Dissecting Nigeria’s Telecommunications Industry In 2020 (Part 1) 

Yemisi Izuora here chronicles events that shaped the Nigeria Telecommunications industry which only in Q2 made a landmark contribution of N2.272 Trillion to GDP

Nigeria’s telecommunications sector, in the year 2020 was significantly eventful with a lot of landmark regulatory initiatives by the Nigerian Communications Commission (NCC).

According to official telecom industry data, the telecoms contribution to the Gross Domestic Product (GDP) increased to over 14.30 per cent as of second Quarter of 2020, according to data obtained from the National Bureau of Statistics (NBS).

In financial value, the 14.30 per cent translates to N2.272 trillion in Q2, 2020. Whereas, telecoms contribution as at December 2019 was 10.60 per cent.

Also, telecoms investment continued to grow in leaps and bounds in 2020 beyond $70 billion.

 

Active mobile voice subscribers increased from 184 million in December, 2019 to 208 million by October, 2020. This represents an additional 24 million active mobile lines accessed by Nigerians across mobile networks from December, 2019 to October, 2020. Accordingly, teledensity (the total number of telephone lines per hundred people in an area) increased from 96.76% in December, 2019 to 108.94% by October, 2020.

 

The NCC’s regulatory activities also resulted in increased connectivity in the country. From, 126 million in December, 2019, Internet subscriptions rose impressively 152.9 million as of October, 2020. In the same vein, broadband (i.e. high-speed Internet) penetration maintained an upward swing to 45.93% in October, 2020, up from 37.80% in 2019.

 

Mobile Number Portability (MNP) service also continued to offer wider option of service for telecoms consumers in 2020. In the year under review, 158,128 telecom consumers ported their lines between January-October, 2020, as against over 120,000 lines that were ported in 2019.

The increase in MNP service usage is due to increased public education and awareness by the Commission’s head office and its zonal offices, as they intensified awareness on the availability, usage and benefits of MNP across geo-political zones. (Mobile number portability is a service introduced by NCC on mobile networks which allows telecoms consumers to switch from their current network to another preferred network, without changing their mobile number, when they feel a need to do so).

 

The Commission was able to successfully resolve over 98% of the total consumer complaints received from telecoms consumers via the NCC Toll-Free Number 622, NCC Consumer Portal, social media platforms and written complaints. Subscriptions by telecoms consumers to the NCC’s Don-Not-Disturb (DND) 2442 service reached over 30 million in 2020 compared with 22 million in 2019.

 

Furthermore, the following are the various regulatory initiatives embarked upon by the leadership of NCC, which has resulted in the impressive aforementioned statistics quoted above.  Each of these is examined, in turns, below.

 

The policies, programmes and activities of the Commission have further positively impacted the upward trajectory of the digital ecosystem in the year under review. Also, the year 2020 came with a lot of challenges but the Nigerian telecommunications sector continued to record significant growth.

The impressive performance and growth, made possible through effective regulatory initiatives emplaced by the telecoms regulator, under the leadership the Executive Vice Chairman (EVC), Prof. Umar Danbatta, was despite the apparent economic recession and headwinds occasioned by the global outbreak of COVID-19 pandemic and its attendant lockdowns, especially in Nigeria.

 

The effective and future-proof regulatory regime by the NCC, coincidentally prepared the telecoms sector to be able to provide the needed digital valves that helped to keep the Nigerian economy afloat through seamless communication by individuals, businesses and government institutions in terms of voice and data services provided by telecoms operators, at a time when all other sectors of the economy were comatose.

 

A major development in the industry in 2020 was the reappointment of Prof. Danbatta for another five years term as the EVC of NCC, a presidential action that was resoundingly lauded by industry stakeholders, who described Danbatta “as a round peg in a round hole.” His reappointment and subsequent confirmation by the Senate of the Federal Republic of Nigeria in the third quarter of 2020 also helped to ensure industry sustainability and policy consistency, preparing the industry for increased growth. Danbatta came into office as EVC of NCC in August 2015 for a five- year period in the first instance. The first term ended in August, 2020 after which the he was reappointed by the President.

 

This sustainability and consistency in the leadership of the Commission and in policy initiatives under Prof. Danbatta in 2020, therefore, allowed the Commission to uninterruptedly carry on with a number of regulatory activities towards ensuring increased access to telecoms services, ensuring increased consumer education and protection, boosting security of life and property, sanitising the industry while also supporting other initiatives that aimed at boosting innovation in the telecoms sector and continuously galvanizing the country’s overall economic growth.

 

In the year under review, growth statistics and major regulatory initiatives and policies undertaken by the Commission which have continued to put the industry on the consistent path of growth and keep the telecommunications sector resilient to support the national economy, despite the COVID-19 pandemic, are examined.

 

Unveiling Of NCC’s New Strategic Management Plan (SMP) to drive Digital Economy.

The Nigerian Communications Commission (NCC), in June, 2020, unveiled its new Strategic Management Plan (SMP) 2020-2024 as a pedestal to drive the implementation of the Federal Government’s digital economy vision. The launch of the SMP demonstrated the Commission’s serious improvement in performance matrix and its efforts in accelerating the implementation of the National Digital Economy Policy and Strategy (NDEPS) and the National Broadband Plan (NBP) 2020 – 2025 of the Federal Government.

The SMP, according to Prof. Danbatta, is the fulcrum that will aid the NCC in driving its telecom regulatory mandate in the fast-evolving telecoms industry, in the next five years. It will also serve as a roadmap for the future of the Nigerian telecoms sector, taking into consideration the current and emerging trends in the industry and the numerous expectations of the diverse stakeholders.

The SMP 2020 – 2024 is the visioning document of the Commission for planning, monitoring, analysing, and assessment of the Commission to meet its goals and set objectives. It has five pillars, which include regulatory excellence, universal broadband, promote development of digital economy, market development; and strategic partnering and 25 intended outcomes.  Five critical success factors identified for the implementation of the Strategy include: ownership and commitment, effective communication, human resource capacity, development of and adherence to a strategy development manual; and implementation discipline.

 

Driving ICT Innovations For Growth

In 2020, the NCC continued its commitment to investing millions of Naira to drive Information and Communications Technology (ICT) innovations in the academia and while also supporting innovative ideas among young Nigerian tech innovators. Aside several ICT innovation challenge and Hackathon programmes such as the Covid-19 Virtual Hackathon initiated and implemented by the Commission, the NCC, instituted and endowed two additional Professorial Chairs to the tune of N40 million in two more Nigerian universities. The two universities – the premier University of Ibadan, Oyo State and Abubakar Tafawa Balewa University, Bauchi State, are endowed with N20 million each over the next two years to embark of massive research to promote innovation to drive socio-economic development in the country. This brings to four the number of tertiary institutions of learning that have benefitted from the NCC’s innovation-driving initiative, having endowed professorial chairs in Bayero University Kano (BUK) and Federal University of Technology, Owerri (FUTO) in May, 2019.

Boosting FG Revenue

The total remittances by NCC into the Federal Government’s coffers from 2015 grew and reached N344bn in 2020. The revenue was essentially generated from spectrum sales, operating surplus and sanctions. So, aside spectrum auctions, NCC also engaged in spectrum re-planning, re-farming to optimise the usage of the scarce resource while it continued to address the quality of service (QoS) delivery through effective monitoring of Key Performance Indicators (KPIs) and development of KPIs for Third Generation (3G) and Fourth Generation (4G) networks. All these are in a bid to ensure improved service delivery to telecom consumers. Interestingly, the Commission has received commendation on this financial performance from the House Committee on Telecommunications, who visited the Commission on an oversight function sometime in October, 2020. The committee commended the leadership of the Commission for its transparency in ensuring remittances to FG’s CRF, considering the current revenue drive of the government. The committee urged the NCC to sustain its current template of ensuring effective regulation of the telecoms sector in a manner that would be more mutually beneficial to the industry players, the consumers of telecoms services and to the Nigerian government.

 

Approval Of e-SIM And National Roaming

In line with its commitment to always put Nigeria’s telecoms sector ahead of cutting-edge technologies that can revolutionise consumer experience, the Commission granted approval for two mobile network operators (MNOs), MTN Nigeria and 9Mobile, to carry out trial on the workability of embedded Subscriber Identification Modules (e-SIM) Service in Nigeria. The trial, approved to run for a period of one year, will involve testing 5,000 e-SIMs by the two networks, subject to compliance with a number of regulatory conditions. According to Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, the primary objective of the e-SIM trial is to assess the technical performance of the e-SIM on telecoms service providers’ network towards eventual rollout, if satisfactory. He said the e-SIMs is a technology that will eliminate the need for physical SIM card slots on mobile devices in the near future, adding that the trial is in line with the Commission’s forward-looking regulatory approach to ensure Nigeria’s telecoms ecosystem is in tandem with global best practices.

 

Similarly, the Commission also granted approval for MTN and 9mobile   trial on national roaming service for a period of three months, commencing from October 14, 2020 to end by January 13, 2020. The two telcos are expected to configure their networks to begin test and simulation for customer experience. The trial approval covers a few local governments, designated as the National Roaming geographic area, in Ondo State. Basically, roaming service will enable a mobile subscriber in Nigeria to automatically make and receive voice calls, send and receive data, or access other services when travelling outside a particular network geographical area by utilising the network coverage of other networks with roaming arrangements to access service. According to the Executive Vice Chairman (EVC) of NCC, Prof. Umar Garba Danbatta, the primary objective of the National Roaming Service trial is to encourage network resource sharing among operators. It is will also lead to operational expenditure (OPEX) optimisation and capital expenditure (CAPEX) efficiencies leading to freeing up of resources to expand mobile network coverage to unserved and underserved communities across the country, which will lead to improved Quality of Service (QoS) delivery to subscribers.

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