Looking at the latest data on the nation’s telecommunications industry in the last three quarters, occurrences are beginning to show danger signals if critical policy decisions are not taken very fast.
Even though the sub-sector contracted by -1.92% in Q2 2017 from 2.89% in Q1 2017 and 1.03% in Q4 2016, its contribution to GDP increased as the sector contributed N1.549 trillion in Q2 of 2017, representing 6.68% increase, up from the N1.452 trillion it contributed in Q1.
But there factors that are strongly hanging around in the industry which ab-inito, powered the observed poor performance within the period under review.
Some of the issues stemmed from low consumer purchasing power traced to contracted economy.
However, more direct to the factor is the effects of Etisalat’s exit and panic that surrounded it within the period.
Another factor that also created some levels of hobble in the telecoms market is traced to the regulator’s effort to clean up improperly registered SIM’s which led to many line deactivations and revenue loss to networks.
There is also the issue of unavailability of forex to the sector which is still causing delay in network upgrades and expansions that will sustain and boost network performance after all.
Again, there is the issue of trending migration from traditional voice services to the much cheaper data bundles which now drive voice via WhatsApp, Facebook, IMO and several other channels with traditional SMS being replaced by same mediums.
Besides, the data price crisis is still strong and Internet Services providers (ISPs) are being pushed to the breaking limits if the floor is not reviewed as soon as possible.
Analysts say the scenario has made the market segment one of the lowest on the continent and a drawback for potential investors and even network upgrade by existing operators because nothing is currently driving competition except ability to survive from voice traffic especially for major network Operators (MNOs).
There are fears that campaigns for foreign investors to the nation’s data market at the 2017 ITU may not fly as there is no floor that can form the basis for entry to the market by new operators.
This is because, the big guns gunning down prices in an effort that is stifling the smaller but determined players to the brink of extinction (or acquisition).
Industry watchers say the ongoing cold war between MNOs and ISPs remains a disruptive issue and it is clearly comparable to the disruptive nature of the Shale Oil producers who used the fracking technology to unsettle the market and cause a price war with the traditional oil producers.
On the other hand of the divide, the expected data boom is being stifled mainly by lack of forex which has lasted for too long in the economy even though data show that Nigeria has technically exited recession.
Inability to upgrade networks due to dollar scarcity and the devaluation of the naira are jointly frustrating the once before flourishing telecoms sector and the scenario is hobbling the expected speed for broadband penetration which currently stands at 21%…
According to the CNBC telecoms Outlook on Nigeria recently released, “As the need for big data expounds, need for digital connectivity across the private and public sectors, need for smart cities and broadband infrastructure and overall the need to keep up with global trends and stay globally relevant increases, huge potentials abound in the country”.
