Weak consumer purchasing power, government policies hold back the telecoms sector in the third quarter | The Guardian Nigeria News


… The sector’s contribution to GDP falls by 2.48% in the third quarter of 2021

The contribution of the telecommunications sector to Nigeria’s gross domestic product (GDP) fell 2.48% in the third quarter of 2021.

Statistics from the Nigeria Communications Commission (NCC) showed the figure rose from 14.42 percent in the second quarter of 2021 to 11.94 percent in the third quarter of 2021. Audits showed that during the same period in 2020, the contribution was 11.2 percent.

Industry analysts hinged the decline on several factors, including the federal government’s NIN-SIM policy; Twitter ban, low consumer purchasing power and average income per user (ARPU).

Specifically, the NIN-SIM mandatory exercise, which began in December 2020 and whose deadline has been shifted by about eight times now, with the most recent now on March 31, cuts more than 15 million telephone lines from the network. . This has affected the incomes of telecommunications operators and their contributions to the economy.

An analyst, who requested anonymity, said the decline in the sector’s contribution to GDP during the quarter reflected investor concerns over the situation in the country, as well as uncertainties surrounding political issues in the sector.

According to him, there is a need for people-centered policies that would assure investors that the industry is safe and reliable.

He pointed out that there are already challenges related to End User Certificates (EUCs), multiple taxes and the illegal closure of the towers housing these base stations, the security and protection of the facilities and the lack of ‘electricity, “all this aggravates the problems of The sector.”

According to him, all telecommunications facilities must be treated as critical national infrastructure (CNI) with immediate effect “before we can seriously develop a digital economy in its true sense.”

From his perspective, the Affordable Internet Alliance (A4AI) Nigerian coordinator Olusola Teniola said the impact of the NIN-SIM policy has rippled through the numbers for the third quarter of 2021 and continues to grow. still felt in conjunction with a reduction in consumer spending due to job losses and unemployment and the impact of the delta variant of COVID-19.

Essentially, he said the trend has stabilized year-on-year and remains within a growth slowdown seen on Q-on-Q numbers for 2021.

He told the Guardian that the average revenue per user (ARPU) remains stable, noting that the minutes used per subscriber and the number of subscribers have declined.

According to him, the high-end of the market has a mixture of Over The Top (OTT) usage relative to the stable voice market, so data usage is the determinant of stable revenue in the market, “otherwise , the trend is flat to negative as expected. “

Teniola, former chairman of the Association of Telecommunications Companies of Nigeria (ATCON), said the figures for the fourth quarter of 2021 are sensitive to FG policies. “It needs Twitter, other digital services and applications to deliver increased consumer usage following the 5G rollout around Q2 2022. FG needs to take a lean regulatory approach to ensure that any potential momentum in the market is not severely depressed. “

Regarding the OTT challenge, Airtel once told investors that young Nigerians, estimated at over 100 million, have turned to the internet for recreation and education in recent years. The telecommunications company stressed that these digital natives will redefine the telecommunications market with their preferences for internet calls over regular phone calls.

Already, a report indicates that more than 300 million voice and video meetings are held daily on Zoom. WhatsApp and Facebook Messenger users make over 700 million calls every day. 400 million people send billions of text messages with Telegram.

The report notes that globally, these services wipe out billions of dollars in revenue for telecommunications companies while thriving on telecommunications infrastructure.

On this topic, another telecommunications expert, Kehinde Aluko, said that unlike telecommunications operators, digital communication platforms do not face significant regulatory challenges. He said that using WhatsApp for cross-border communications does not incur additional costs and does not require WhatsApp to develop special infrastructure in each country.

“Telecom operators face a different reality. Companies must acquire a license to operate in any country. They incur new licenses and costs to operate different broadband, spectrum and develop their infrastructure for each country in which they operate, ”he said.


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