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Nigeria's telcos spend N2.6tr on capex

Mobile network operators (MNOs) operating in Nigeria have spent N2.6 trillion cash on capital expenditure (apex) over the last three years, it was gathered at the weekend.

Capex are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology or equipment.

According to reports prepared by the Nigerian Communications Commission (NCC), local investments by the MNOs in the country in 2020 stood at N831,976,000,000 while the operators reported a total capex of N718,350,570,000 in 2022 as against the N1,124,117,000,000 invested in year 2021, indicating a decline of 36.1per cent within the period.

Stakeholders blame the decline on foreign exchange scarcity and falling value of the local currency (Naira) amid surging inflation.

The reports entitled: 2021 Subscriber/Network Data Annual Report and 2022 Subscriber/Network Data Annual Report prepared by the Policy Competition and Economic Analysis Department of the NCC also gave figures of the total number of staff reported by the MNOs including MTN, Glo, Airtel, and EMTS trading as 9mobile, Smile and Ntel.

“The total number of staff reported by the mobile operators (MTN, GLO, Airtel, EMTS, Smile and Ntel) as at December, 2021 was a total of 7,226 composed of (7,042 Nigerians and 184 expatriates). Further breakdown of this category reveals that 4,541 of the Nigerian Staff are Male while 2,501 are female. Similarly, 181 are male expatriates and three are female expatriates,” the report noted.

It added that as at December, last year, it was 7,451 composed of 7,270 Nigerians and 181 expatriates. Further breakdown of this category revealed that 4,735 of the indigenous staff are male while 2,535 are female. Similarly, 177 are male expatriates and four are female expatriates.

Last year’s report showed an increase in revenue of 18.7 per cent to N3.8 trillion which was about N600 billion increase over the N3.2 trillion recorded in the previous year.

According to the report, the total revenue of telecom companies for the year stood at N3.8 trillion.

It asserted the dominance of MNOs including MTN, Globacom, Airtel and 9mobile in the industry as they accounted for 86 per cent of the industry’s revenue.

The revenue of the four mobile operators for the year stood at N3.3 trillion while other players including Internet Service Providers (ISPs), Value Added Service (VAS) providers, and fixed wired operators, recorded about N500 billion total revenue. 

On the other hand, the operating cost for the companies increased by 17.6 per cent in the year.

According to the report, the operators spent N2 trillion on their operations in 2022 compared with N1.7 trillion they spent in 2021.

NCC further disclosed that the number of active subscriptions across the telecom networks increased from 195.4 million in 2021 to 222.5 million as of December 2022.

This showed that the operators added 27.1 million subscriptions in the year, representing a 13.86 percent increase in active subscriptions year on year. 

“The increase in the operators’ subscriber base was attributed to a number of reasons which includes subscriber loyalty, promos, seasonal effects, aggressive consumer acquisition drive, and competitive product offerings across all the networks.

“The increase in active subscription impacted positively on other derived telecom indicators such as Teledensity, internet penetration as well as broadband penetration,” NCC stated in the report.

The report further revealed that telecoms subscribers consumed a total of 518,381.89 terabytes of data last year showing an increase of 47 per cent when compared with the 353,118.89 terabytes consumed the previous year. 

According to the report, the number of Internet subscriptions across the networks also increased from 141.9 million as of December 2021 to 154.8 million as of December 2022 representing an increase of 9.06 percent.

Aside from the increase in subscriptions, which pushed up data consumption, the launch of 5G in the year by MTN also contributed to the jump.

With the expansion of 4G network, which delivers faster speed compared with 4G, Nigerians have been spending more on data as they are able to stream high-quality videos online.

The consumption is expected to increase further as the operators gradually roll out 5G, which delivers 100 times the speed of 4G.