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HomeMisc NewsTech NewsNigeria's telecoms sector ready for sustained growth with 5G, cashless policy

Nigeria’s telecoms sector ready for sustained growth with 5G, cashless policy

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Data from the National Bureau of Statistics revealed that active voice and internet subscriptions grew by 13.9 percent y/y and 9.1 percent y/y to 222.6 million and 154.8 million, respectively, in Q4-2022.

The bureau disclosed previously that the Telecommunications and Information Services sub-sector grew by 10.7% in real terms in 2022.

The sector contributes heavily to the Nigerian economy; aside from the taxation revenues (company income and Value Added Taxes (VAT) from the information and communication sector have grown by 41.1 percent y/y in H2-2022 to N319.0 billion, with between 25  percent and 40 percent of this attributed to the telecoms sector) and the licensing fees (MTN, Mafab, and Airtel paid a total of $863.9mn to the Nigerian Communications Commission for their 5G licenses), the sector remains a catalyst for economic growth.

The consistent growth in the sector can be attributed to internet penetration and “leapfrogging” in the sector. In addition, collaboration and commitment by both government and private stakeholders.

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The government has reiterated its commitment to the sector, disclosing that it is targeting 70 percent broadband penetration by 2025. It has continued introducing efficiency-improving and growth initiatives such as harmonizing shortcodes and reducing Right of Way charges by 90 percent to N14.5 for telecommunications operators who want to deploy broadband infrastructure in green areas.

Private operators MTN Nigeria and Airtel Africa’s investments in infrastructure rose to N613.13 billion in 2022, underpinned by capital expenditure in 5G and 4G.

We envisage that the telecommunications sector will continue on its current growth trajectory, especially in the internet and payment services space.

According to the global Findex database, as of FY-2021, c. 55 percent of Nigerians had no accounts in any financial institution, and less than 10 percent of adults had mobile money accounts, as compared to the Sub-Saharan Africa average of c. 45 percent without accounts and c. 33 percent of adults with mobile money accounts.

The sub-sector is poised to be one of the few sectors expected to improve significantly in Q1-2023 as more Nigerians are incentivised to switch to cashless modes of payment during the “cash crunch.”  ~United Capital

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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