By Raphael Udoh

The contributions of the Information, Communication and Technology sector to the real Gross Domestic Product (GDP) have been hailed in recent times. Much has been said and written about how the industry, composed of telecommunications and information services; publishing; motion picture, sound recording and music production; and broadcasting, make substantial economic contributions. However, despite impressive figures posted by some of the operators, all appears not too well with the telecoms sector overall.

The Nigerian Communications Commission (NCC) data showed that each network operator lost subscriptions. MTN, which started 2021 with 65.3 million data customers, ended with 58.8 million, losing 6.5 million subscriptions.

Globacom had 39.5 million data subscriptions at the end of 2021 compared to 40.1 million in December 2020. Airtel lost 3.7 million customers and had 37.5 million subscriptions by the end of 2021. 9mobile was not exempt as it lost 1.4 million subscriptions to close 2021 with 5.7 million.

Subscriptions for mobile voice service also declined across the industry by nine million in 2021. Data from the NCC showed that the mobile subscriptions database, which stood at 204 million in December 2020, fell to 195 million by the end of 2021, plunging the country’s teledensity to 102.40 from 107.18 per cent in 2021.

Teledensity measures the number of active telephone connections per 100 inhabitants living within an area. It is calculated based on a population estimate of 190 million.

Interestingly, analysts have blamed this industry-wide decline on the NIN-SIM linkage exercise and the four-month suspension of new SIM registration from December 2020 to April 2021. Despite the much-vaunted benefits of reducing insecurity through proper registration of the SIM numbers, it does not appear to be having any effectas less than 10% of telecom subscribers nationwide have been duly verified with their NINs according to available information.

This means that we only made 10% progress in the SIM-NIN linkage exercise and are only 10% safer since the exercise began last year. The rest have either submitted their NINs but are yet unverified, or have submitted themselves for NIN registration, but it could take anywhere between 1 week to 4 months, to be issued a NIN and for same to be activated on NIMC’s Database so that the NIN can be verifiable.

Without verification, the NIN owner is unable to enjoy services such as issuance of Nigerian International Travel Passport or telephone line acquisition or replacement, etc. That people have to wait as much as 4 months to get their NINs issued and activated by NIMC raises concerns around the current deadline for NIN-SIM linkage.

Because of this long wait to have NINs activated by NIMC, desperate Nigerians are allegedly compelled to part with good sums of money to be given expedited treatment. And alarmingly, only 71 million Nigerians have enrolled for NIN, meaning that more people will be disconnected if the deadline is not extended. 

But apart from the above, other systemic problems need to be urgently addressed for the sustainable growth and development of the telecom operators, two of whom recently won 5G licenses. Resolving these issues would help boost broadband deployment and increase the operators’ contributions to the GDP.

Some of the challenges include FOREX devaluation issues, non-aligned regulatory and taxation regimes across Federal, State and Local Governments and poor management of new construction projects leading to fibre-cuts and poor power infrastructure. Unreliable and expensive electricity would further complicate the broadband penetration drive, which the government is eager to improve.

According to the National Bureau of Statistics, the sector contributed N8.13tn to real Gross Domestic Product (GDP) in the nine months to September 2021. In Q1 2021, the country’s real GDP was N16.83tn, with the ICT sector recording a growth rate of 6.47 per cent in real terms, year on year, and contributing 14.91 per cent to real GDP.

The GDP dropped to N16.69tn in Q2, with the ICT sector recording a growth rate of 5.55 per cent in real terms and contributing 17.92 per cent to real GDP. In Q3, the ICT recorded a growth rate of 9.66 per cent in real terms, year on year, and contributed 14.20 per cent to the real GDP (N18.54tn).

The sector contributed N2.63tn to nominal GDP in Q3, compared to N2.99tn in Q2 and N2.51tn in Q1. It contributed a total of N12.91tn in the nine months. This robust showing, combined with the impressive performance of some telecoms players on the Nigerian Exchange Limited (NGX), has continued to give players optimism. But there is still cause for caution.

For example, all the operators ended 2021 with a considerable decline in their internet customer database as they lost 12.3 million subscriptions. Data subscriptions across mobile, fixed and VoIP networks plunged to 141.9 million in December 2021 compared to 154.3 million in 2020.

The operators might be posting what appears to be impressive figures at the moment, but the question is, will this be sustainable in the long run? The challenges need to be resolved for Nigeria to avoid the ‘suffering and smiling’ scenario painted by the inimitable Fela Anikulapo-Kuti with telecoms. The time to act is now.