Business in Tech

Investment In The Nigerian Telecom Sector Hits $68b And FDI Makes Up For Half Of That Figure

Local and foreign investments in the Nigerian telecoms sector has now reached $68b and this is according to the former Secretary-General of the International Telecommunications Union (ITU), Dr. Hamadoun Toure who made this known at Nigerian Telecoms Investment Forum which was part of the ITU Telecom World 2016 at Bangkok, Thailand. Of that figure, $35b came from foreign direct investment (FDI) and this points to a stronger local investment since the sector was deregulated in the early 2000s.

According to a statement by the Director, Public Affairs at NCC, Tony Ojobo who spoke to news men on the topic, he said Toure also said “the next growth for voice communication is in Quality of Service. The new oil in Nigeria is ICT and data transmission is the way to go.” The former ITU president also commended Nigerian’s telecom regulator the NCC (Nigerian Communications Commission) for what he called a transparent management of the nation’s telecom services.

On the broadband side, it was revealed that Nigeria now has a 21 percent penetration and is on track to meet the 30 percent mark by 2018. We have seen significant investments on the part of telcos in 3G and 4G infrastructure in major cities across Nigeria and the better part of that news is that they come at what you can refer to as affordable rates.

On the part of the NCC Executive Vice Chairman/CEO Prof. Umaru Danbatta who was also a panelist at the event alongside the Kaduna State governor Nasir El-Rufai, he said “we have come to let the global community know that investments are welcome in this area (broadband).” The Kaduna State governor said his state will soon launch the Smart Kaduna initiative and has contacted an unnamed smartphone manufacturer to support the initiative by making smart pocket phones.

Still on the government side, the federal minister of communication Barr. Adebayo Shittu who represented President Muhammadu Buhari said investors are welcome at any time to Nigeria and if visa is an issue, they should let the ministry know immediately so something can be done in that regard. “Feel free to come to Nigeria and if visa is an issue, let us know. Our doors are open and the ease of doing business in Nigeria is being improved upon.”

On the private sector end, Ms. Funke Opeke who is the CEO of MainOne revealed thay her company was building over 1,000km of fibre optic in Lagos and this is part of the building block to encourage broadband penetration. Mr. Ibrahim Dikko who is the VP, regulatory and corporate affairs at Etisalat Nigeria said the regulatory environment in Nigeria was friendly and transparent. He said “laws are very clear, policy is good because the NCC hears us out all the time”. You’ll recall that Etisalat had accused  regulatory body for the Nigerian telecom industry has been accused of not following due process in enforcing regulations. They accused the NCC of approving a 30% differential in on-net and off-net tariffs for MTN (number 1 by ranking in terms of mobile subscribers in Nigeria) without due process. This all happened last year but it would seem that after the NCC mostly held its ground with respect to the MTN fine saga, other telcos may now view the regulator a bit more fairer than how they used to see them before. The friendly words from Dikko confirms this.

On the foreign side, the VP, New Consumers at MasterCard Mr. Anand Menon said Nigeria’s ICT sector has created an enabling environment for business to grow and stated Master Card’s commitment to investment in Nigeria. Right now only about 57 percent of Nigerians have bank accounts and that’s an area that should be of interest to Master Card as the Central Bank of Nigeria (CBN) moves to make banking much easier in the country.

The $68b figure is quite significant seeing as the same figure was about $25b less than four years ago.