Telecom activities may keep Nigeria’s rebased GDP green

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BY PRINCE OSUAGWU

Information and Communications Technology, ICT, once again, showed its economy- boosting potentials when the statistician-general of the Federation, Dr. Yemi Kale recently released the rebased Gross Domestic Product, GDP data for 2013.

Telecom-mastAnnouncing the data, Kale highlighted the remarkable contribution of telecom and information services to the N80.22 trillion estimated GDP.

Being a new industry un-accounted for in the last rebased GDP year 1990, telecom’s N6.97 trillion addition to the economy, was regarded as a star performer in the new rebased GDP year, 2013.

However, the question is whether the sector has the sustainability power to hold the GDP at an           all time high.

Hi-Tech has however, mirrored into the activities of the sector and selected some programmes that may provide the magic wand. One of such programmes includes the new licences lined up to be issued by the regulator, the Nigerian Communications Commission, NCC, to open the sector to more players.

Reliable NCC sources have confirmed that new licences are to be issued to seven new infrastructure companies, InfraCos, before the end of 2014 in a move to deepen broadband infrastructure rollout across the country.

Already, the NCC had on February 19, this year, auctioned the 30MHz slot of the 2.3 gigahertz spectrum to Bitflux, a consortium of three companies, at a whopping $23.251 million. This is also as it has concluded fresh arrangements to license another available frequency slot in the 3.5 GHz band available to 27 states in MHz bandwidths.

In an advertorial published in prominent Nigerian dailies recently, the regulator said it was “pleased to announce to interested public, the availability of 3.5 GHz band in some states and the federal capital territory, which the commission is willing to sell”

The spectrum, expected to be licensed on a state by state basis, is said to be available in 27 states and Abuja, the capital territory, with all the states having 25 MHz bandwidth available, except for Abuja that has only 20 MHz bandwidth available.

What this means is that winners of the spectrum licence will operate within the state or states where the licence is situated. No doubt, if the licenses would attract revenues close to that of the 2.3GHz, the GDP will surely be green.

Also, the 700MHz spectrum band licence, according to NCC is also planned for auctioning next year, promising to rake in some revenue into the economy.

Moreover, the issuance of all these spectrum licences would not only attract revenue but will go a long way in helping the country to transmit the huge international bandwidth from the undersea cables, across the nooks and crannies of the country to make more services available to Nigerians.

Another factor is the demand in the area of data. Telecoms experts have noted that data truly driven by broadband network is the next frontier for telecoms revenues. Currently there is avid taste for data services in the country, among individuals, businesses and government.

Latest industry data by the regulator has indicated that there were 129 million active telephone subscriptions in the country as at the end of February, 2013. Of this figure, 63.4 million are active mobile internet subscriptions on Global System for Mobile Communications, GSM networks, indicating that there is increasing demand for data-enabled services.

The improving connectivity and increase in businesses done online is also spurring the need for data centers. It is estimated that Nigeria, may almost triple its online purchases in just three years to more than $1 billion by 2014.

Also, considering the low level internet penetration points, there are also expectations for high demand of penetration points, translating to opportunities.  The ministry of Communications Technology has consistently promised to jerk up Broadband penetration from the current 6 percent to around 30 per cent in the next few years.

Indeed, new policies, such as the National Broadband Plan and others, are also going to play a key role in making Nigeria’s telecoms sector an attractive investment destination.

As at the middle of 2012, the telecoms sector had recorded a whopping $25 billion local and Foreign Direct Investment, FDIs, up from the $500, 000 recorded in 2001 with a plan to double the $25 billion in the next years. Broadband is prided as being the potential investment booster for the industry. To drive this investment, the NCC and the ministry also continue to leverage every local and international fora to attract investors into the country.

Realistically, if these programmes are steered as programmed, there are great hopes that telecoms would continue to play lead roles not only in the economy but also in the new rebased GDP.

 

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