Telecoms Sector Remains Game Changer in Economic Transformation

Emma Okonji

The Information and Communications Technology (ICT) sector, no doubt, has the potential and capacity to transform the Nigerian economy and make it competitive with the global economy in today’s digital transformation era, given its growth antecedents.

At independence in 1960, Nigeria had a paltry 18,724 telephone lines, with a population of 40 million people, translating to a teledensity of 0.5 per cent. In 2001, when the Global System for Mobile communication (GSM) was launched in Nigeria, telephone lines, which were controlled under a monopolistic market by the Nigerian Telecommunications Limited (NITEL) and a few other Code Division Multiple Access (CDMA) operators, were still within 400,000 in number and they were owned only by the affluent in the society.

Between 2001 and 2006, the Nigerian Communications Commission (NCC), the telecom industry regulator, deregulated the telecom industry and granted five years exclusivity period to GSM operators, a development that suddenly pushed the number of telephone lines from less than 400,000 in 2001 to over 10 million in 2006, thus giving opportunity for all Nigerians to own and operate a mobile telephone.  

Speaking about the trajectory of the evolution of telecom in Nigeria, concerning the nation’s growth, the Executive Vice Chairman of the NCC, Prof. Umaru Garba Danbatta, said as of July 2022, active telecoms subscribers have grown significantly hitting 209 million active subscribers, which represents a teledensity of 109.47 per cent. 

“Besides, basic internet subscriptions have also grown from zero in the pre-liberalisation era to over 152 million. It is also gratifying that the broadband subscriptions now stand at 85 million, representing a 44.49 per cent penetration,” Danbatta said.

Today, “the Information and Communication Technology (ICT) sector contributed 18.44 per cent to the nation’s Gross Domestic Product (GDP) in the second quarter of 2022. From this figure, the telecommunications sector alone contributed 15 per cent,” Danbatta further said to place on record the unprecedented contribution of the telecom and ICT industry to Nigeria’s GDP.

Chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Mr Gbenga Adebayo said the telecom sector has continued to reduce the cost of its service deliveries, even amid inflation and economic hardship, thus making it possible to connect more Nigerians and offer them the opportunity to transact online, to boost e-commerce. According to him, “In 2001, the cost of voice calls was N50 per minute, but today, it has dropped to less than N20 per minute, while the cost of SMS messages has equally dropped from N15 per text message in 2001 to N4 per SMS in 2022.  The telecom sector is the only sector that supports virtually all other sectors of the economy.”  

The ICT sector has to a large extent, developed the financial sector, through the Financial Technology (FinTech) operators. The Fintech operators have positively disrupted the banking sector, through their innovative technology solutions that have changed the face of financial transactions in the financial sector. With Fintech solutions, mobile apps have been developed that allow bank customers to carry out almost all financial transactions from their mobile phones and in the comfort of their homes and offices, without visiting any physical bank.