ICT, telecom: So far, so good

The Nigerian Information and Communications Technology (ICT) sector’s trajectory since 1960 has been that of sweet, sour and not so sweet tastes.

From the time of Posts and Telecommunications (P&T) to the time of Nigerian Telecommunications Limited (NITEL) to the time of Global System for Mobile Communication (GSM), Nigeria’s ICT sector has gone through a long and tortuous journey that has left sweet, sour and then sweet and then not too sweet tastes in the mouths of many Nigerians. 

Few Nigerians who had telephone boxes in their homes in the 1960s, 1970s and 1980s suffered (bills) to enjoy them, but many of them who did not have the “magical boxes” in their homes and who lined up for days at NITEL offices to communicate suffered even more.

NITEL’s monopoly of the entire ICT and telecom market strangulated many Nigerian businesses until 2001 when the sector escaped its grip.

In August, 2001, when mobile communication technology – GSM – was launched in Nigeria, thousands of people became “proud” owners of the telephone popularly called handset.

Since then, it has been a sweet story for many Nigerians and their businesses, except for high tariffs which many have come to accept as a norm.

The sweet story

According to the National Bureau of Statistics (NBS), the ICT sector in Nigeria attracted 35 per cent of the cumulative Foreign Direct Investment (FDI) between 2001 and 2017. 

The sector is currently the largest contributor to Nigeria’s Gross Domestic Product (GDP). It contributed over N4tn to the N40tn the country generated as GDP in Q1, 2021. This was even as the sector fell 10 per cent behind its contribution in the same quarter last year. Statistics by the NBS revealed that the sector contributed about 9.91 per cent to the GDP in Q1, 2021, lower than the 10.31 per cent recorded in the same quarter of 2020 and 10.58 per cent in the preceding quarter.

However, the sector still recorded higher contribution when compared to the oil sector which contributed just 9.25 per cent.

NBS noted that: “Nigeria’s Gross Domestic Product (GDP) grew by 0.51 per cent year-on-year in real terms in the first quarter of 2021, marking two consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.

“In terms of contribution to aggregate GDP, the oil sector accounted for 9.25 per cent of aggregate real GDP in Q1, 2021, while the non-oil sector accounted for 90.75 per cent of aggregate GDP in the first quarter of 2021.”

NBS said growth in the non-oil sector was driven mainly by the ICT sector while other drivers included agriculture (crop production); manufacturing (food, beverages and tobacco); real estate; construction; human health and social services.”

The Minister of Communications and Digital Economy, Dr Isa Ali Ibrahim Pantami, said the consistent positive performance of the ICT sector to the growth of the Nigerian economy was as a result of the development and implementation of relevant policies which provided enabling environment for the sector to thrive.

Dr Pantami added that the ICT sector grew by 6.47 per cent in Q1, 2021, making it the fastest growing sector of the Nigerian economy.

As of August, 2021, Nigeria had more than 200 million active mobile telecommunication subscriptions; a considerable increase from the 186 million last year.

Although infrastructure gaps persist, Nigeria’s investment in infrastructure projects has been extensive and is ranked second after South Africa, with 106 projects valued at $100bn. This was enabled by several initiatives of the federal government to improve the business climate in the country and make trade easier.

Speaking on Nigeria’s 61 years of ICT and telecommunication, a former president of the Association of Telecommunication Companies of Nigeria (ATCON), Engr Olusola Teniola, said, “We have had almost 20 years of solid growth; which means direct and indirect employment, increased GDP contribution, increased mobile telephony penetration and biggest telecom market in SSA.

“There are areas that have dogged us in terms of infrastructure challenges and the dearth of power from the grid and skill sets challenge.

“However, alongside these and recurring issues regarding doing business, the positives outweigh the negatives, and we have now created an underlying platform that is being prepared for the critical role it plays in the digital economy.’’

According to him, the financial sector and e-commerce have had their developments thrive on the back of telecommunication and ICT.

Areas to improve on

Allison Gillwald et al in their research work: “The State of ICT in Nigeria”, posited that: “At present there are few incentives, besides the large population, for a new entrant to invest into the Nigerian market, or for current players to expand existing operations through fresh investments. Foreign investment in the sector since 2014 has been minimal as a result. Domestic investment has not been able to compensate for this, especially with over $5bn having been sucked out of the sector by what are regarded as punitive penalties that were disproportionate to the infringements for failure to register SIM cards.”

This, together with high dollar/naira exchange rates which have limited the importation of dollar-based equipment required for network extension, has brought the sector to a low point, Daily Trust reports.

40m Nigerians use smartphones

Although only about 40 million out of the over 200 million Nigerians use smartphones in the country, according to an online store, Jumia, the country’s telecommunication market is the largest in Africa.  

Jumia said the figure was an increase of four million from 36 million it got from a survey of Nigeria’s smartphone users conducted in 2018.

The Country Manager of Jumia, Omolara Adagunodo, disclosed that 67 per cent of Nigerians would be using smartphones by 2025.

She said, “This shows that Nigeria still has a large market for smartphones.”

According to her, the increasing level of internet penetration would keep pushing the number of smartphone users up.

Telcos lose billions as customers shrink

However, the four major mobile telecommunication companies (telcos) in Nigeria: MTN, Glo, Airtel and 9mobile, have been losing millions of their customers in the last five months due to the implementation of the NIN-SIM linkage policy and the ban on the sale of SIM cards between December 2020 and May 2021.

Information obtained from the website of the Nigerian Communications Commission (NCC) shows that the four telcos shed a total of 11.8 million of their customers who could not replace their lost or stolen SIM cards, or because of the ban on sale of new SIM cards.

Specifically, the total subscriber base of the four major telcos reduced from 207.58 million at the end of November, 2020, to 195.73 million in February, 2021. This represents a 5.71 per cent decline within the period.

The decline in the number of subscribers could be attributed to the suspension of SIM card sales and registration as Nigerians grapple with the stress of registering and obtaining the National Identity, a telecommunication activist, Deolu Ogunbanjo, said. 

Smartphone companies

Nigeria which has served as a dumping ground of sorts for mobile phone manufacturers recently got its own locally produced 4G-enabled smartphone. Produced from scratch by some young Nigerians at the Industrial Training Fund (ITF) Model Skills Training Centre in Abuja, the smartphone is the first ever 4G phone made by locally sourced materials.

The Director General of ITF, Joseph Ari, who launched the smartphone, dubbed “ITF Mobile”, said it had been trademarked and certified by the Standards Organisation of Nigeria (SON).

In an interview, Mr Ari said the homegrown technology was produced at the ITF’s skills centre under the supervision of its Training Manager, Mrs Yinka Shodunke.

He said the materials for the phone were locally sourced in line with the federal government’s Executive Order 5 (use of local content).

He said once the phone had been patented a plant would be set up to mass produce it at a cheap price for Nigerians, adding that its production would create jobs for skilled and unskilled Nigerians and would thereby improve the country’s GDP.

A telecom engineer, Taju Sadeyo, who spoke to Daily Trust, said the launching of the 4G phone was good news that many Nigerians were not aware of.

Engr Sadeyo said, “I commend the ITF for this great effort. I will advise the government not to delay in taking the effort forward by mass producing the 4G. If this is done, it will reduce unemployment and boost the economy.’’

Another telcom expert, Baderin Ogunfemi, said the smartphone by Nigerian technicians would provide consumers refreshing options, features and pocket-friendly alternative.

He said, “Smart phones by foreign companies dominate the Nigerian market, but Made-in-Nigeria brands are now entering to provide consumers more options.

“The ITF phone is not the first phone manufactured by Nigerians. There are quite a number of smartphones manufactured by Nigerians. Though people who may have seen them may not know they are made in Nigeria. But sadly many of them have ceased to exist due to low patronage by Nigerians.”

Aspire 3 smartphone was manufactured by a Nigerian company, Solo, which was formed in 2012 by a group of telecom professionals led by Tayo Ogundipe, a Nigeria-born ex-senior global executive with HTC and Sony.

Another indigenous phone was Ankara K2 smartphone which was launched by a Nigerian device maker, Imose Mobile, early 2015. The smartphone came in two colour variants of black and white and supported dual mini SIM.

The Ankara K2 incorporated social networks, including WhatsApp, BBM, Instagram, WeChat, Twitter and Facebook. It also incorporated English, French and Arabic options.

Plirisblazex-64 smartphone is another produced by Nigerians. It was manufactured and released into the tech market in 2015 by Pliris Mobile Limited, a Nigerian company.

AfriOne’s Gravity Z1, Nigeria’s first locally produced smartphone, produced at AfriOne’s new factory in Lagos, is another mobile phone launched in 2017.

It is estimated that just 35 per cent of Nigeria’s 200+ million population has mobile phone. That leaves a huge space for local manufacturers like ITF and AfriOne to key in. 

Fintech drives Nigeria’s economy

Financial Technology (fintech) is now the major driver of the country’s economy, bringing up more startups and providing a lifeline for the financial sector, supplying blood to e-commerce and the creative industry thereby producing young millionaires.

In Yaba, Lekki and Ikeja; all in Lagos; more fintech companies have sprang up with youths doing great stuffs for them. Similar news is heard from Kano, Kaduna, Abuja, Aba, Enugu, Ibadan and Port Harcourt.

Nigerian youths are doing software development, robotics engineering, among other tech stuffs.

5G coming next year

According to the Executive Vice Chairman of NCC, Prof Umar Garba Danbatta, the 5G telecom technology would further transform Nigeria’s economy when it becomes operational in the country next year.

Prof Danbatta said, “5G will revolutionise and transform our way of life. From education to agriculture, security to entertainment and governance in general. On education, 5G will transform our educational system. The availability of a fast wireless network will enable virtual learning. “For our educators, 5G will empower them to reimagine what is possible inside and outside their classrooms. The ability to download high quality and feature-length documentaries in seconds, hosting a guest speaker via hologram or tutoring students virtually in real-time will speak to a 5G-powered Nigeria.’’

The NCC boss further said Artificial Intelligence (AI) would revolutionise healthcare because 5G would make it easier to determine potential diagnosis and decide on best treatment plans.

He explained that, “By moving to the 5G network, healthcare organisations can use AI tools they to provide the best care possible from wherever they are in the hospital or clinic.’’

He added that 5G would support businesses’ innovative ambitions and create new markets, transforming supply chain management and creating smarter and more efficient manufacturing, and that it was also a fundamental platform for the Internet of Things (IoT) – the rapidly expanding number of devices that collect, transmit and share data via the internet.

Prof Danbatta said studies had shown that by the end of 2021 more than half of all new businesses would rely on IoT to cut cost, build efficiency and grow their bottom lines.

He explained that, “5G will allow us to stream, download and upload huge quantities of data at a much faster rate than we are currently able to. This means higher definition video either from TV or using video conferencing. Additionally, 5G is designed to facilitate a wealth of new applications for wireless technologies.

“Driverless cars and drones will be able to safely and near-instantaneously send and receive information about their surroundings that will allow them to operate safely.’’

He said many countries were looking up to 5G to better connect rural communities, allowing more people to start businesses from home and opening up opportunities.

By the time Nigeria celebrates its 62nd independence anniversary next year, the 5G technology “magic” would have ushered in more innovative ideas for Nigerian youths and further accelerate the economy to a higher level. This is if all the talk about it by experts and officials is anything to believe.