• Thursday, December 07, 2023
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BusinessDay

Huge appetite for mobile data to drive telecoms growth

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 Big appetite for mobile data services in the country, driven essentially by the proliferation of smartphones and affordable data bundles, will be the growth engine for Nigeria’s telecommunications market in the next two years, industry analysts have said.

“We have continued to witness significant growth in our data business. “Year-on-year, we have seen growth in excess of 100 percent. The data business is going to be a lot more important than voice in the near future. We are seeing huge demand for data services. This has informed further investment in our 3G network”, Wale Goodluck, corporate services executive, MTN Nigeria told BusinessDay in an interview.

Data traffic is improving, even if the value lags, growing 83 percent quarterly in Q1 2012, according to BuzzCity, a Uk-based mobile advertising firm. “Overall, there is a general shift to data services from voice, where revenues are starting to plateau. There is a growing focus on data plans and operators want handsets to reflect this”, James Rutherford of Nokia Corporation was quoted in an industry report. “Prices of smartphones are likely to decline. The sub-$100 smartphone is steadily becoming a reality. Low-end smartphones are increasingly available and these types of phones will likely grow at a compound annual growth rate of 15 percent over the coming years.

“Data services will increase dramatically among the target market between the ages of 12 and 30”, he said. Voice services, according to the industry analysts, remains the main revenue stream for mobile network operators with Nigerians spending an estimated N2.14 trillion on voice calls and Short Messaging Service (SMS) between January, 2011 and December, 2012.

This trend, analysts told BusinessDay, is likely to change in no distant time, as telecoms operators step up investments in fibre infrastructure and adoption of new technologies. The telecom regulator is also working on a broadband policy based on ‘Open Access’ to encourage infrastructure sharing.

The above figure is based on an industry Average Revenue per User (ARPU) of N912 monthly spend by telecoms subscribers on MTN, Globacom, Airtel, Etisalat, Visafone, Starcomms, and Multi-Links network. Nigeria currently has 113 million active mobile lines, according to recent data from the Nigerian Communications Commission (NCC). The low Personal Computer (PC) and fixed broadband penetrations in Nigeria, according to the analysts, combined with smartphone price reductions and affordable mobile data plans contributes to increasing adoption of mobile broadband. MTN Group results for the year ended 31 December 2012 further buttresses this point.

The results shows that “data revenue (excluding SMS) increased by 111.6 percent (247.8 percent) in naira supported by the availability of affordable data-enabled devices (both GPRS and 3G).”During the year, according to the financial report, a total of 3.8 million smartphones and 201, 000 dongles were active on the network. This, MTN said was achieved through partnerships with independent device resellers, free SIM cards, and data bundle offers, as well as the refitting of service centres to make them device oriented. MTN Nigeria also saw strong growth in Blackberry subscriber revenues. Similar growth was witnessed on other networks in 2012.

 

BEN UZOR JR