The decline in foreign direct investment (FDI) into the telecoms sector in 2022, with capital inflow falling by about 50%, may have been considerably influenced by difficult economic conditions, instability, and the foreign currency (FX) crisis.
The Nigerian Communications Commission (NCC), the country’s telecoms regulator, places the amount of foreign direct investments (FDIs) that entered the sector in 2022 at $399.9 million, compared to the $753 million recorded in 2021, showing a difference of $353.1 million or 46.7 percent.
NCC also reported that the contribution of the telecoms industry to the gross domestic products (GDP) increased from 12.61% in the fourth quarter of 2021 to 13.55% in the fourth quarter of 2022, based on statistics from the Central Bank of Nigeria (CBN).
According to the 57-page report, which detailed all activities and investments related to the telecoms sector in 2022, the domestic capital expenditure (CAPEX) as of December 2022 was N785.7 billion, with operating costs of N2 trillion and revenue of N3.88 trillion. This information was based on submissions from responsive service providers in the sector.
With an operating cost of N1.99 trillion and revenue of N3.329 trillion, further study of the data revealed that GSM operators MTN, Globacom, Airtel, and 9mobile spent N718.3 billion on capital expenditures (CAPEX).
When compared to the N3.2 trillion reported in 2021, the GSM carriers’ earnings increased by 18.7%.
The data also demonstrated the dominance of mobile network providers, who generated 86% of the sector’s revenue.
Fixed wired operators made an investment of N61.3 million, used N841.7 million to operate, and made N385 million. The CAPEX spend by internet service providers was N5.24 billion, with operating costs of N71.2 billion and revenue of N92 billion.
The suppliers of value-added services (VAS) reported CAPEX of N417 million, operating expenses of N14.9 billion, and revenue of N40.7 billion.
Companies that provide colocation and infrastructure sharing made N3.2 billion in revenue, paid N3.18 billion in operating expenses, and invested N326.9 million. According to NCC, other telecom operators invested N524 million in CAPEX, ran their businesses with N6 billion, and earned N5.59 billion in revenue.
Further examination of the NCC numbers, which were prepared by the Commission’s Policy Competition and Economic Analysis Department, revealed that Nigerian telecom users used 518,381.89 terabytes of data in total in 2022.
This indicated that when compared to the 353,118.89 terabytes consumed in 2021, data consumption in the nation grew by 47%.
The research states that from 141.9 million in December 2021 to 154.8 million in December 2022—a 9.06% increase—the number of Internet subscriptions across the networks also rose. In addition to the rise in subscriptions, which increased data consumption, MTN’s launch of 5G in the year also played a role in the growth.
NCC reports that as of December 2022, there were 222.5 million active subscriptions across all telecom networks, up from 195.4 million in 2021. This revealed that the operators increased the number of active subscriptions by 13.86%, or 27.1 million, during the course of the year.
The Commission said: “The increase in the Operators’ subscriber base was attributed to several reasons which include subscriber loyalty, promos, seasonal effects, aggressive consumer acquisition drive, and competitive product offerings across all the networks.”
“The increase in Active Subscription impacted positively on other derived telecoms indicators such as Teledensity, Internet Penetration as well as Broadband Penetration.”
Meanwhile, the NCC said that significant deployments of telecoms infrastructure by the service providers were seen in the year under review in terms of industry infrastructural development.
According to the NCC, a total of 34,862 towers from telecom providers around the nation were reported. The operators reported a total of 127, 294 base stations, according to the Commission, while the microwave coverage measured in 2017 was 289, 270.48 km. It revealed that as of December 2022, there were 125 Gateways overall in use in the telecoms sector, and that the entire length of fiber optic deployment—terrestrial fiber and submarine cable—was 96,198 km.
