Weak consumer purchasing power, government policies drag telecoms sector in Q3

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Telecommunications sector’s contribution to Nigeria’s Gross Domestic Product (GDP) fell by 2.48 per cent in the third quarter of 2021. Weak consumer purchasing power, government policies drag telecoms sector in Q3…Sector’s contribution to GDP drops by 2.48% in Q3 2021

Telecommunications sector’s contribution to Nigeria’s Gross Domestic Product (GDP) fell by 2.48 per cent in the third quarter of 2021.

Statistics from the Nigerian Communications Commission (NCC) showed that the figure dropped from 14.42 per cent in Q2, 2021 to 11.94 per cent in Q3, 2021. Checks showed that within the same period in 2020, the contribution was 11.20 per cent

Industry analysts hinged the drop on several factors including the Federal Government NIN-SIM policy; Twitter ban, weak consumer purchasing power and the Average Revenue Per User (ARPU).

Precisely, the NIN-SIM mandatory exercise, which started in December 2020 and whose deadline has been shifted for about eight times now, with the newest now March 31, cuts over 15 million telephone lines from the network. This affected revenues of telecom operators and their contributions to the economy.

An analyst, who pleaded anonymity, said the slide in the sector’s GDP contribution within the quarter, reflected investors’ concerns on the state of affairs in the country, as well as the uncertainties surrounding policy issues in the sector.

According to him, there is a need for people-centred policies that would assure investors that the industry is safe and reliable.

He pointed out that already, there are challenges related to End User Certificates (EUC), multiple taxes, and illegal shutdown of towers housing these base transceiver stations, security and protection of facilities and a lack of power, “all these compound the problems in the sector.”

According to him, all telecom facilities must be treated as a Critical National Infrastructure (CNI) with immediate effect “before we can be serious about developing a Digital Economy in its true sense.”

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