October 19, 2020 / 8.20AM / Bukola Akinyele for WebTV / Header Image Credit: NBCC
Despite achieving double-digit growth in Q2, 2020 the telecommunications sector will require robust broadband infrastructure investments in Nigeria, to achieve scale and productivity for the economy.
This was part of the takeaways from the Nigeria-British Chamber of Commerce (NBCC) webinar which discussed "Nigeria's Telecommunication Industry-POST COVID" and brought together experts and stakeholders in the sector.
Giving the opening remarks the Deputy President of the NBCC Mrs. Bisi Adeyemi on behalf of the President said COVID-19 has become one of the unprecedented events in history and brought to the fore the role of the telecommunication industry as a result of a general reduction in economic activities.
According to her people across the world have relied on technology to deal with the socio-economic realities which include working from home and leveraging video conferencing platforms for meetings and conferences.
The NBCC Deputy President acknowledged the fact that telecommunications has emerged as a key growth driver in the economy, and the forum hosted by the chamber was designed to provide an opportunity to push for a robust and enabling business environment for the industry to thrive and achieve accelerated growth.
In his presentation, Mr. Segun Ogunsanya, Chief Executive Officer and Managing Director Airtel Nigeria. admitted that during the early months of the pandemic with a total lockdown revenue for telecom firms dipped.
Speaking further, he said they also faced an initial reduction in consumer spending on services and products. According to him, the developments led to a paradigm shift to online engagements for social and economic activities.
Airtel's CEO also noted that there was a rise in demand for "data services" in the wake of the lockdown, an increase in capital expenditure and a decline in revenue for businesses due to a decrease in socio-economic activities.
From an economic perspective, Ogunsanya noted that the economic impact of the pandemic spanned five (5) key areas including GDP, Inflation rate, Crude-Oil price, Exchange rate and the Budget.
According to him, the GDP in Q1,2020 grew by 1.87% Pre-COVID-19 but contracted by -6.10% in Q2,2020.
He also highlighted additional economic indicators like the Inflation rate which increased from 12.26% Pre-COVID to 13.22% as of August 2020, the crude-oil price which crashed due to low demand, the official exchange rate which moved up from N306 per USD$ post-COVID-19 t0 N380 per USD$ post-COVID-19. The revised budget adjusted benchmark oil price from USD$57 to USD$28.
Ogunsanya highlighted the key areas that were impacted by social restriction to include;
In terms of how Airtel Nigeria has supported the economy, he said the telecommunications company has supported Lagos state, donated money to the national efforts at combatting COVID-19, provided testing kits and PPE materials and has also supported the Nigerian Centre for Disease Control, NCDC.
Looking ahead he said the outlook for the economy depends on flattening the curve: limiting the number of new cases, fighting the virus: balancing lives & Livelihood, restarting the economy, addressing the virus through a vaccine and exploring herd immunity.
On the outlook for the telecommunication industry Post pandemic, he said broadband will be vital to the growth of the industry from mobile, fibre optics, wireless, & analytics.
This will enable the following processes;
The Airtel Nigeria CEO stressed the need for fibres and wireless networks in other to boost internet access which has become a key necessity next to shelter, clothing and food.
He stressed the importance of data privacy, strengthening the protocols to prevent breaches that hurt businesses, maintaining and improving brand value, maintaining public, investor and customer trust, and supporting best practices & ethics.
According to him "The ultimate objective is to reduce the digital divide of those who have access to the internet and those who don't have".
"Airtel's role is to continue to deepen the penetration of broadband in line with the agenda of the federal government. This is good for telco's, the economy and everyone to create digital access which opens responsibilities to so many people from farmers, SMEs and big companies, which is an imperative that needs to be worked on".
He made a strong point that access to the internet is an enabler for providing equal opportunities to small and big companies alike.
Engineer Babagana Digima who represented Prof. Umar Garba Danbatta Executive Vice Chairman/ Chief Executive Officer, Nigerian Communications Commission (NCC) said Nigeria is one of the largest markets in Africa, and also the biggest segment is the information and communication sector of the economy.
In his presentation, Engineer Babagana Digima said as of March 2020 the beginning of the COVID-19 pandemic in Nigeria the Nigerian telecom industry had a teledensity of 99.09% and an internet penetration of 39.85%.
As of today, based on the August 2020 data the teledensity according to the NCC official was 106.62% while the broadband penetration was 43.3%.
He noted that Teledensity, broadband penetration, number of subscriptions and population coverage were some of the key indices recognized by the international telecommunications union (ITU) as a measure of economic development for nations.
He informed stakeholders that the total contribution of the telecom sector to the GDP of Nigeria increased from 10.88% in Q1, 2020 to 14.3% in Q2, 2020. He said the contribution of the telecom sector to the growth of the economy and well-being of the country is set to continue, as well-articulated policies of the federal ministry of communication and digital economy take shape.
Speaking further, he noted that the plan recognized 70% of local government headquarters and 60% of all base transceiver stations are to be connected with fibre as well as local manufacturing and assembling of three smartphones in the country.
Giving further details on the policy, he stated that the Minister of Communication has set out digital innovation, digital entrepreneurship and digital skills as key areas that will be given high priority.
Also, he noted that the commission's actions such as permitting the provision of mobile money services has resulted in the licensing of several payment service banks which are now helping towards the actualization of the 80% financial inclusion target of the federal government.
According to him, the telecoms sector during this pandemic in no doubt has managed to keep people connected, informed, entertained and enlightened on the disease which has helped in curtailing its spread.
He was optimistic that with the emphasis by the government for the development of the telecommunications infrastructure, the pandemic has brought the urgency on such interventions as doing business online is the new normal.
Digma said the country has accelerated the licensing of a new spectrum to usher in new technologies like 5G, TV Wide space broadband, corporate governance, satellite services and altitude platform services to address the telecom's infrastructure and services.