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Nigeria’s Telecom Market: Two Decades of Trailblazing Advancement

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From the days people lined up in long queues to make calls at an available phone booth, to the days only few rich elites had landlines powered by wires hanging across the streets under the control of Nigerian Telecommunications Limited (NITEL), Nigeria’s telecommunication industry has grown remarkably in the last two decades.

The days of sending letters to loved ones and business associate through post offices are virtually gone, overtaken by SMS, email, video calls and social media chat. We also had a time in this country that running phone and internet café centres were one of the biggest business ideas for Small and Medium Enterprises (SMEs). However, today that has changed as many have their handsets and internet modems earning the country one of the leading African countries with internet and smartphone penetration.

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The industry began to experience a major turnaround when the government enacted the Nigerian Communications Commission (NCC) act to end the monopoly of NITEL, allowing new entrants into the telecommunications sector. This led to the entrance of players like MTN in 2001, Econet (now Airtel) in 2001, Glo in 2003 and Etisalat (now 9mobile) in 2007.

Also, the policy gave birth to Global System for Mobile (GSM) on August 8, 2001, leading to the entrance of some global mobile phone brands. From then, the industry’s marketing landscape has changed with healthy competition accelerating the growth of other industries.

Basically, telecom and smartphone brands deployed the four Ps of marketing- product, price, place and promotion to make the consumer journey seamless and memorable.

For some of the people interviewed, the memories of using feature phones like Nokia 3310 and Samsung C140 then including purchasing SIM cards at an exorbitant price which is now free will forever linger.

Investment Flow

According to NCC via its 2020 subscriber/network data report, Nigeria’s telecom industry in 2019 attracted investment worth over $942.86 million. However, in 2020, it recorded a decline of 55.7 percent as the industry only attracted investment worth about $417.48 million for the period under review.

The report indicates, “Capital Inflow (Foreign Direct Investment) into the Nigerian telecoms industry in 2020 was approximately $417,481,615.30. This is against $942, 863,833.96 as at 2019.”

As of June 2020, MTN was Nigeria’s largest mobile telecoms operator, with 38 percent of the market share. Globacom and Airtel followed directly, holding 27 percent and 26 percent of the share, respectively.

Broadband penetration however stood at 40.66% as of April 2021 when compared with the target of 70% by 2025.

Euromonitor International reports that Mobile phones remained the top performer in consumer electronics during 2021 in terms of its rate of retail current value sales growth. Mobile phones are perceived as necessity by a growing number of local consumers, even among those on relatively low incomes, stimulating growth in retail volume sales.

Similarly, Nigeria’s smartphone market grew 2.0% in unit terms quarter on quarter (QoQ) in Q2 2021, according to the latest figures from global technology and consulting services firm International Data Corporation (IDC). However, the firm’s Quarterly Global Mobile Phone Tracker also shows that feature phone shipments into the country declined 6.4% over the same period. Feature phones accounted for 51.8% of the market’s overall shipments in Q2 2021, with smartphones responsible for the remaining 48.2% share.

Also, the smartphone market’s growth in Q2 2021 was spurred by vendors launching various new models, increasing their investments in marketing activities, and shifting their product portfolios towards entry-level and mid-range devices. Transsion’s Tecno, Itel, and Infinix brands dominated the country’s smartphone market in Q2 2021 with 76.9% unit share. Samsung placed second with 10.0% share, while Nokia and Xiaomi followed with respective shares of 3.7% and 2.9%.

Although, there are the emergence of made in Nigeria phone brands like ITF mobile and others gearing up for launch, the industry is basically a blue ocean filled with opportunities.

Marketing Campaigns and Brand Extensions

In the telecom industry, the competition has been intense, unlike the early days when campaigns were mainly around call but today data is the focus, knowing that data is now the new oil.

Most of the campaigns rolled out by the telecom brands are focused on getting fast, reliable and affordable data. MTN launched ‘Data Smart’, Airtel introduced ‘Data is Life’; Glo unveiled ‘Data is Oxygen’ and 9mobile launched ‘More Than Just Data’ campaign.

Prior to that the ‘everywhere you go’ slogan by MTN; Naija for life by Etisalat (Now 9mobile), and others resonated with alot of customers and may influenced their buying decisions.   

Recently, they took the competition further into the mobile TV space with the launch of MTN TV, Airtel TV and Glo TV. The smartphone app allows subscribers to stream live TV channels and watch the latest movies and series from their android or iOS device.

The brands have also made it easy for customers to subscribe to different data plans they can afford whether daily, weekly or monthly. As part of value added services, they also give free data and free access to visit some websites without data charges. Example of this was during the lockdown ocassioned by the spread of COVID-19.

The mobile money market also witnessed a remarkable growth, thanks to phone brands, telcos and banks. The bank leveraged them to make banking easy and seamless, whether with data or not, transaction can be made with USSD codes. In a bid to ensure financial inclusion and reach the unbanked publics, a  brand like MTN has also ventured into the mobile money space with Momo.

In a nut she’ll, the market forces of demand and supply is playing greatly in the telecom and mobile phone  market with a growing population of youth who are excited to always use new brands and innovative product, the Nigerian market is indeed a big market for all to thrive.

The Growing Market And Contributions

Affordable internet services, mobile tracking services, cheaper international calls, internet banking, mobile banking and others are possible thanks to the contribution of the telecom sector.

The sector globally helped the world to stay connected in the mid of the spread of COVID-19 Pandemic and the lockdown that followed it. It is even playing a major role in the post COVID-19 recovery era and it is one of the key sectors boosting the Gross Domestic Product (GDP) of Nigeria.

It also helped accelerate social media growth as well freedom of speech. However, some analysts attribute its emergence to the spread of fake news but currently stakeholders are putting measures to reduce the trend while urging individuals to verify the source of their news before sharing.

Nigerians are more prominent on social media like Facebook, Instagram, twitter and others with millions of them visiting these sites every day. The platform has also empowered a lot of vibrant young and old people who are content providers or influencers all because they have a smartphone and data.

Also, it has also given rise to overnight star and equally makes a word or topic trend for national attention which most time has forced government to rethink their policies or a public figure to tender an apology for an outburst.

Nigeria is now of the social media users across the world and twit from the country often go viral and soon become a global hashtag. The importance role Nigeria play in the global tech space  has led the likes of Mark Zuckerberg, founder of Facebook and many other prominent players in tech to visit or set up offices in the country.

Also, the growth of the ecommerce business in the country estimated to be worth over $13 billion according to a report by London based Economist Intelligence Unit (EIU) rest on the growth of telecom space.

Interestingly, the ecommerce businesses have had tremendous impacts on retail businesses in the country and has influenced the nation’s economic growth.

The reason for the grow according to Abbakin is “Out of the 180 million Nigerians, 62 percent are youths-which represent a potential audience as they are highly connected on the internet via the usage of mobile phones. Thanks to the Nigerian mobile operators and advancement in global technology.

Today, technology hubs and broadband companies are springing up and markets like Computer Village are also been built across the country. The future looks bright for the industry and indeed Nigeria, Africa and the world. Here is a toast to another decade of unending connectivity.

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