• Tuesday, June 25, 2024
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BusinessDay

As MTN crosses the 60m subscriber milestone (1)

MTN MoMo users drop on NIN linkage

As I write this, there is no doubt that MTN has crossed the 60 million subscriber landmark. It has not announced it yet, but its antecedents are unequivocal. By the end of June 2014, according to the Nigerian Communications Commission (NCC), MTN had 58,516,759 active subscribers. Judging by the average rate at which the telco has grown over the last few years amassing over a million additional active subscribers in each of the quarters of the second half of the year, MTN has certainly hit this milestone.

60 million active subscribers is a formidable achievement and a far-cry from the day when at 60,000 subscribers, MTN called a press conference to announce to the world how much progress it had made. Could those bright-eyed execs have imagined that just a little over a decade later, they would be celebrating the attainment of 60 million subscribers? Did any analyst anywhere on earth believe that the Nigerian market was sufficiently robust as to enable a single player amass 60 million subscribers?

MTN’s milestone is a testament to the beauty of market liberalization and excellent regulation. Less than 15 years after the telecom industry was liberalized and opened up to private sector participation under the guidance and active oversight of a regulator which understands the delicate nature of protecting multi-stakeholder interests, Nigeria is recording the kind of progress in the telecom industry previously unimaginable. According to the NCC, the telecom industry has been responsible for an inflow of foreign direct investment in excess of US$25 billion so far.

Undoubtedly, if it weren’t for the capital market regulations that restrict the holding company, MTN Group, from announcing these figures except at specific financial quarters of the year, MTN would have since gone to town to make substantial public relations capital of this achievement. There would have been snazzy ads in newspapers and across hundreds of billboards as well as dozens of radio and television stations in the country celebrating the milestone and thanking Nigerians for their support and patronage. There may even have been an awesome “collabo” by its growing bevy of musical superstar brand ambassadors.

Clearly, the social and economic empowerment that is attendant to the ability to communicate in the way telecommunications makes possible is phenomenal. Whether it is by drastically reducing transaction costs or availing people of economic opportunities; whether it is by driving innovation or by fostering closer relationships; whether it is by enhancing economic productivity or creating jobs, telecommunications is a potent force for economic growth and development. Indeed, economists say that its potential to facilitate GDP growth is greater the lower the country is on the development ladder.

Read also: MTN introduces special tariff plan for subscribers

But telecom’s impact on development goes even deeper than the aforementioned and their related economic spin-offs. MTN, for instance, has invested in infrastructure across Nigeria, to the tune of several billions of dollars. Apart from its record over 10,000 base stations, it has long erected fibre-optic transmission networks across the country and within specific cities. Its transmission backbone provides a critical intermediary platform for practically every other industry in Nigeria from oil and gas to banking and finance, from agriculture to defence and security.

Yet, this is the same company whose foray into Nigeria was derided by analysts across the world a little over 13 years ago, especially upon paying the US$285 million digital mobile licence fee that was considered too expensive for a “poor” country like Nigeria.

While MTN’s achievement is no doubt formidable, the achievement of other players in the telecom space bears mention as well. Etisalat, whose promoters were far-sighted enough to commit US$400 million for a digital mobile licence in Nigeria many years after the initial players who had paid much less had become entrenched in the market space, now has in excess of 20 million active subscribers. The combination of Airtel and Glo is also responsible for more than 50 million telephone subscribers across Nigeria.

Overall, the telecom industry pays close to N300 billion to the government in taxes annually. The taxes comprise annual operating licence fees, VAT, Rights of Way, state taxes as well as federal taxes and sundry other levies.

The success of the telecom sector, manifested in increasing subscriber numbers and, by extension, enhanced telecom penetration, has spawned a huge multiplier effect across practically every sector, including government. Today, the digital route is fast evolving as the preferred means of engagement between government agencies and the citizens, business enterprises and even government establishments themselves. The use of electronic payments for public sector transactions is fast catching on and is quietly plugging some of the leaks and waste (read corruption) that hitherto existed. In the area of education, for instance, it is increasingly common to have examination results released within a few weeks and uploaded onto the Internet for students to access.

The challenges of rolling out telecom infrastructure across Nigeria have been detailed so many times that followers of the industry’s trajectory may wonder if doing so again would achieve any effect. But repeat those challenges we must, if we are to correctly situate the context of MTN’s achievement and the achievement of the overall telecom industry.