September 26, 2023/CSL Research

According to a report in the Punch newspaper, the Executive Chairman Nigerian Communications Commission, Prof. Umar Danbatta, noted that Nigeria’s Fifth Generation (5G) network subscriptions have hit half a million. According to him, the country is aiming to achieve 50 and 70% broadband penetration by the end of 2023 and 2025 respectively. He further stated that investments in the telecoms sector have increased tremendously from US$38bn in 2015 to US$75bn currently and this continues to grow. He also noted that from the sale of 5G C-Band Spectrum, the NCC has generated over US$847.8m for the Federal Government.

The telecoms sub sector has remained a bright spot in a gloomy economy and has continued to grow in recent times. The ICT sector recorded a real growth rate of 8.60% in Q2 2023 compared with 6.55% recorded in Q2 2022. The y/y growth was largely driven by activities in the telecommunications sub-sector, which contributed 9.70% to the growth of the sector in real terms. The growth in the telecommunications sub sector was attributed to the rising mobile subscriptions and broadband penetrations reported at 220.9 million and 47.01% in uly 2023. An increase in 5G subscriptions contributed significantly to the rising sector numbers.

According to a report by the Global System for Mobile Communications Association (GSMA), 5G is projected to contribute US$2.2 trillion to the global economy by 2034, and Nigeria’s adoption of the 5G network positions the country at the forefront of the expected technological revolution. In Nigeria specifically, the NCC estimates that the 5G network has the potential to generate an additional US$140 billion within the next decade. The telecommunications sub sector is expected to continue to grow significantly in the long run given the massive investments players have put into the sub sector. We note that the 5G network is expected to have a massive impact on the growth of the telecoms sub sector given its lower latency and more reliable connectivity.

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