5G, Fintech Innovation, Will Drive Telecom Sector in 2023

Experts have predicted that 5G deployment, Fintech innovation, full implementation of Startup Act, technology skills development and data application among others, will shape the telecom sector in 2023, writes Emma Okonji

Counting the gains of telecom sector in 2022, and how it positively impacted on the Nigerian economy in the areas of GDP growth, broadband penetration, and Fintech growth, industry experts have predicted that the full deployment of 5G network across Nigeria in 2023 and the implementation of the Startup Act, will further drive Fintech innovation, technology skills development and data application among others.

According to them, the indices will be the determinant factors that will further deepen the growth of the telecom sector in 2023.   

Chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, said 5G deployment, Fintech innovation and data application would be the major drivers of the economy in 2023.

According to him, there will be increased data analytics that will inform major decision making in 2023, driven by increased data application. He said the Fintech would get more support from telecom operators in 2023 that would enable them develop more solutions that would further support financial transactions across board. He added that Fintech would ride on 5G technology, when it is fully rolled out in 2023 by licensed 5G operators, to provide bespoke solutions that would drive smart cities initiative and the digital transformation agenda.

5G Deployment, Broadband Penetration  

According to Adebayo, “The full rollout of 5G services across the country in 2023 will further drive development in the telecom sector. We expect that telecom networks will be a lot more stable in 2023, because most sites that were running on radio links are now being commissioned and re-connected to fibre optic backbone infrastructure, which will bring about better resilience and better service quality. Broadband coverage will also further increase in 2023 and provide more connectivity access to people, even though affordability of broadband access may be a challenge to most people in 2023.”

Adebayo further said all these would be driven by 5G technology deployment by the operators that have been licensed to provide 5G services in Nigeria.

Considering the rise in broadband penetration from 44.49 per cent in July 2022, to 45.55 per cent in October 2022, Adebayo said broadband penetration would further rise in 2023, given the expected rollout of 5G network in 2023. 

Nigeria recorded broadband subscription growth of 84.9 million with a penetration rate of 44.49 per cent in July 2022. In August, broadband subscription increased to 85.2 million and penetration also increased to 44.65 per cent. In September, broadband subscription rose again to 86.06 million with an increased penetration of 45.09 per cent. In October, broadband subscription also increased to 86.94 million and penetration also increased to 45.55 per cent.

Giving a projection of 5G deployment in 2023, the Chief Executive Officer of MTN Nigeria, Mr. Karl Toriola, said MTN had already rolled out its 5G network in Lagos and Abuja, with plans to launch in additional five cities in 2023, such as Port Harcourt, Ibadan, Kano, Owerri, and Maiduguri, adding that customers with certain enabled devices will be allowed to connect with and try out the new service where coverage is available. 

5G technology, also known as the fifth generation technology, is expected to bring a lot of benefits and opportunities that will engender accelerated growth and smart living in the country, when fully deployed. The technology is also expected to bring substantial network improvements, including higher connection speed, mobility and capacity, as well as low-latency capabilities. 5G is projected to contribute $2.2 trillion to the global economy by 2034, according to a 2020 GSMA Intelligence report, titled: ‘The Mobile Economy’.

In order to harness all the benefits of 5G, the Nigerian Communications Commission (NCC), the telecom industry regulator, in December 2021, successfully auctioned two lots in the 3.5GHz spectrum in a keenly contested bid process among MTN Nigeria Communications Plc, Mafab Communications Limited and Airtel Nigeria Communications. At the end of the exercise, NCC declared MTN and Mafab winners of the two frequency lots and awarded them 5G licence in 2022. In December 2022, NCC also awarded Airtel another 5G licence, bringing to three, the number of 5G licensed operators that will roll out 5G networks in Nigeria. Nigerians are therefore hopeful of full 5G network rollout in 2023 that will further drive technology innovation and development in 2023.

Fintech Innovation

Most Fintech players are optimistic that Nigeria will experience more Fintech innovation in 2023, despite its funding challenges. The Chief Executive Officer of Interswitch, a major Fintech player, Mr. Mitchell Elegbe, told THISDAY that lots of innovations would emanate from Fintrech in 2023 that would further drive development. He however said 2023 would likely come with its challenges, since its election year for Nigeria. “A lot of things are likely to come up this 2023, because it is an election year. Some serious policies from the regulator will definitely play up and lots of Fintechs are still faced with funding challenges. So the Fintechs need to put some measures in place in order to survive and grow,” Elegbe said.

Other Fintech players who spoke with THISDAY, were optimistic that Fintech would continue to be the game changer in driving innovations in the Information and Communications Technology (ICT) sector of the Nigerian economy. They are optimistic that embedded finance will determine growth in the sector in 2023.    

Founder and CEO of Kora, a plug-and-play pan-African payment infrastructure Fintech company, Mr. Dickson Nsofor, said embedded finance would enhance digital payment solutions in 2023, which Kora offers to customers. “Embedded finance is the future of payments, and we are building physical solutions to support it. Development in the financial service space is tilting towards an era where Fintechs will become embedded finance distributors by using their solutions to provide embedded financial payments,” Nsofor said.

Addressing the issue of a cashless economy in a digital era, Nsofor explained that cashless would always drag in low trust environment like Nigeria, adding that more awareness campaigns must be carried out to educate and sensitise Nigerians on the need to build trust and fully adopt the cashless initiative, despite its teething challenges.

Co-founder and CEO, Pay-U, Temitope Adeyemi, said embedded finance would spread fast across all payment platforms in 2023 and would allow customers to store financial values in relation to insurance. 

Co-founder and CEO, Anchor, another Fintech company, Mr. Segun Adeyemi, also said embedded finance would encourage organisations to have Fintech built into their business model in order to take full advantage of embedded finance, which he added would enable organisations to launch their products to a wide range of customers in 2023. 

Co-founder and CEO, Credpal, Fehintolu Olaogun, also mentioned that one of the strong drivers of embedded finance would be the opportunity for customers to pay for products over a long period of time.  

Startup Act

Following the signing of the Startup Bill into law by President  Muhammadu Buhari and the emergence of a Startup Act in 2022, the Nigeria Computer Society (NCS), the umbrella body for all Information Technology (IT) professionals in Nigeria, has called for full implementation of the Startup Act in 2023. NCS President, Prof. Adesina Sodiya who made the call, said the Startup Act, when fully implemented, would further drive technology innovations in Nigeria in 2023.

The National President of the Association of Telecommunications Professionals of Nigeria (ATPN), Adede John Williams, who commended President Muhammadu Buhari for the foresight in signing the Nigerian Startup bill into law, now an Act,

said it would harmonise the opportunity in coordinating the activities of the ICT and Fintech subsector of the Nigerian economy, when fully implemented in 2023.

“With the signing of the Startups bill into law, all ICT and Financial Technology (Fintech) related operations in Nigeria will be promoted and inspired to aid the techpreneurship and entrepreneurship spirit and growing investment portfolio as one of the cardinal objectives of this administration. It will promote self-reliance, job creation, and raise men and women who will become employers of labour. In my view, and in the views of our members, the development will be seen as a very big departure from the current trend in the country where everyone is busy looking for white collar jobs that do not exist,” Williams said.

Williams said with the enactment of the Act, it would empower a pool of ICT skills and competent manpower that could be successfully deployed beyond the shores of Nigeria in 2023, which would attract foreign direct investments from the already established national and international ICT companies in the country.

“Now that we have gotten the Nigeria Startups Act fully backed by law, government can create the enabling environment for the growth of the Startups in the country. I therefore challenge the 36 state governors in Nigeria and the FCT Minister to key into the national technology ecosystem initiative to establish ICT Development Agency through their various States Houses of Assembly, to further strengthen the Startups Act and position it to boost economic development in Nigeria in 2023,” Williams further said.

2023 Elections

NCS President, Prof. Adesina Sodiya said NCS would be more involved in the 2023 general elections, which he termed technology driven election that will drive  electoral processes in Nigeria.

According to him, the Independent National Electoral Commission (INEC) has done a lot in infusing technology with electoral process, through the introduction of Bimodal Voter Accreditation System (BIVAS) and electronic transmission of election results from polling units, directly to INEC’s portal. Sodiya however stressed the need for the involvement of Information Technology (IT) professionals from NCS, to ensure a successful and hitch-free election in 2023.

“INEC should realise that no technology driven system is completely perfect and that is the reason why NCS is interested in collaborating with INEC to achieve a near hitch-free election in 2023. NCS has various experts in IT security and development and we are willing to release our IT professionals to work with INEC in the 2023 general elections to assist INEC to serve as election observers and to help assess the performance of BIVAS before the election begins in February next month,” Sodiya said. He further explained that this would be the first time that INEC will be using technology to conduct nationwide election, and therefore called on INEC to partner with NCS, in order to achieve a credible election for Nigerians.     

ICT Parks

Giving details about how ICT parks and government policies will drive development in 2023, the Executive Vice Chairman, Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta, has said government policies and the ICT Parks initiative of the NCC will drive development in the telecom sector in 2023 in a very unique way.  

According to Danbatta, the National Digital Economy Policy and Strategy (NDEPS 2020-2030), which seeks to fast-track digital development and empower Nigerians with the right technology skills, will drive development in 2023, adding that the ICT Parks initiative of the NCC, will further ride on the NDEPS policy to enhance digital transformation in 2023.

The ICT Parks, which are planned to be established in each of the six geopolitical zones, are expected to boost youth digital skills acquisition, promote innovations, provide jobs for the teaming Nigerian youth and ultimately support the overall digital economy agenda of the federal government, when completed in 2023.

According to Danbatta, the four main objectives of establishing the ICT Parks are to provide Innovation Labs and Digital Fabrication Laboratories (Fablabs) for use by ICT innovators and entrepreneurs; provide a Commercial Hub for ICT capacity building and digital skills; create employment and entrepreneurial activities; and facilitate smart city deployment across the digital industrial complex.