Since the first case of the coronavirus disease was confirmed in Nigeria in February 2020, nationwide lockdowns and movement restrictions meant to control the virus have had negative effects on businesses across sectors and the broader economy.
But the telecoms industry bucked the trend as operators recorded a collective revenue of ₦2.88 trillion compared to ₦2.516 trillion made in 2019. This is according to the recently released 2020 Subscribers/Network Data Report by the Nigerian Communications Commission (NCC).
The report further disclosed that revenue generated by GSM operators increased by 12.33%, from the ₦2.02 trillion recorded in the previous year to ₦2.27 trillion.
Internet Service Providers (ISPs) generated ₦68.96 billion in revenues, up 28.31% from ₦53.75 billion in 2019.
Other telecom operators made ₦534.69 billion, compared to ₦437.49 billion in 2019 while fixed operators made ₦8.43 billion from ₦6.04 billion.
In addition to increased revenues, the industry was also able to keep operating costs stable. Operating expenses in 2020 stood at ₦1.783 trillion, less than a 1% increase from ₦1.782 trillion in 2019.
Covid-19, a blessing in disguise for telecoms
The global coronavirus crisis has proved to be a blessing for network operators. Government-imposed lockdown measures meant Nigerians had to stay indoors, giving them ample time to spend on social media.
Businesses too were forced to switch to alternative working models, essentially conducting the bulk of their operations through the internet.
Corporate meetings and events took place via virtual platforms such as Zoom, seminars became webinars, music concerts moved online, and schools to channels like WhatsApp.
Nigerians consumed high volumes of online content as streaming platforms like Netflix and social media comedians took centre stage in entertainment.
These Covid-triggered trends translated to increased patronage of network operators.
Between March and November 2020, data usage in Nigeria rose from 147,537.52 terabytes to 196,163.42 terabytes. Within the same period, the number of internet subscribers also increased by 13.77%, from 135.7 million to 154.4 million.
On a year-on-year basis, the total number of active internet subscriptions increased from 125.98 million as of December 2019 to 154.29 million by the end of December 2020, an increase of 22.5%. Meanwhile, broadband penetration increased further last year to reach a peak of 45.93%.
“The increase in data usage is directly linked to the outbreak of the Covid-19 pandemic, which disrupted normal activities, and most functions had to be held virtually including schools and corporate meetings,” the NCC report said.
The significant growth seen in the telecoms industry helped to lift the Nigerian economy out of recession in the fourth quarter of 2020, contributing 12.45% to the country’s Gross Domestic Product (GDP).
The NCC further revealed that mobile network operators (MNOs) received massive investments in the 4G rollout of services, which resulted in improved growth.
However, the report shows capital importation/foreign direct investment (FDI) into the industry fell by more than half (55.7%) in 2020, from $942.86 billion in 2019 to $417.48 billion.
Similarly, domestic investment/capital expenditure (CAPEX) dropped by 18.62%. The declines in FDI and CAPEX are attributed to the outbreak of the Covid-19 disease, which distorted global businesses and impacted economies.
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