The new released Agusto & Co’s 2021 Telecommunications Industry Report has lauded the regulation of the sector by the Nigerian Communications Commission (NCC), which has attracted foreign investment of $3.9 billion.
Between 2015 and 2020, foreign investments (portfolio and direct) attributable to the telecommunications industry amounted to $3.9 billion, an average of seven per cent of Nigeria’s total capital importation during the same period.
According to Nigeria’s telecommunications industry has continued to thrive on the back of the liberalisation in the early 2000’s. The industry has consistently remained one of the top five ranking economic sectors for foreign investments during the period.
The use of mobile phones has grown exponentially due to the smart phone revolution, a continuous upgrade of network infrastructure and improving quality of service.
The latest technology – the fifth generation (5G), despite launch drawbacks due to the COVID-19 pandemic is commercially available in about 40 countries so far including Kenya and South Africa. Agusto & Co expects that the 5G technology will be commercially available in Nigeria by mid-2022.
Agusto & Co believes the imminent deployment of fifth generation (5G) technology and the federal government of Nigeria’s target broadband penetration rate of 70 per cent by 2025, will support substantial additional foreign investments in the near to medium term.
The report said due to key connectivity support the industry provides, telecommunications was one of the economy’s few bright spots in 2020 (along with sectors such as financial institutions, agriculture and health services). Except during the 2016/2017 economic recession, the telecommunications industry’s real growth has consistently exceeded the country’s gross domestic product (GDP) growth.
Furthermore, value-added services provided by telecommunications companies, albeit still a low contributor to overall earnings, has continued to expand. In 2020, two mobile network operators (9mobile and Globacom) were granted payment service bank (PSB) licenses while MTN’s MoMo agency service which commenced in 2019 has about half a million agents across the nation.
In Nigeria, the proportion of mobile internet users to mobile phone subscriptions increased from 69.1 per cent in January 2020 to 75.4 per cent as at December 2020. Agusto & Co expects the country’s telecommunication consumption pattern to be sustained in the near-term given lingering concerns around the emergence of COVID-19 variants.