Telecoms Sector Soars, Adds N1.398Trillion to GDP in Q3 2016

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ABUJA, NOVEMBER 28, 2016 – With a contribution of nearly N1.4 Trillion (1.11 percent growth in the real term) to the Gross Domestic Product (GDP) in the third quarter of 2016, the telecommunications sector still remains the toast of the economy.

Reports released on November 21, 2016 by the National Bureau of Statistics (NBS) state that telecommunications contributed N1.398Trillion representing 1.11percent addition to the GDP. Although this figure is slightly lower than the N1.5 trillion recorded in quarter 2 of 2016, the NBS says the figures reflect the signs of the times.

The GDP for Telecommunication as at Q3 of 2016 under Information and Communication contracted 0.95% in Q3 2016 from 1.49% in Q2 2016 and 4.69% in Q3 2015.

The Information and Communication Sector contributed 9.9% to total Nominal GDP in third quarter of 2016, which is the same rate as recorded in the same Quarter of 2015, but lower than the 12.6% it contributed in the preceding quarter.

The sector grew by 1.11% in real terms, year on year in the Q3 of 2016 from the recorded rate in the period of 2015, which was 4.16% point lower and also lower by 0.25% points when compared with the rate recorded in the second quarter of 2016.

The International Standard Industrial Classification (ISIC Revision 4.0); is the international reference for the classification of productive activities. Its main purpose is to provide a set of activity categories that can be used for the collection and reporting of statistics.

Revisions of the ISIC on the Gross Output is based on the Revenue from telephone, telex, facsimile, telegraph and other income from satellite and internet services.  The Intermediate consumption while Transit fees, operational expenditure, minor repairs and maintenance and other expenses of the telecommunication and information services are recorded in the ISIC Report.

The Gross Domestic Product constant basic prices for information and communication under the Telecommunications and Information Service as at Q1 of 2015 is N1.3Trillion and Q2 of 2015 is N1.5Trillion and Q3 of 2015 is N1.3Trillion and Q4 of 2015 is N1.6Trillion which is a total of N5.9Trillion for the year 2015.

Mobile telephone subscription increased from 149million in Quarter 2 of 2016 to 153million as at September, 2016 (Q3) and teledensity now is 109percent.

There are currently five Mobile Network Operators(MNOs) viz Airtel Nigeria Limited, Etisalat Nigeria, Globacom Nigeria Limited, MTN Nigeria Communications Limited and NATCOM Consortium trading as ntel.

Fixed/Fixed Wireless Operators include IPNX, 21st Century Nigeria Limited, Glo Wired and MTN Wired in that order who have contributed to the growth of the sector meaningfully.

There is a new entrant, Smile Communications providing Voice Over Internet Protocol services among others.

In general terms, MNOs control about 99 percent market share while 0.2 percent is reserved for other operators.

Internet subscriptions rose from 31.1million in 2012 to 93.6million as at September, 2016 representing about 200% growth rate.

In terms of market shares by GSM operators or (MNOs), MTN controls about 40percent of the market with 60.5million active subscribers base.

Globacom has 36.9million subscribers while Airtel and Etisalat have 32.7million and 22.5million subscribers respectively.

With anticipated new investments in the areas of broadband Infrastructure in the next few months, the sector which already has about $68Billion total investments so far is likely to add more to the National GDP.

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