Nigeria Emerges Second Fastest-Growing Telecoms Market Despite Challenges
- Nigeria has been pronounced the second fastest-growing telecoms market in the world
- The PwC outlook report places Nigeria in the top 3, with a projected annual growth that is higher than the CAGR
- The report also makes a list of what operators need to do in preparation for 6G adoption
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
Despite the challenges facing the telecommunications sector, Nigeria has emerged as one of the fastest-growing telecom markets, according to the PwC Global Telecoms Outlook report.
The same report predicts a 9.2% annual growth for Nigeria up till 2028, second only to India, which has a 17.2% projected annual growth rate, and ahead of Malaysia’s 9% annual growth.
This projection is also higher than the projected 2.9% Compound Annual Growth Rate (CAGR) for the period, showing that the Nigerian telecoms market still has strong demand for connectivity and broadband infrastructure.
Source: Getty Images
The PwC outlook report also shows that the global telecommunications industry grew by 4.3% to reach $1.1 trillion in 2023.
This growth is contradicted by a decline in the Average Revenue Per User (ARPU), occasioned by other industry challenges like rising costs and competition.
5G to become dominant by 2026
Revenues from 5G subscriptions are still low at 1.79 billion, but the PwC outlook report expects 5G to become dominant by 2026 and the subscriptions to soar to about 7.51 billion by 2028, LEADERSHIP reports.
Fixed-Wireless Access (FWA) is expected to be the fastest-growing broadband technology through 2028, with a compound annual growth rate (CAGR) of 18.3 percent. This rapid growth is set to drive the expansion of internet access, particularly in emerging markets.
Amid this shift, the momentum of capital is increasingly moving toward fixed connectivity, particularly fibre, according to the Outlook findings.
In 2023, total telecom capital expenditure (CapEx) saw a 2.3 percent decline, largely due to a 5.7 percent drop in mobile spending.
However, industry CapEx is projected to grow at a 2.4 percent compound annual growth rate (CAGR) starting in 2024.
This growth will be initially driven by investments in fixed broadband and fibre rollouts, followed by a revival in mobile capex as operators begin preparing for 6G.
Source: Getty Images
Speaking on the report, Mr. Femi Osinubi, the WMA consulting and risk services leader at PwC Nigeria, called on telecom players in Nigeria to accelerate investments to quicken the development of the industry.
He noted that several sectors of the economy are dependent on the telecoms sector and urged the sector players to deliver the “AI grid”, which will become the next version of the internet.
Experts had observed that the recent tariff hike was critical to the survival of the telecoms industry in Nigeria.
Even the NLC's plan to protest was described as being against public interest since telecom tariffs in Nigeria are among the highest globally.
NCC says telcos refused to buy 5G
In related news, the Nigeria Communications Commission has said the telecom players refused to purchase its 5G license.
Other than the two biggest players, MTN and Airtel, the others did not appear to have plans to buy into the 5G infrastructure soon, and this was why the NCC failed to meet its 2024 revenue target.
The NCC CEO also gave insights into the plans to introduce a 6G spectrum license soon and noted that it will boost revenue.
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Source: Legit.ng
