Business

June 10, 2024

Experts seek govt support for telecom sector survival  

telecoms

By Peter Egwuatu 

Against the backdrop of telecomm companies quoted on the Nigerian Exchange Limited, NGX, declaring losses,  economic experts and stakeholders in the telecom industry have warned  that the sector’s decline could have far-reaching consequences for the country’s economic growth and development.

At a breakfast session hosted by the Lagos Business School, Pan-Atlantic University,  where leading voices in the private sector  gathered to discuss the theme “Telecom Sector: The Fulcrum for Economic Dynamism in Nigeria”, keynote speaker, Bismarck Rewane, CEO of Financial Derivatives Company, emphasized the telecom sector’s critical role in driving economic growth, innovation, and productivity across various industries.

Rewane, in his presentation titled, “Nigerian Economy on the Brink, Adapt or Collapse?” highlighted the sector’s challenges, including rising inflation, high operating costs, limited access to foreign exchange, regulatory burdens, multiple taxations, and state and local government extortion. He stressed that these challenges are threatening the sector’s growth and development, citing MTN’s reported loss in the 2023 financial year.

The expert’s comments align with telecom operators’ push for cost-reflective tariffs, which they deem necessary due to adverse economic headwinds. Rewane emphasized that the current situation is having a detrimental impact on the sector’s growth and development, warning that the revenue potential from telecoms may start falling, leading to a ripple effect on other sectors.

“Big push theory posits that growth in one sector can stimulate growth in others through backward and forward linkages. The telecom sector has both forward and backward linkages to various sectors. This linkage to other sectors is vital for economic growth, innovation, and productivity across various industries making it a key enabler and driver of development in modern economies. If the telecom industry collapses, all other sectors will follow”, he added.