Nigeria’s procurement policy, which seeks to ensure a transparent and competitive bidding process, the company called for tender for these tower contracts.

    “Following a review of the bids received for tower services for the affected sites, ATC Nigeria Wireless Infrastructure Solutions Limited (ATC) was selected as the preferred tower company for those sites based on its superior bid submission. ATC will take over the provision of tower services for the affected sites from 2025.”

    From the VAT on tower leases to electricity expenses, MTN said, its balance sheet remains strong with sufficient headroom to withstand macro volatilities.”

    Airtel said naira devaluation will cost it between $900 million and $950 million in annualised revenue.

  • Nigeria’s telecom sector records$2.5b cash importation

    Nigeria’s telecom sector records$2.5b cash importation

    The Nigerian telecom sector has recorded cash importation or foreign direct investment (FDI) of $2.51 billion, according to Central Bank of Nigeria (CBN) data supplied to the Nigerian Communications Commission (NCC).

    According to the record, capital inflow or FDI into the Nigerian telecoms industry in 2020 was approximately $417.48 million as against $942. 86 million in 2019.

    This translates to a decline of 55.7 per cent in capital importation year-on-year.  The decline in capital importation was largely attributed by the operators to the outbreak of the COVID-19 pandemic that distorted global businesses and impacted businesses negatively.

    FDI in 2021 was approximately $753.04 million while in 2022, it was approximately $399.91 million.

    The document also showed that as at December, 2022 total active voice subscriptions for the entire market segments stood at $222.57 million as against $195.46 million recorded as at December, 2021. This indicates an increase of 13.86 per cent in 2022.

    Teledensity was 116.60 per cent in 2022 as against 102.40 per cent recorded in 2021, which indicates an increase of 13.86 per cent in Teledensity as at December 2022.

    The increase in operators’ subscriber base was attributed majorly to the effect of the directive from NCC in April 2021 to all global system of mobile communication (GSM) operators lifting the ban on the sale and registration of new subscriber identity modules (SIMs), SIM swaps and all porting activities following the conclusion of the Commissions nationwide audit of Subscriber Registration Database.

    The objective of the audit exercise, according to the document, was to verify and ensure compliance by Mobile Network Operators (MNOs) with the set quality standards and requirements of SIM Card Registration as issued by the Federal Ministry of Communications and Digital Economy and the NCC.

    In July, the NCC had put total investment profile in the nation’s telecommunications sector, comprising FDI and local investment at $75.6 billion as of 2021.

    According to the Commission, in 2018, investment profile in the sector stood at $68 billion. This increased to $70.5 billion in 2019 and $72 billion in 2020. At the end of 2021, the figure rose to $75,560,563,417.79 ($75.6 billion). The latest figure is the current official investment profile computed in the industry up from the initial $70 billion investment in the last few years.

    Investment in the telecommunications sector is computed from two sources: the Central Bank of Nigeria (CBN), and the financial data obtained from MNOs by the Commission.

    Read Also: High-interest rates destroying telecom sector, union cries out

    While the CBN collects and calculates an element of the telecoms sector to include FDI, portfolio and others, the Commission collects investment figures from telecom licensees described as domestic investment arising from capital expenditure (capex) which forms part of the total investment in the industry.

    The NCC said the telecom sector recorded tremendous growth from an initial investment profile of $500 million as at 2001 when the sector was fully liberalised.

    The telecom sector has continued to be a major contributor to Nigeria’s economy through an impressive sectoral contribution to the nation’s Gross Domestic Product (GDP) quarterly, up from about 8.5 per cent in the third quarter of 2015, to N10.126 trillion in 2022 alone.

    According to National Bureau of Statistics (NBS) data, the telecoms sector contributed N10.126 trillion as an aggregate quarterly contribution to GDP in 2022.

    In Q1, the sector contributed 12.94 per cent equivalent to N2.246 trillion while in Q2, it witnessed an all-time high GDP contribution by the telecom sector to the nation’s economy, standing at 15 per cent and valued at N2.593 trillion. The sector’s contribution to GDP in Q3 was 12.85 per cent and in Q4, it grew to 13.55 per cent, which are valued at N2.436 trillion and N2.851 trillion respectively.

    The growth trajectory continued this year as the telecommunications and Information Services sector in Nigeria delivered a handsome N2. 508 trillion in terms of financial value contribution to the nation’s gross domestic product, GDP, representing 14.13per cent in Q1, 2023, NCC explained.

    Telecoms contribution to national GDP has continued to grow significantly, according to available data from NBS.

    From 8.50 per cent in 2015, it grew to 9.13 per cent in 2016 and to 8.66 per cent in 2017. In Q4 of 2018, telecoms contributed 9.85 per cent to national GDP while it added 10.60 per cent in the fourth quarter of 2019.

    Also in the Q2 of 2010, it added 14.30 per cent to GDP; 14.42 per cent in Q2 of 2021. The highest quarterly contribution to GDP by the sector to the economy was 15 per cent in Q2 of 2022.  

    As of May, 2023, active voice subscriptions reached 221.3 million, equivalent to 115.91 per cent teledensity, while internet subscriptions rose to 159.6 million.

    Broadband subscriptions on Third Generation (3G) and Fourth Generation (4G) networks increased to 92.2 million, representing a 48.28 per cent broadband penetration in the country.

    Also, following the issuance of 3.5GHz spectrum licences for the deployment of 5G networks in Nigeria, marked by ultra-high speed internet, low latency and high capacity, and the subsequent commercial launch by two of the three licence holders, 5G subscriptions have grown.