Patricia Ogele, a 24-year-old sales girl, had reduced her expenses since November 2022 in a bid to get a smartphone for herself around August of this year. But her plan was thwarted by stubbornly high inflation, which has worsened the cost-of-living crisis in the country.
According to Ogele, everything changed when she could no longer afford transport to work after the cost of transport doubled, and she had to start dipping into her savings.
“I think many people are not talking about projects this year. Being able to afford basic needs is already a project in the country. All plans to get myself a good phone have failed. I earn just N35,000, which is barely enough to last me for the month. I had no option but to get something similar to the Nokia 3310 for N8,500 as that was what I could afford,” she said.
Data from the National Bureau of Statistics show that inflation soared to an 18-year high of 25.80 percent in August from 24.08 percent in July.
The rising cost of living has diminished consumers’ buying power, forcing a growing number of individuals to opt for older second-generation (2G) devices as they are unable to afford modern alternatives.
According to the Nigerian Communications Commission (NCC), 2G continues to be the dominant technology in Nigeria’s mobile market with 60.32 percent of the country’s 220.36 million mobile subscriptions on the 2G network as of August 2023 compared to 58.36 percent in May 2023.
This increase comes as a result of the economic downturn, which has left many individuals and families struggling to afford high-speed internet plans and modern smartphones.
“During times of economic uncertainty, we typically see a shift in consumer behaviour as people look for ways to tighten their budgets,” said Sarah Johnson, a telecommunications industry analyst.
“The shift towards 2G services and devices is a clear example of this trend. Consumers are prioritising basic communication needs over data-hungry applications,” she added.
The NCC data show 28.07 percent of those subscriptions were on 4G; 10.78 percent on 3G, and 0.83 percent on 5G, indicating low smartphone ownership in the country, despite sustained network investments by telecommunication companies (telcos) in the country.
Statista, a market data and research portal, reveals that only about 10 to 20 percent of the Nigerian population own a smartphone.
Alliance for Affordable Internet estimates the number of Nigerians with access to smartphones at 44 percent.
However, MTN disclosed that the number of smartphones on its network increased by 1.8 million in the first half of 2023, bringing its smartphone penetration to 53 percent.
One of the reasons for keeping 2G and 3G alive is the wide coverage it gives the telcos.
Ralph Mupita, president and CEO of MTN Group, in a recent report, said: “Out of its 289 million subscribers as of 2022, 92 percent of its population coverage are still on 2G, 84 percent are on 3G, 79 percent on 4G, and 4 percent on 5G.”
Various sources say rising prices for phones is a major issue. Many people, particularly those on the lower rungs of the economic ladder, still use feature phones, and they form the majority. Those on the higher rungs of the ladder use smartphones.
“3G phones are for people who can afford a meal somewhat. But poor people will use feature phones. 5G, for now, will be out of reach for many people, 2G goes far and wide. In rural areas, there are a lot of feature phones. There is also the issue of digital education; most people do not know the type of phone to buy,” an industry source said.
The average cost of 1 gigabyte of mobile data in Nigeria is $0.39 (N390), with the country ranking 31st out of 237 countries in terms of the cheapest mobile data, this is according to analysis by Cable.co.uk between July 5 and September 6, 2023.
In Nigeria, a low-income worker who earns below N30,000, which is the minimum wage, can barely buy enough data for the month, as the income is not enough to take care of basic needs.
As a result of this, telecommunication providers – MTN, Airtel, 9mobile, and Globacom active subscribers of internet service have seen less growth over the years.
In the past seven years, 9mobile has experienced a consistent decline in its Internet subscriber base, with an average loss of 134,000 subscribers monthly since June 2016. This decline began after it reached 17.2 million subscribers — its highest ever in April 2016, falling to 3.5 million in August 2023.
The NCC data also revealed that as of May 2020, Airtel and Globacom reported 37 million internet users each. However, Globacom and Airtel reported 43 million and 42 million respectively as of August 2023, while MTN had the highest number of internet users (68 million).