Telecoms Contributes N1.64bn To GDP Q4 2015 | Independent Newspapers Limited
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Telecoms Contributes N1.64bn To GDP Q4 2015

broadband, VAS
Posted: Apr 27, 2016 at 5:08 am   /   by   /   comments (0)



…Subscriber Base Drop By Almost a million


Emmanuel Okwuke LAGOS


The telecommunications industry in the last quarter of 2015 contributed about 8.8 percent to the nation’s gross domestic product (GDP), which in real terms amounted to N1.65 billion, according to data released by the National Bureau of Statistics on Tuesday. The contribution represents a marginal increase relative to the 8.76% contribution recorded in the corresponding period of 2014.

NBS, however, noted that total number of telecoms subscribers dropped from 149.7 million to 148.6 million in the period under review. In its fourth quarter Nigerian Telecommunications Sector Report, NBS explained that the drop in total subscribers was due to a decline in MTN (from 62.4 million to 61.2 million) and Etisalat (from 23.4 million to 22.1 million), while Glo and Airtel witnessed rises in their number of subscribers.

The statistical agency also said that “on a year-on-year basis, however, number of telecoms subscribers rose from 136.6 million in December 2014 to 148.6 million in December 2015.

The share of telecommunications in real GDP tends to fluctuate over the course of the year, due to different seasonal patterns, but nevertheless annual averages declined every year between 2010 and 2014.

The current contribution to GDP by the telcos may have enhanced the overall contribution of the services sector to GDP, which stood at 53 percent for the entire 2015. By this development telecommunications is fast assuming a leading place above agriculture in the growth of the country’s GDP.

In 2015, this trend was reversed; in each quarter the growth rate in the telecommunications sector was higher than for the economy as whole. As a result, the proportion of total annual GDP accounted for by telecommunications increased in 2015.

Equally, the total number of subscribers increased rapidly over the previous decade, and over the past year.

Between December 2014 and December 2015 (final month of Q4), the number had increased by 11.97 million, or 8.61%; a slightly lower growth rate than in previous years, possibly as market penetration is already high, which leaves less room for large expansion.

It also implies that the number of subscribers grew by significantly more than the sectors contribution to GDP over this period.

Most of the increase in the number of subscribers was attributable to additional Global System for Mobile Communications (GSM) subscriptions. The yearly increase between December 2014 and December 2015 was 8.78%, slightly higher than the growth in the overall number of subscriptions, but considerably higher than for other technology types.

Subscriber data is broken into four sections according to the technology type used. The first two are for mobile technology; Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA), whilst the latter two are fixed lines, either wireless or wired.

Mobile subscribers using GSM dominate, and accounted for 98.45% of the total in December 2015 followed by CDMA with 1.42% of the total, while fixed wired and wireless make up 0.08% and 0.04%, respectively. The dominance of GSM users has increased slightly since December 2014, when 98.29% of subscribers used this technology type.

However, it has decreased slightly since the end of the third quarter in September, when 98.52% of subscribers used GSM technology. The share of all other technology types has decreased between December 2014 and December 2015.

The dominance of GSM over CDMA in the mobile technology is characteristic worldwide; GSM accounted for over 80% of the global market in the second quarter of 2009, according to industry estimates. GSM technology is cited as being easier to switch networks, and it is regarded as being more accessible for international use, especially given that some markets (such as Europe) have mandated the technology by law. However, CDMA is more prevalent in the United States.

In December 2015, the total number of GSM subscribers was 148,681,362, an increase of 12,004,756 or 8.78% relative to December 2014. However, this number is a decline relative to the number in October and November, when there were 149,683,259 and 149,787,120 subscribers, respectively.

Taking 2015 as a whole, July marked a clear turning point. Prior to July, each company saw increases in the number of subscribers every month. However, after this date, only Airtel experienced a consistent increase in the number of subscribers, and MTN and Etisalat ended the year with less subscribers than in April.

Consequently, in the fourth quarter a clear divide emerged between MTN and Etisalat on the one hand, and Airtel and Globacom on the other. The latter two companies saw increases in their number of subscribers throughout the quarter, whereas Etisalat saw decreases each month, and MTN saw decreases in November and December.

Consequently, at the end of the fourth quarter of 2015, the number of subscribers with MTN and Etisalat were 1.99% and 5.67% lower, respectively, compared to the end of the third quarter, whereas the number of subscribers with Globacom and Airtel was 5.41% and 3.64% higher, respectively.

The latter increases outweighed the reductions sustained by MTN and Etisalat, meaning the overall number of subscribers increased over the same period by 0.17%. As a result of these trends, Globacom and Airtel increased their share of the market to 22.19% and 21.70%, respectively, whilst Etisalat and MTN saw a decrease in their share to 14.91% and 41.20%, respectively.

In December 2015, at the end of the fourth quarter, there were 2,148,727 CDMA subscribers, an increase of 5.23% relative to September, although there were slightly more subscribers in November, when the number was 2,149,275. There was also a decrease in the number of CDMA subscribers over the year; in December 2015 there were 1.79% less subscribers than in December 2014.