The Nigerian telecommunications sector is on an upward trajectory adding about $4 billion to $5 billion on quarterly basis to the gross domestic product (GDP) which is equivalent to one to two per cent growth in foreign direct investment (FDI) inflow on quarterly basis.
Executive chairman, Nigerian Communications Commission (NCC), Professor Umar Danbatta disclosed this yesterday in his welcome address while wooing foreign investors at the opening of the Nigerian Pavilion and Investment Spotlight at the ongoing ITU Telecom World 2018 organised by the International Telecommunication Union (ITU) in Durban, South Africa.
He also revealed that the federal government is offering 30 per cent tax rebates as well as three years pioneer status to foreign investors in addition to other incentives such as subsidies for investors in broadband infrastructure.
The event was graced by hundreds of investors and telecom experts from across the globe including Mr. Houlin Zhao, secretary-general of ITU; Mr. Rob Shuter, CEO/President, MTN Group; High Commissioner of Nigeria to South Africa; Mrs. Nkechi Ejele, permanent secretary, Ministry of communications; Chairman of the NCC Board of Commissioners, Senator Olabiyi Durojaiye, among others.
Danbatta said these in addition to other attractions has made the Nigerian telecommunication market a-go-to for foreign investors seeking quick returns on their investments. With a population of 180 million, active subscriber base of 162.3 million and internet penetration of over 100million, Nigeria remains an attractive Country for investors who crave for adequate Return on Investments (RoIs).
Despite the huge growth recorded so far, the Nigerian telecom sector voice penetration is still about 50 per cent while broadband penetration is 22 per cent. The quality of service is still far from desirable, which are key attractions for investors. Nigeria needs 120,000km metropolitan optic fibre coverage for ubiquitous network connections nationwide.
With only 38,000km coverage now, this area also beckons on both foreign and local investors. There are also opportunities for investors in Digital transmission system including microwave, satellite and optic fibre; Submarine cable Communications; Digital Exchanges for both wired and wireless lines; Billing systems; Data Communications Networks; Broadband and Integrated Service Digital Network (ISDN).
“In our modest quest to bridge the digital divide, the board of the NCC has put in place initiatives to fast track internet access and taking services to several unserved and underserved areas of Nigeria Although we have 162.3 million active subscribers on our various networks, we at NCC believe there is much left to be done in terms of improvement of Quality of Service, more access to as many people as possible.
The telecom regulator admitted that Nigeria’s telecom sector’s quality of Service is not where he wants it to be yet, but with time and increase of infrastructure deployment, the industry should be there soonest than later. Only recently, the Vice President of Nigeria, launched the ICT Roadmap in Nigeria to drive broadband penetration for accelerated economic growth.
Foreign investors on their part yesterday expressed interest in coming to Nigeria to invest in the telecommunications sector following the juicy incentives including tax rebates of 30 per cent and pioneer status being offered by the federal government. The said Nigeria still remains the most attractive market. Investors asked questions on broadband infrastructure as well as ancillary services like phone repairs.
Rob Shuter, CEO/President, MTN Group who participated at the Nigerian Investment Spotlight allayed fears of the South African community who were apprehensive of the current demands from MTN Nigeria by Nigeria’s apex bank and tax authorities. He said MTN and NCC are in touch aimed at resolving the issues with the relevant authorities.
To deepen broadband penetration, Nigeria has the Open Access Model template wherein it has licenced six infrastructure Companies (Infraco) to cover Lagos, North East, North West, South South, South West and South East zones of the Country. Arrangements are underway to re-licence the North Central zone.
Nigeria through NCC had earlier assigned 2.3GHz licence to Bitflux Consortium and six of the 14 slots available on 2.6GHz to MTN Nigeria and two slots to Openskys. Six slots are still available for assignment. The country has a National Broadband Plan (NBP of 2013-2018) where it is anticipated that 30 per cent penetration will be attained, by the turn of 2018 through various initiatives including granting subsidies to Infraco licencees, Spectrum Trading, among others.