Recent stats from the Nigerian Communication Commission (NCC) shows a new fountainhead in telecoms. Accounting for 14.30% in the second quarter and surpassing oil by 5.37%, could Nigeria have overlooked this sector in her quest for diversification?
- The NCC boosted federal government revenues by ₦344.71Bn;
- COVID-19 triggered a heavy volume of internet and voice usage;
- Nigerians used more of GSM than VoIP (voice over internet protocol);
- Over-reliance on GSM may speak to the digital divide that still exists in the country;
- In Nigeria’s quest for diversification, the telecoms sector should not be left behind, as it may prove key in a technology-driven future.
Data from the Nigerian Communication Commission (NCC) shows Communication contributed 14.3% to the nation’s GDP in the second quarter, second highest after agriculture with 23.92%. In contrast, Nigeria’s chief commodity, Oil, contributed just 8.93%. Thus begging the question, in Nigeria’s quest for diversification, did she overlook telecommunications?
Percentage Contribution to GDP from Nigerian Sectors
The COVID of it all
For a majority of businesses, the pandemic and ensuing movement restrictions cost a pretty penny. But for brands whose sole business thrived on relaxation, business was good. Chief amongst that category were Amazon, Netflix and Zoom, whose market share rose during this year. But as these services are predominantly powered by telecommunication services, it stands to reason that the sector would benefit as well. And it did. Also, given that broadband networks remit a percentage of their revenue to NCC, a Federal Government agency, that meant more funds to the country.
The stay-at-home order from COVID-19 triggered most of these numbers. And for many, social distancing was time to get social with a variety of things to do online; ranging from online courses to social media engagement, games or general internet surfing. Even SMEs had to get with the times as the NCC data showed an increase in subscriber base. So, online collaborative and productivity tools such as Skype, Meet and Zoom were fair game.
Breakdown of Market Share of Deployed Technologies
Au contraire to what one would think, GSM, not VoIP had the highest market share. The latter called Voice Over Internet Protocol is the technology that powers most caller-based productivity tools mentioned above. And the former corresponds to regular phone calls.
Contributions to GDP as an implication for future investments
The contribution of the communication sector spells success for Nigeria, albeit with room for growth. While the sector contributed the second highest after agriculture, technologies are still a far cry from optimal. GSM still has the highest market share, with VoIP and wireless technologies lagging. For Code Division Multiple Access (CDMA), it isn’t present in Nigerian networks. But it is essentially GSM (Code Division Multiple Access).
So, to see greater gains, the government needs to invest in the Communication sector. Already it has proved to be a top earner, but it could be so much better. Subscription plans need to be harmonised and subsidised. Also crucial would be providing these services to rural Nigeria. And speaking of rural areas, one can draw a correlation between the high volume of GSM usage with access to regular internet services. The typical consensus in Nigeria is data is for rich people as reports speak to a digital divide across locales.