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Heavier investment in widespread, quality data coverage by telecommunications operators has resulted in higher percentage of total revenue growth coming from mobile data services, as telecommunications operators add approximately one million new data subscribers and Nigerians spend an average of N182 billion monthly on mobile internet services, BusinessDay finds.
According to data on the Nigerian Communications Commission (NCC) website, Nigeria in January 2019 had over 113.8 million GSM internet data subscribers. About 70 percent (79 million data subscribers) spend an average of N1,000 on monthly data subscription which amounts to N79 billion for telcos. Fifteen percent of those subscribers spend at least N3,000, which amounts to an additional N48 billion; and 10 percent spend N5,000 (N55 billion) or more on data, bringing up the total of monthly data revenues to about N182 billion for telcos in Nigeria.
The numbers are steadily growing year-on-year (YoY) and Nigerians’ spend continues to increase with deepening broadband penetration, cheaper smartphones, over the top (OTT) services and voice-over internet protocol VoIP such as WhatsApp calls, Skype, FaceTime, etc.
Numbers from NCC data show that Nigerian telcos gain approximately one million new internet subscribers every month.
In January 2016, the four major telecommunications providers – MTN, Airtel, Globacom and 9mobile – had a total of 95.7 million data subscribers. The year saw a decline in these numbers due to the country’s economic recession and numbers dropped to 89.9 million in February 2017. However, with recovery, the numbers rose to just over 100 million in January 2018 and from then on, there was a continuous increase in numbers, currently standing at 113.8 million subscribers.
“Data revenues will continue to increase for telcos because of the contribution of value-added services which have been significantly used especially by Nigerians who need to make international calls,” Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), told BusinessDay in a telephone interview.
“The rise of mobile money, e-business and e-commerce, the use of 4G services for CCTV, and the changes in consumer behaviour and social media will also further contribute to the growth of data revenues for telcos,” Teniola said.
In its 2018 full-year financial results, MTN Nigeria which has 45.9 million internet subscribers showed significant increase in its data revenues. According to the results, there was a 17.2 percent increase in service revenue in 2018, just as data revenue increased by 39.3 percent.
Speaking on the year-on-year (YoY) increase in data subscribers and revenues, Ferdi Moolman, CEO MTN Nigeria, said the company last year had an additional 8 million internet subscribers and 18.7 million of its total number of subscribers use more than five megabytes per month.
“We are now even better positioned to ensure that everyone can access the benefits of a modern connected life. We understand how access to the opportunities enabled by the internet can open up new industries even in the remotest areas of our country,” Moolman said.
Airtel Nigeria in its 2018 third-quarter report stated that in the last one year, it has doubled its number of broadband base stations from 5,652 it had in December 2017 to 10,369 base stations as of December 2018.
The telco also reported $223 million capital expenditure in Nigeria mainly for network upgrade and expansion.
Across Africa, the telco said, “Capital expenditure during the quarter was $170m for African operations, largely on account of investment in data capacities and network modernisation.”
The rapid increase in smartphone ownership and usage, which has spiked up Nigeria’s internet penetration numbers to over 113 million, up from the 46.1 percent (86.3 million users) in 2015, has caused telecommunications service providers to invest more critically into data infrastructure and service provision.
Globacom, the only indigenous telecoms operator in the country, has continuously introduced new offerings geared towards the provision of more affordable data in a bid increase data subscriptions on the network.
Speaking on one of such offerings, Ashok Israni, Globacom’s regional chief marketing officer, said, “Globacom has invested millions of dollars into expanding and upgrading the network, boosting its capacity and giving its subscribers excellent experience on the network.”
Globacom with is wholly-owned submarine cable, Glo-1, linking Europe and America to West Africa, has the capacity to deliver fast and robust connectivity for data and video to telecom consumers in West Africa.
Also, in a move to further boost data revenues, MTN in addition to acquiring the previously auctioned 2.6GHz spectrum from the NCC and buying Visafone, the only Code Division Multiple Access (CDMA) network in the country, in 2018 secured a N200 billion loan from 12 Nigerian banks, disclosing that the bulk of the funds will be pushed into network expansion and data services to reach the hinterlands.
“We are beginning to see that people are not making calls as much as they used to, and are more interested in data-based applications. So, as we transition into this movement, we need to invest in our network,” Kunle Awobodu, MTN Nigeria’s chief financial officer, told BusinessDay.
“Our view is that we must prepare for the future. If a big portion of our revenue is going to come from data and from digital services in the future, we have to start that investment now, and that is why we have taken the medium-term loan,” Awobodu said.
Jumoke Akiyode-Lawanson
