Nigeria’s broadband penetration, which has grown in recent months, will decline if the proposed excise duty on all telecommunication services is implemented, telecommunication companies have said.
Nigeria’s broadband penetration rate rose to 44.3 percent in June from 40.9 percent in February, when it fell slightly from 41.6 percent in the previous month.
“The operators are working seriously to deepen broadband penetration in Nigeria through partnerships with state government and organisations. The forthcoming elections in Nigeria might also be the reason for further broadband penetration. The provision of free WiFi is being used to drive a particular political party,” Ajibola Olude, chief operating officer at Association of Telecommunications Companies of Nigeria, told BusinessDay.
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He stressed the need for policies that would support further growth in broadband penetration.
“The inclusion of five percent excise duty in all telecommunication services will lead to a decline in the broadband penetration rate,” Olude said.
Olude said the government should continue to make laws that enable growth in the sector and ensure that its members can access foreign exchange directly from the Central Bank of Nigeria.
There was a significant increase in broadband penetration in the first six months of 2022 compared to the same period last year. In 2021, the broadband penetration rate stood at 42.9 percent at the start of the year but declined to 39.9 percent by the end of June.
The decrease was partly due to new SIM card registration regulations in the country that started in December 2020 and led to a ban on unregistered SIM cards not linked to a National Identification Number (NIN) in 2021.
The deadline for the NIN-SIM linkage exercise was extended several times to give Nigerians time to comply with the policy, as tens of millions of SIMs still remained unaccounted for.
This year, the broadband penetration rate rebounded in February and has continued to rise on the back of government’s efforts to boost broadband penetration to drive economic growth and the move towards reviewing the country’s short code services.
The Nigerian Communications Commission (NCC) believes that the country will reach its target of 70 percent broadband penetration by 2025.
“There are many factors that accounted for the uptick in broadband penetration in Nigeria. It is obvious that virtually all sectors of the Nigerian economy have realised the importance of leveraging the power of broadband; hence they are using it to drive productivity and efficiency in their respective sectors,” Olude said.
“Governments at all levels are spending heavily to make all Nigerians digitally literate, and as such, this has also contributed to the recent broadband penetration in Nigeria. The higher the digital natives, the higher the broadband penetration,” Olude said.
To further deepen Nigeria’s broadband penetration rate, Umar Danbatta, executive vice chairman, said recently that there were plans to review the country’s short code services.
A short code is a specialised five to six-digit phone number used in one-way SMS and MMS messaging and is commonly used to send business text messages and marketing campaigns to a user’s mobile device.
According to Danbatta, this is aimed at achieving operational efficiency and operational excellence which will continue to assist in the country’s quest for increased broadband penetration.
