Friday, November 25, 2016 10:24 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 September 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 more recently, possibly as a result of high market penetration leaving less room for large expansion.
In September 2016 – the end of the third quarter – there were 153,271,581 subscribers, compared with 149,803,714 in June 2015, which represents a quarterly increase of 2.31%. The number of subscribers had therefore surpassed its previous peak of 152,123,172, attained in November 2015.
The yearly increase in total subscriber numbers was 1.73%; this was an increase compared to the yearly growth rate of 0.69% at the end of the previous quarter. This ends a decline in the year on year growth rate that had been witnessed over the past year. From the end of the second quarter of 2015, until the same period in 2016, the year on year growth rate had declined consistently, from 12.05% to 0.69%.
As in the previous quarter, the increase in subscriber numbers was despite a quarterly fall in CDMA subscribers of 39.15%, which compounded previous quarterly falls leading to year on year fall of 86.47%; a larger decline than in the previous quarter.
The number of fixed wireless subscribers also recorded a large decline, of 31.87% compared to the previous quarter and 53.68% 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
Subscriber data is broken into four sections according to the technology type used. The first two are for mobile technology; Global System for Mobile Communications (GSM) and Core Division Multiple Access (CDMA), whilst the latter two are fixed lines, either wireless or wired. Mobile subscribers using GSM dominate, and accounted for 99.72% of the total in September 2016, followed by CDMA with 0.18% of the total, whist fixed wired and wireless make up 0.08% and 0.02% respectively.
The dominance of GSM users has increased since September 2015 when 98.52% 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 estimates1. 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 September 2016, the total number of GSM subscribers was 152,836,997, an increase of 4,409,954, or 2.97% relative to September 2016. This is 1.13% points higher than the year on year increase in the previous quarter, and therefore is in contrast to the downward trend in this growth rate witnessed over the previous year. The number of GSM subscribers has now increased in every month since April.
This was the first quarter since the previous year in which each GSM provider recorded positive quarter on quarter growth in subscriber numbers. MTN recorded the largest quarterly increase of 3.68%, to reach 60,558,569 subscribers compared to 59,409,767 in June.
This was MTN’s highest quarterly growth rate since 2014, and the first quarter since 2014 in which MTN recorded the highest growth rate among GSM providers. Airtel recorded the second largest quarter on quarter growth rate of 2.49%, with 32,775,916 subscribers compared to 31,978,848 in June. Globacom and Etisalat had 36,967,712 and 22,544,800 subscribers respectively, and recorded growth rates of 1.78% and 0.29%.
This contrasts sharply with the year on year performance of each provider. The provider to record by far the highest growth rate, as well as the highest growth in absolute numbers, was Globacom. This provider recorded a year on year growth rate of 18.08%, and gained 5,661,240 subscribers over the period.
The provider to record the second highest growth rate was Airtel, who recorded growth of 5.27% year on year. Airtel had followed a similar trend to Globacom until March 2016, after which Airtel’s subscriber numbers declined, and Globacom’s continued to grow.
Notwithstanding the recent strong quarterly growth rate, MTN recorded a year on year decline of 3.10%, or 1,935,163. In absolute terms this fall was larger than the decline in the number of Etisalat subscribers of 1,641,291, although as Etisalat had a smaller number to be begin with, the year on year decline was larger in percentage terms, at 4.08%.
As a result of these trends, MTN regained slightly more market share relative to the previous quarter, with an increase in its share of subscriber numbers from 39.15% in June to 39.62% in September, although this is still below the share of 42.10% in September 2015. Airtel was the only other provider to increase its share relative to the previous quarter, and saw a marginal increase from 21.44% in June to 21.45% in September 2016.
This was also an increase relative to the previous year, when Airtel’s share was 20.98%. In contrast to previous quarters, Globacom’s share fell from 24.35% in June to 24.19% in September 2016, although this remains significantly above the 21.09% recorded in the previous year. Etisalat also saw a reduction in its share at 14.74% in September 2016, compared to 15.06% in June and 15.83% in September 2015.
Mobile Subscribers (CDMA)
In September 2016, at the end of the second quarter of 2016, there were 276,304 CDMA subscribers, which represents a decline of 39.15% relative to the end of the previous quarter.
This decline, while notable, was nevertheless smaller than the decline of 61.19% at the end of the previous quarter, and smaller than the decline of 45.55% in first quarter. As a result of this downward trend, the number of CDMA subscribers fell from 2,042,015 in September 2015, to 276,304 in September 2016, a year on year fall of 86.47%.
The number of Multilinks subscribers remained unchanged relative to the previous quarter, at 4,460. The quarterly decline was therefore entirely as a result of the number of Visafone subscribers falling from 449,632 in June 2016 to 271,844 in September, a decline of 39.15%.
However, both providers recorded year on year falls, of 86.62% for Visafone, and of 56.33% for Multilinks. The overall number is still driven by Visafone to a large extent, as despite the recent falls, Visafone is still the dominant CDMA provider. Visafone accounted for 98.39% of CDMA subscribers in September 2016, slightly lower than the proportion in the previous quarter of 99.02%, and the proportion in September 2015 of 99.50%.
Fixed Wireless Line
As with CDMA subscribers, the number of fixed wireless line subscriptions dropped sharply in September 2016, by 31.87% relative to the previous quarter, which continues the trend recorded over the past year. Since September 2015, the number of fixed wireless subscribers has fallen in every month, from 66,319 to 30,716 in September 2016, which represents a year on year fall of 53.68%.
The number of Multilinks fixed wireless line subscribers remained unchanged compared to the previous quarter, at 428, as with CDMA subscribers with this provider. Therefore, the decline in fixed wireless subscriber numbers was also driven entirely by Visafone, who recorded a decline of 32.18% relative to the end of the previous quarter.
Year on year however, Multilinks recorded a much higher decline in percentage terms, of 85.36%. However, although Visafone recorded a smaller year on year decline of 52.22%, the fall in absolute terms was much higher, given the larger number of Visafone subscribers.
Given these trends, the share of fixed wireless line subscribers was 98.61% in September 2016, still higher than the share of 95.59% recorded in the September 2015, but lower than the share of 99.05% recorded in the previous quarter.
Fixed Wired Line
Compared to subscribers with other technology types, the number of fixed wired line subscribers remained stable. There were 127,564 subscribers in September 2016, 1.68% more than the 125,452 subscribers recorded at the end of the previous quarter, and 1.84% more than the 125,254 subscribers recorded in September 2015.
There was significant variation in the movement of number of subscribers with each of the four providers of this technology type. MTN had 8,591 subscribers in September 2016, and recorded both the highest quarterly increase of 14.36%, and the largest year on year decline of 11.72%, from 7,512 in June and 9,731 in September 2015 respectively. IpNX recorded a similar year on year decline, of 10.14%, to reach 2,587 subscribers.
However, this number was only 0.39% lower than that recorded at the end of the previous quarter. As with the GSM technology type, Glo was the provider to record the largest year on year increase, of 7.25%, to reach 12,503 subscribers in September 2016, up from 11,658 in September 2015. Much of this increase was recorded in the third quarter; Glo’s quarterly growth rate was 6.04%.
The number of subscribers with 21st Century was comparatively stable, with growth rates lower than all other providers in percentage terms, but as the largest provider of fixed wired lines, these movements nevertheless had a larger effect on the total.
At the end of the third quarter they had 103,883 subscribers, which represents an increase of 1.68% relative to the 103,552 subscribers recorded at the end of the second quarter, and an increase of 1,84% relative to the 100,986 subscribers recorded in September 2015.
As a result of these trends, 21st Century accounted for 81.44% of fixed wired line subscribers at the end of the third quarter, compared with 80.62% in the same period of the previous year. Glo, MTN and IpNX accounted for 9.80%, 6.73% and 2.03% respectively, at the end of the third quarter of 2016.
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