Nigerians Spend N2 Trillion on Calls, SMSes

Nigerians are said to have spent some N2.14 trillion on phone calls and sending short message service (SMS) between January, 2011 and December, 2012, according to a report released by FBN Capital Research.

With a total total subscriber base of 113.2 million, the report said that operators see more opportunities in the provision of data services to the subscribers and are investing to tap into the new cash cow of the telecoms sector..

“Nigerians spent an estimated N2.14trillion ($13.7b) on calls and text messages between January, 2011 and December, 2012, but the operators see a lucrative future in the supply of data services.

The research also found that MTN has said that its data sales doubled in 2012, albeit from a low base.

“A pick-up in the sale of smartphones has helped, and their pricing has become more competitive

Statistics from the industry regulator, the Nigerian Communications Commission (NCC), showed that the number of active telecoms lines increased by 19.0 per cent year-on-year (y/y) in January to 113.2 million.

“This rate of expansion compares very favourably with annual demographic growth, which the United Nations estimates at 2.4 per cent and the Federal Government of Nigeria at more than 3.0 per cent. The operators have not exhausted the pool of potential new subscribers, judging from the current teledensity rate of 68.5 per cent on an estimated population of 167 million.

“We cannot quantify the incidence of the user with several handsets, but we can say that it is generally driven by poor quality service. It should decline with the planned introduction of number portability if we treat at face value the confidence of some operators on the basis of their investments that they will take business off their competitors,” the report averred.

Sector analysts, say data sales will be constrained by flaws in the broadband infrastructure, and the high cost for the operators of right of way (RoW) procurement and building approvals from multiple regulatory and revenue collection agencies of government.

Despite the landing of submarine cables, like MainOne, Glo 1 and the West African Cable Systems (WACS), heavily funded by MTN, the user experience in data has been provocative.

Owners of these cable companies complain of dearth of middle and last mile infrastructure to take the bandwidth from the shore to the end users.