• Tuesday, May 28, 2024
businessday logo

BusinessDay

Telecommunication sector shows strength

As the country celebrates 54 years of independence Wednesday, and 15 years of uninterrupted democracy, the nation’s telecommunication sector has witnessed a tremendous change and achievements during the democratic period.

The sector is adjudged an indispensable catalyst for the development of all other sectors in the country.

The democratically elected government in 1999 showed keen interest in the full liberalisation of the telecommunication sector. 

The licensing of the Global System for Mobile Communications (GSM) by the Obasanjo administration saw three firms emerged, ECONET Wireless Nigeria, Mobile Telephone Networks (MTN) Communications and M-Tell Nigeria.

The new GSM licences, which were awarded for a period of five years, were renewable, and all operators operated on the 900Mhz and 1800Mhz spectrum bands.

Democracy has fostered the growth of the country’s telecommounication/ICT industry because of its characteristic feature of policy consistency.

According to Lanre Ajayi, president, Association of Telecommunication Companies of Nigeria (ATCON), investors had more confidence in the democratic system of government, hence, their massive investments in Nigeria’s telecom industry.

 “This is because the investors realised that if they put their money down, the returns on their investments are quite higher because there is more stability under democracy,” he further stated.

 “Under military regimes, another military ruler can come and reverses existing policies, but democracy guarantees some level of stability as well as creditability, and investors are more willing to invest in democratic countries,” he added.

 The recently released GDP report by the National Bureau of Statistics (NBS) shows that the telecommunication sector posted the strongest growth in the non-oil sector at 6.2 percent y/y and the private sector consumption has being identified as the single largest growth driver in the expansion and development of Information Communication Technology (ICT) in the country.

Nigeria remains a key market for telecos. Research from London-based Informa Telecoms & Media estimates that cell phone user number will grow to more than 200 million in Nigeria over the next three years.

According to the data from the Nigerian Communication Commission (NCC) web site, GSM network serves 124.88 million subscribers in the country.  

After rebasing of the GDP the Information and Communication contributed 6.0 percent to GDP compare to its 0.27 percent it contributed to GDP prior to the rebasing.

Analysts attribute growth in the movie industry to the rising internet usage and smartphone penetration in the country, as Nigerians are now able to patronise Nollywood video-on-demand (VoD).