Driving Nigeria’s Telecoms Revolution with Passion
At 71 years, the Chairman of Globacom, Dr Mike Adenuga Jnr is passionate about driving telecoms revolution in Nigeria, despite the many challenges faced by the telecoms industry, writes Emma Okonji
The telecoms industry, which has contributed immensely to Gross Domestic Product (GDP) of the country, with a strong boost towards job creation, no doubt, is faced with myriad of challenges that are threatening to erode the gains of telecommunications across the country.
Telecoms operators have raised concerns about the challenges, which include low telecoms tariff framework, infrastructure deficit, multiple taxation and regulations, Right of Way (RoW) charges, inadequate electric power supply and vandalism of telecommunications’ infrastructure, among others.
Worried about the challenges facing telecoms industry in Nigeria, the Association of Licensed Telecoms Operators of Nigeria (ALTON) and the Association of Telecommunications Companies of Nigeria (ATCON), which represent Mobile Network Operators (MNOs) and telecommunication companies in Nigeria, last week, called on the federal government to take decisive action in addressing the many challenges confronting the telecommunications industry in the country.
According to the associations, despite the adverse economic headwinds, the telecommunications industry remains the only industry yet to review its general service pricing framework upward in the last eleven years, primarily due to regulatory constraints. They are of the view that for a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence.
ATCON and ALTON therefore called on the government to facilitate a constructive dialogue with industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with operators’ financial viability.
But in all of these daunting challenges facing telecoms operators, Globacom has remained passionate about sustaining telecoms revolution and ensuring that telecoms consumers have real value for all telecoms services rendered by telecoms operators, which are paid for by the consumers.
It all started with the introduction of per second billing system at the very inception of Globacom’s entrance into the telecoms industry in 2003, at a time when existing telecoms operators were billing in minutes and rounding off every call that ended in seconds, into minutes, and compelling consumers to pay in minutes for all voice calls.
Per Second Billing
Per second billing system, which all telecoms subscribers are currently enjoying across all networks, was introduced by Globacom in 2003, when it rolled out its telecoms services to the Nigerian subscribers. Before 2003, the existing telecoms operators were billing in minutes and were rounding off every call that ended in seconds into minutes and the subscribers were charged in minutes. At that time, if a call ended in five minutes and one second, the call would be automatically rounded off to six minutes and the subscriber is charged for six minutes in line with the call rate. Although telecoms subscribers saw it then as a rip-off, and wondered why calls that ended in seconds were billed in minutes, but the existing operators told them that the billing system had already been configured to charge in minutes and that it was not possible to change the billing system to per second billing.
The narrative however changed when Globacom came up with per second billing system from the inception of its service rollout in 2003, a development that forced other operators to immediately changed their billing system to per second billing and till date, all telecoms subscribers are enjoying per second billing system, that allows them to pay for the exact time spent on a particular call, which translates to paying less, compared to per minute billing system.
Affordable Internet Service
With the landing of Glo 1 submarine cable in 2010, Globacom was able to crash the cost of internet service in Nigeria, thereby giving access to more Nigerians to connect to the internet and deepening broadband penetration in the country.
Currently, Nigeria has over 164 million active internet subscriptions, with majority of the subscriptions linked to GLo1 submarine cable.
Internet connectivity from various submarine cables like Glo 1, West African Submarine Cable (WASC), African Coast to Europe (ACE) submarine cable and MainOne submarine cable, which have landing points at the shores of Nigeria, have been providing stable internet access to various Internet Service Providers (ISPs) across the country, until some of the cables had major disruptions in March this year, except Glo1, which remained resilient and unaffected.
On March 14, 2024, 13 African countries, including Nigeria, faced internet disruptions as a result of major cuts on the affected subsea cables which led to operational downtime for all businesses connected to the internet, including banks, where bank customers could not carry out banking transactions for hours.
Internet Service Providers (ISPs), as well as broadband connectivity providers, that were connected to the affected submarine cables, were completely disconnected from the internet and from the broadband connections, as they could not provide connectivity access to their customers in banks, schools, churches, mosques, business centres, call centres as well as to organisations across different sectors of the economy.
The disruption was caused by multiple cuts in the submarine cable around the coast line of Senegal and Cote d’ Ivoire.
The affected 13 countries include: Cote d’ Ivoire, Liberia, Benin Republic, Ghana, Burkina Faso, Togo, Cameroon, Gabon, Namibia, Niger, Nigeria, Lesotho, and parts of South Africa.
The affected submarine cables came from Europe, and passed through the East Coast of Africa. The West African Submarine Cable (WASC), African Coast to Europe (ACE) submarine cable and MainOne submarine cable that have landing ducts at the shores of Nigeria, were affected by the multiple cuts.
But Glo1, which has so much resilience and capacities to connect and provide internet access, was not affected in any way. During the period of massive internet disconnections, Glo1 was still providing uninterrupted internet services to its customers, thereby making it possible for all ISPs connected to the Glo1 submarine cable to be able to provide internet services to all their customers, including banks that are connected to the ISPs that are directly linked to Glo1 submarine cable.
The Glo1 is a 9800km submarine cable connecting Bude in United Kingdom (UK) to Lagos in Nigeria and the rest of West Africa, with landing points in Nigeria, London, Lisbon in Portugal, Accra in Ghana, among other West African countries.
Market Share
Although Globacom was the third entrant into the Global System for Mobile Communication (GSM) market in Nigeria, having launched its telecoms services in August 2003, the telecoms company soon became the second largest telecoms operator in Nigeria in terms of subscriber base and market share, a position it maintained for several years up till early 2024.
The latest statistics on telecom’s market share released by the Nigerian Communications Commission (NCC), however rated Globacom as the third largest telecoms operator in Nigeria, with a subscriber number of 62,191,448 and a market share of 28.40 per cent as at March, 2024.
Financial Inclusion
Encouraged by the positive development in the banking sector, the Central Bank of Nigeria (CBN), launched the Financial Inclusion Strategy in October 2012, which seeks to drive financial inclusion in Nigeria. From the inception of financial inclusion in Nigeria, the CBN excluded telecoms operators from driving the initiative, even though it was driven on the platform of telecoms infrastructure, a development that made the financial inclusion initiative bank-led.
Having witnessed a slow growth in the bank-led financial inclusion initiative, CBN further opened the space between 2020 and 2022, by licensing telecoms operators as Payment Service Banks (PSB), to operate mobile money that will further drive financial inclusion in Nigeria.
While CBN licensed 9mobile as 9PSB, Airtel as SmartCash PSB and MTN as MoMo PSB, it also licensed Globacom as MoneyMaster PSB.
Following the approval granted Globacom to operate MoneyMaster Payment Service Bank (PSB) by the CBN in 2020, the telecoms company, in 2022, launched G-Kala, its flagship product that would further drive the activities of MoneyMaster PSB and deepen financial inclusion across the country.
According to Globacom, the launch of G-Kala is in line with its commitment to deepen, stimulate the growth of digital payment in Nigeria, and to bridge the country’s financial inclusion gap.
In a statement shortly after the launch in Lagos, the telecom company said: “Our over-arching business objective remains to empower Nigerians by providing them with unlimited opportunities. MoneyMaster extends that objective as it targets the unbanked and under-banked with G-Kala its flagship product in order to deepen financial inclusion in Nigeria.”
Just as Globacom revolutionised the telecoms industry with cutting-edge technology and unique products when it started operations in 2003, MoneyMaster PSB has redefined the payment service banks’ landscape while driving financial inclusion in Nigeria.
Since the launch of MoneyMaster PSB in 2020, the telecoms company has unveiled various suite of innovative and cutting edge business solutions that have helped the unbaked in rural community to carry out safe and secured financial transactions.
With its agent banking platform, Globacom has empowered over 100,000 agents across Nigeria to further deepen financial inclusion in Nigeria.
GDP Growth
From the inception of GSM services rollout in 2001 up till 2015, telecoms contribution to GDP was put at $70 billion, a development that was made possible by Globacom and other telecoms operators.
But that figure had since been surpassed according to statistics released on the website of the Nigerian Communications Commission (NCC), the telecoms industry regulator.
According to NCC, the contribution of the telecommunications sector to Nigeria’s Gross Domestic Product (GDP), doubled in the last 10 years. GDP in 2012 was 7.7 per cent, but the figure doubled to 14.3 per cent as at the second quarter in 2020.
The statistics indicated that telecoms contribution to GDP had maintained a steady growth rate between 2012 and 2020, excerpt for 2013, when there was a drop in the contribution, compared to the contribution in 2012.
But it picked up again in 2014, contributing 7.6 per cent to GDP. In 2015, telecoms contribution to GDP further increased to 8.5 per cent and it had another increase in 2016, contributing 9.13 per cent. In 2017, it contributed 8.7 per cent to GDP and in 2018, telecoms contribution to GDP grew to 9.9 per cent.
In 2019, telecoms contribution to GDP grew again to 10.6 per cent and in second quarter 2020, telecoms contribution to GDP, reached 14.3 per cent, representing N2.3 trillion, whereas the entire contribution of ICT to GDP within the same period was 17.5 per cent.
The latest report on telecoms contribution to GDP shows that it increased from 14.3 per cent in the second quarter of 2020 to 14.42 in the second quarter of 2021 and further increased to 15 per cent in second quarter of 2022, before increasing again to 16.06 per cent in second quarter of 2023. It however dropped to 13.50 per cent in the third quarter of 2023, according to the latest industry report from the NCC.
Job Creation
The Nigerian telecommunications sector has significantly impacted both direct and indirect job creation since 2001.
The sector has directly employed a substantial number of people. Telecoms Operators like Globacom, MTN Nigeria, Airtel Nigeria and 9mobile have contributed to job creation by hiring staff for various roles, including customer service, technical support, sales, and management.
The expansion of telecoms networks has led to the construction and maintenance of cell towers, fiber-optic cables, and other infrastructure. These projects require skilled workers, contributing to direct employment. Telecom operators also rely on retail outlets and distribution centers to sell SIM cards, recharge cards, and other services. These outlets employ sales representatives, cashiers, and administrative staff.
In the area of indirect jobs, the telecoms sector stimulates job creation in related industries. For example, manufacturers of telecoms equipment, such as smartphones, routers, and antennas, employ workers. Additionally, logistics companies handle the transportation and distribution of telecoms products.
Indirect jobs are created through service providers like call centres, repair centres, and maintenance teams. These entities support telecoms operations and provide employment opportunities.
As the telecoms sector grows, it generates demand for goods and services across various sectors, thus creating ripple effects that lead to additional job opportunities in areas like transportation, hospitality, and retail.
The telecoms sector’s growth has positively influenced Nigeria’s economy, and it has contributed to GDP growth, infrastructure development, and increased connectivity. Despite being a late starter in technology investments, the industry has made significant strides.
With the contributions of Globacom and other telecoms operators, the Nigerian telecoms sector has been a beacon of hope, fostering job creation directly within the industry and indirectly through its ripple effects on the broader economy.
