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COVID-19: How Telecoms Sector Contributes N2.3 trillion to Economy in Quarter 2 GDP

Despite the economic impact of the COVID-19 pandemic, Nigeria’s telecommunications and information services sectors remain the enablers of growth with N2.3 trillion or 14.30 per cent Gross Domestic Product (GDP) contribution in the second quarter of 2020.

The figures, which were released by the National Bureau of Statistics (NBS), showed an increase of 31.43 per cent. The breakdown reveals that the contribution of the sector translates to N2.272 trillion up from N1.821 trillion in the first quarter of 2019.

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While the entire ICT industry recorded 17.83 per cent in the second quarter, the 14.30 per cent contribution of the telecoms sub-sector was unprecedented, far and above oil and gas, and other non-oil sectors.

However, the Nigerian Communications Commission [NCC] contributed to the achievement of this milestone through some of its efforts and strategy it executed during the period of lockdowns from the end of March 2020.

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The Executive Vice Chairman of the Commission, Prof Umar Danbatta in conjunction with the supervising ministry had developed e-platforms to handle all requests from the licensees to ensure that regulatory services are provided to sustain service delivery to subscribers during the period.

NCC also approved and encouraged resource sharing among network operators and secured Right of Passage (RoP) for all telecommunications companies and suppliers for easy movement during the lockdown.

These measures had enabled the operators to service their base stations and ensured seamless services for telecom consumers who increasingly relied on the networks during the pandemic.

Working with the ministry, NCC is resolving the problem of the high cost of Right of Way (RoW) with the Nigerian Governors Forum (NGF). Through these engagements, the state governors have lent their support for robust broadband infrastructure.

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The EVC explained that the “Commission is hopeful that with the reduction in RoW, which will automatically result in a reduction in capital expenditure (CAPEX) by the network operators, telecom companies will sooner than later reciprocate the gesture by making their services more affordable to Nigerians”.

In 2015, telecoms’ contribution to the GDP was eight per cent. This has grown significantly quarter-on-quarter and year-on-year to reach the current milestone of 14.30 per cent.

Industry stakeholders have attributed the second quarter contribution of the telecoms sector, which represents a leap from the 10.88 per cent in Q1 2020, to the sound regulatory environment enthroned by the NCC.

The stakeholders, including the Association of Telecoms Companies of Nigeria, (ATCON), Association of Licensed Telecoms Operators (ALTON), and the National Association of Telecoms Subscribers (NATCOMS), who spoke with The Guardian on the matter, commended the regulatory framework driving the digital frontiers in the last five years.

According to The Guardian newspaper, ALTON Chairman, Gbenga Adebayo, thanked all industry players for their resilience and consistency of purpose.

Adebayo hinged the growth on so many factors including the investor-friendly policy and regulatory environment championed by the leadership of NCC, the commitment of all stakeholders, consistent investment in network maintenance and expansion, and sacrifice by sector operators.

To sustain this growth, the ALTON Chairman said the country should continue to invest in network expansion and maintenance operations, access to foreign exchange to procure network critical equipment, consistency in policy and policy environment.

Adebayo said there should be access to spectrum and friendly policies around its allocation, assignment and cooperation between the stakeholders.

ATCON President, Olusola Teniola, said: “telecoms industry has remained bullish owing to the quality of leadership at the helm of affairs at the Commission.”

He added that NCC had become a reference point in the telecom regulatory ecosystem in Africa and beyond.

In the same vein, President of National Association of Telecoms Subscribers of Nigeria (NATCOMS) Adeolu Ogunbajo, said the proactive regulatory approach of Danbatta has helped made telecoms “the oxygen that keeps economic activities afloat during the lockdowns and consumers are appreciative of the fact that the Commission, working with its supervising Ministry, didn’t allow the consumer to suffer serious disruption to quality of service and quality of experience.”

Effective regulatory regime, backed by various initiatives of the Commission and efforts of the supervising Ministry of Communications and Digital Economy at addressing industry challenges, is providing the needed digital valves that have supported the economy from collapse, since the outbreak of COVID-19 pandemic in the country.

The increase in broadband penetration, internet usage, number of access to telephone and several other initiatives by the Commission, especially in the areas of driving tech innovations, employment creation, promotion of digital inclusiveness, which are policy directions of NCC, an industry regulator, has, in the last five years, boosted the sector’s contribution to GDP.

These policy activities have also enhanced the growth of digital-based activities across other sectors of the economy increasing efficiency and effectiveness in economic operations.

Speaking recently at the Commission’s first virtual telecoms consumer parliament (VTCP), Prof. Danbatta noted that the Commission has always been innovative and proactive in its regulatory activities by ensuring that the economy remains afloat despite the restrictions occasioned by the pandemic.

Regardless of this, Prof Danbatta maintained that the Commission and the mobile network operators needed to play their roles in sustaining the quality of service delivery and quality of experience by the consumers, who are critical stakeholders in the telecoms sector.

According to him, regulatory efforts have also resulted in presidential approval directing security agencies to protect ICT and telecom facilities as critical national assets. He added that this has helped to safeguard telecom infrastructure for the greater role telecom has to play with the outbreak of COVID-19 pandemic.

Meanwhile, he has strongly charged the service providers to constantly upgrade and expand their network capacity in order to deliver top-notch QoS to their consumers.

MTN