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Nigeria’s telecoms sector soars, adds N1.398 trillion to GDP in Q3 2016 —Report

With a contribution of nearly N1.4 trillion (1.11 per cent 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 this month by the National Bureau of Statistics (NBS) stated that telecommunications contributed N1.398 trillion, representing 1.11 per cent 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 Technology contracted 0.95 per cent in Q3 2016 from 1.49 per cent in Q2 2016 and 4.69 per cent in Q3 2015.

The ICT sector contributed 9.9 per cent 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 per cent it contributed in the preceding quarter.

The sector grew by 1.11 per cent in real terms, year on year in the Q3 of 2016 from the recorded rate in the period of 2015, which was 4.16 per cent point lower and also lower by 0.25 per cent 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 are 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 N1.5 trillion and Q3 of 2015 is N1.3 trillion and Q4 of 2015 is N1.6 trillion which is a total of N5.9 trillion for the year 2015.

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

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 per cent market share while 0.2 per cent is reserved for other operators.

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

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

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

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