Tuesday, February 27, 2024

20 years of telecommunication growth in Nigeria – Should we celebrate?

Prior to 2001 when Nigeria’s telecommunication sector was deregulated, Nigeria had about 700,000 telephone lines, which could not meet the growing demand for telecommunications services by Nigerians. Access to information technology was also limited as a result of failed operations by the Nigerian Telecommunications Limited (NITEL).


The liberalization of the sector in 2001 ushered in the first GSM operator and the award of the first Digital Mobile License (DML). Although it is safe to say that the sector has witnessed an unprecedented surge in investments and growth over the last twenty years of sustained operations, but the country is not where it is supposed to be.


We can also accept that where we are now is worth celebrating, taking into consideration where we are coming from. The introduction of GSM into the Nigerian market caused a positive disruption in the national paradigm by changing the way people, government and society interact and conduct business.


Telecommunication is now widely regarded as a strategic investment to maintain and develop competitive advantage at all levels – national, regional, etc. It constitutes the core of, and provides the infrastructure for the information economy as a whole. For instance, telecommunications service is the bedrock upon which information technology and its derivatives such as electronic banking and commerce are built. Telecommunication facilitates market entry, improves customer service, reduces cost, and increases productivity.


In 2020, when the COVID-19 pandemic hit the world, we all relied heavily on telecommunications technology in order to keep society running through work and social interaction. The future of this industry and its untapped potentials mean that we must all come together and work to improve telecommunications.


Considering how far the industry has progressed in twenty years, its contribution to GDP has also been impressive. According to The Cable Index, a data company in Nigeria, “the contribution of telecommunications to Nigeria’s GDP maintained a steady growth rate since 2012.” The data company also revealed that “In 2012, the contribution of the telecoms sector to GDP was 7.70 per cent, and in 2013, the contribution dropped slightly to 7.4 per cent, but it picked up again in 2014, contributing 7.6 per cent to GDP.”


“In 2015, the sector’s contribution to GDP further increased to 8.5 per cent and it had another increase in 2016, contributing 9.13 per cent. It contributed 8.7 per cent and 9.9 per cent to GDP in 2017 and 2018 respectively. We saw another increase in 2019 as the contribution to GDP grew again to 10.6 per cent and in 2020, telecoms contribution to GDP was 12.46 per cent.”


On further observation, it is clear that, in 2020, the sector witnessed its highest contribution to GDP. This is readily attributed to the fact that 2020 was the year of mostly living indoors due to the pandemic. Cities were on lockdown and people had no other option than to communicate and work from home using technology, hence the increase in GDP.


Another key advantage of the telecoms sector is that its services are not the end in themselves, but a means to an end. They are vital inputs for the production and trade of most goods. Over the years, telecommunication has positioned itself as a tool to further development because of its broad range and reach.


By facilitating communication and fostering the dissemination of information, it avails people the opportunity to participate actively in society, thereby increasing productivity over time. Telecommunication has also increased the efficiency of service providers and provided new markets by bridging gaps occasioned by distance and location.


As Nigerians celebrate 20 years of growth in the industry, I also believe that the sector can be better. The burden to make it better falls on the Nigerian Communications Commission (NCC). Let us hope that the Commission can strategize and look for ways to improve the sector because it needs to be done.



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