Tuesday, January 31, 2016/ 10.47 AM / NBS
Telecommunications in GDP and Growth
In real terms, the telecommunications sector contributed N 1,399 billion to GDP in the third quarter of 2016, or 8.0%, which represents a decrease of 1.8% points relative to the previous quarter.
However, due to differing seasonal patterns, telecommunications tends to account for the lowest share of GDP in the third quarter. The share of telecommunications in total real GDP had declined throughout 2010 to 2014, but for the last six quarters growth in telecommunications has been higher, meaning the trend has reversed.
Although growth in the telecommunications sector remained positive, in contrast with the economy as a whole, year on year growth nevertheless dropped in real terms from 1.5% in the previous quarter to 0.9%, the lowest rate since 2011 Q3.
Subscribers as of December 2016
Subscribers as of December 2016
The total number of subscribers has increased rapidly over the past decade; at the end of 2005 there were 19,519,154 subscribers, but by the end of 2015 there were 151,017,244, which is equivalent to an increase of 13,149,809 every year. However, growth has been declining recently, possibly resulting from high market penetration leaving less room for large expansion.
In December 2016 – the end of the fourth quarter – there were 154,529,780 subscribers, compared with 153,299,535 in September 2016, which represents a quarterly increase of 0.80%. Growth had continued unabated since April, before which subscriber numbers had fallen for several months.
The yearly increase in total subscriber numbers was 2.33%, which is slightly higher than the yearly increase of 1.75% recorded in the previous quarter. Last quarter's growth rate has been revised up slightly (from 1.73%) following the inclusion of VoIP services, in addition to the four services (GSM, CDMA, Fixed Wired and Wireless) discussed in previous reports.
The numbers are small relative to the total, possibly due to the service being newer. As in the previous quarter, the increase in subscriber numbers was despite a quarterly fall in CDMA subscribers of 21.26%, which compounded previous quarterly falls leading to year on year fall of89.87% in December, a fall surpassed only by the year on year fall of 89.88% in November.
The number of fixed wireless subscribers also recorded a large decline, of 12.54% compared to the previous quarter and 55.03% year on year. However, by far the most popular technology type is GSM, and therefore this technology type has a much larger effect on movements in the total number of subscribers.
Subscribers by Technology Type
In contrast to previous publications, subscriber data is broken into five sections according to the technology type used, following the inclusion of the newer VoIP technology by NCC. This stands for “Voice over Internet Protocol”, and so far, the only provider recorded by NCC is Smile.
The other technology types include two mobile technologies (Global System for Mobile Communications (GSM) and Core Division Multiple Access (CDMA)) and two fixed lines, either wireless or wired. Mobile subscribers using GSM dominate, and accounted for 99.74% of the total in December 2016, followed by CDMA with 0.14% of the total, whist fixed wired and wireless make up 0.08% and 0.02% respectively. VoIP also accounted for 0.02%. The dominance of GSM users has increased since December 2015 when 96.22% of subscribers used this technology type; largely as a result of the continuing decline of CDMA users. The number of subscribers using fixed wireless lines has also decreased sharply, although this was from a low level and therefore only had a small effect on the total.
The proportion of fixed wired lines remained relatively stable. The dominance of GSM over CDMA in the mobile technology is characteristic worldwide; GSM accounted for over 80% of the global market in 2009 Q2 according to industry estimates. With GSM technology, it is cited as being easier to switch networks, and it is regarded as being more accessible for international use, especially given that some markets (such as in Europe) have mandated the technology by law. However, CDMA is more prevalent in the United States.
Mobile Subscribers (GSM)
In December 2016, the total number of GSM subscribers was 154,124,602, an increase of 5,443,240, or 3.66% relative to December 2015. This is 0.69% points higher than the year on year increase in the previous quarter. The number of GSM subscribers has now increased in every month since April. Compared to the previous quarter, there were 1,287,605 more GSM subscribers in December, at the end of the fourth quarter, an increase of 0.84%.
The largest quarterly increase recorded by any GSM provider was Airtel, whose number increased by 4.09%, from 32,775,916 to 34,116,409. By contrast, Etisalat recorded their largest quarterly decrease in subscriber numbers yet, of 7.65%, and were the only company to record a decrease in December.
As a result, there were 20,809,889 Etisalat subscribers, compared with 22,534,800 at the end of the last quarter. Globacom and MTN had 37,357,843 and 61,840,461 subscribers respectively, and recorded quarter on quarter growth of 1.06% and 2.12%.
Broadly speaking, the year on year performance was similar to the quarterly performance of GSM providers. Etisalat was the only provider to record a decline in subscriber numbers, of 1,351,401, or6.10%. Airtel gained 1,848,108 subscribers, a yearly increase of 5.73%. MTN gained 588,704 subscribers, an increase of 0.96% year on year. The largest yearly increase in the number of subscribers however was Globacom, who recorded an increase of 4,358,459 subscribers, or 13.21%. This accounted for 80% of the total increase in GSM subscribers, despite MTN remaining the larger provider.
These trends did not change the overall ranking of GSM providers in terms of size. MTN accounted for 40.12% of subscribers; a slightly smaller share of the market than at the end of 2015, but larger than in any intervening quarters. Etisalat also recorded a decline in its market share relative to the previous year, and in December 2016 accounted for 13.50% of subscribers. Airtel and Globacom both increased their shares over the same period, to 22.14% and 24.24% respectively. Globacom's increase was larger however, at 2.04% points, compared to 0.43% points for Airtel.
Mobile Subscribers (CDMA)
In December 2016, at the end of the third quarter of 2016, there were 217,566 CDMA subscribers, which represents a decline of 21.26% relative to the end of the previous quarter. However, this decline was less significant than those recorded in previous quarters: in the second and third quarter the number declined by 61.19% and 39.15% respectively. As a result of these quarterly declines, the number of CDMA subscribers fell from 2,148,727 in December 2015, to 217,566 in December 2016, a decline of 89.87%.
The number of Multilinks subscribers remained unchanged relative to the previous quarter, at 4,460. This has been the number of Multilinks subscribers recorded by NCC since May 2016. The quarterly decline therefore entirely resulted from the number of Visafone subscribers falling from 271,844 in September to 213,106 in December 2016, a decline of 21.61%. However, both providers recorded year on year falls, of 90.04% for Visafone and 47.08% for Multilinks. Despite the larger yearly fall recorded by Visafone, they remain the dominant CDMA provider. Their share was 97.95% in December 2016, slightly lower than the shares of 98.39% in September 2016 and of 99.61% in December 2015.
Fixed Wireless Line
As with CDMA subscribers, the number of fixed wireless line subscriptions fell in December 2016, by 12.54% relative to September 2016, and by 55.03% relative to December 2016. Since September 2015, the number of fixed wireless subscribers has fallen every month, except for December 2016 in which there was no change.
As with CDMA subscribers, the number of Multilinks subscribers recorded by NCC has remained the same since May 2016, at 428, and therefore this provider recorded no quarterly change. Visafone however recorded a quarterly decline of 12.71%. Year on year, Multilinks recorded a much larger decline than Visafone, of 82.07% compared to 53.91%, although in absolute terms Visafone's decline was greater, given the larger number of Visafone subscribers. Given these trends, Visafone's share of fixed wireless subscriptions was 98.41%, compared to 98.61% in September 2016 and 96.00% in the December of the previous year.
Fixed Wired Line
Compared to subscribers with other technology types, the number of fixed wired line subscribers remained stable. There were 127,648 subscribers in December 2016, only 0.19% more than the 127,564 recorded in September, and only 0.07% more than the 127,410 recorded in December of the previous year.
This stability in the overall number masks large changes in subscriber numbers with each provider. The largest change was with MTN, who recorded a quarterly decline of 24.40%, and a yearly decline of 33.41%, and recorded 6,495 subscribers in December 2016. IpNX also saw declines in their subscriber numbers, with a quarterly decline of 4.60% and a yearly decline of 12.58%, and therefore recorded 2,498 subscribers in December 2016.
In percentage terms, the increases in subscriber numbers of the remaining two providers were considerably smaller, however due to the relative size of each provider, the increases were slightly larger in absolute terms, resulting in a small increase overall in fixe wired line subscriptions. There were 12,643 Glo Fixed subscribers in December 2016, an increase of 1.12% relative to the previous quarter and of 7.97% relative to the previous year. 21stCentury had 106,042 subscribers, a quarterly increase of 2.08% and a yearly increase of 2.83%.
These movements represented a continuation of trends seen in previous quarters. 21st Century, already by far the largest provider, increased its share of the fixed wired market to 83.07%, from 81.44% in September 2016 and 80.94% in December 2015.
Similarly, Glo Fixed increased its share to 9.90%, from 9.80% in September 2016 and 9.19% in December 2015, entrenching its position as the second largest provider. MTN Fixed and IpNX each recorded declines in their market share; MTN's share was 5.09% in December 2016, compared with 6.73% in September 2016 and 7.65% in December 2015, and IpNX's share was 1.93%, compared to 2.03% and 2.22% in the corresponding periods.
NCC has started to record a fifth technology, VoIP (Voice over Internet Protocol). Currently, the only provider recorded is Smile. The first month in which Smile recorded subscribers was July 2016, in which month they had 18,262. This increased steadily and consistently until November, when 33,142 subscribers were recorded. In December the number fell slightly, to 33,099, but this still represented growth of 18.41% relative to the end of the previous quarter in September, when there were 27,954 subscribers.
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