June 25, 2024

Groupe Special Mobile Association (GSMA), the umbrella body of mobile operators globally, has said that only 29 per cent of Nigerians have regular access to mobile internet, leaving out 71. 

The body disclosed this in its Digital Economy Report focusing on Nigeria.

According to the report, this is due to several industry challenges limiting telecom coverage expansion.  

The GSMA noted that Nigeria would need to put in place an enabling policy and regulatory framework that will be critical to realising the full potential of the country’s digital transformation, as recognized in the country’s Strategic Plan 2023 – 2027 as well as the Federal Ministry of Communication’s National Broadband Alliance for Nigeria (NBAN).  

It added that a broader digital transformation of the Nigerian economy is not possible without universal access to digital connectivity. 

Noting that Nigeria could add 15 million internet users by 2028 with the right policy, GSMA said, “While 29% of Nigerians are regularly using mobile internet, there remains untapped potential, 71% are not accessing these services regularly.

“An improved policy environment has the potential to help the industry boost coverage and adoption, resulting in 15 million additional internet users by 2028. However, the sector faces challenges to infrastructure deployment.”

It said the challenges include the complex and costly process of securing Rights of Way (RoW), significantly increasing the time and costs associated with rolling out infrastructure. 

GSMA also noted that the complex tax environment in Nigeria provides for high and increasing costs of tax compliance because of the complex and overlapping tax structure within the country. 

“Increasing costs are making it difficult for the industry to maintain sustainable levels of investment.

The primary driver of this has been increases in the cost of power for sites due to the rapid increases in the price of fuel, increased government fees and levies, and increased demand for forex, in an import-dependent environment, due to contractual obligations for network infrastructure and services that are denominated in USD.”  

Emphasizing that the mobile industry is a key partner for the government in achieving its objectives, the report recommends initiatives to support policymakers in creating an economic and regulatory environment that supports growth, investment, and competition.  

According to the report, the initiatives include: implementing a legal framework for Critical National Infrastructure to address challenges in building network infrastructure; simplifying and improving the process for issuing RoW and standardizing it across the country; reducing the industry’s tax burden to help cut operating costs; and creating a regulatory environment that supports sustainable investment. 

Commenting on the report, the Head of Sub-Saharan Africa at the GSMA, Angela Wamola, said, “High-speed connectivity is the bedrock of any digital nation, and the Nigerian government recognizes the mobile industry’s role in laying key foundations on which digital transformation is built.

“Future policies should be geared towards reducing the cost and complexity of infrastructure rollout to encourage investment and boost the adoption of mobile broadband. The impact of such actions would go far beyond mobile, driving productivity gains across the economy and creating millions of new jobs in Nigeria.”

The GSMA report was launched amid ongoing debate over Nigerian telecom operators’ demand for a tariff increase. While the operators said an increment is expedient to mitigate the impacts of the various challenges they are facing in the industry, the government wants them to explore other alternatives to address their challenges.  

According to the Minister of Communications Innovations and Digital Economy, Bosun Tijani, increasing data, voice, and text message prices is not the “sole or optimal solution” to the sector’s challenges.
“We have to deepen and address so many of these things. The solutions to these things will not come from one single thing, which is raising the tariff, that’s never going to be the solution. There are tons of other things that can be done to ensure that the business environment is conducive for the investors in this phase and the government is articulating that including the tariff conversation,” he said.

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