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GSM and internet penetration in Nigeria

By Mimi Ucheagwu
26 June 2015   |   2:33 am
THE internet has revolutionised the computer and communication world like never before. The fusion of the telephone, telegraph, radio and computers undoubtedly set the stage for an unprecedented integration of capabilities known as the internet.

Mobile phone bills

World Wide Web (internet)

World Wide Web (internet)










THE internet has revolutionised the computer and communication world like never before. The fusion of the telephone, telegraph, radio and computers undoubtedly set the stage for an unprecedented integration of capabilities known as the internet.

Tagged the information super-highway, the internet warehouses extensive information on any known topic or subject, aggregating the phrase, ‘the world is a global village.’ News and information are now available at the click of a button.

The internet itself has been transformed. In its early days, it was a static network designed to shuttle a small freight of bytes or a short message between two terminals. Today, immense quantities of information are uploaded and downloaded over this electronic leviathan. In Nigeria, people have wondered how we coped when the telecommunications industry was almost non-existent, save for a few NITEL lines owned by Nigeria’s elite and multinational corporations. Sending an urgent email also meant a visit to a commercial cybercafe with all its inherent security issues. There was also the waste of valuable time. Internet was at best crawling at 50kbps, with constant loss of signals. Service providers operated via satellite, which were often at the mercy of weather conditions.

Today, accessing the internet and other communication services has become enjoyable and seamless. The exponential growth of the telecommunications sector, which began in 2001, did not only change the way people communicate, it also changed the way people live, work and play. The sector opened up more business opportunities for individuals and organisations and facilitated the growth of an ecosystem of entrepreneurs, creating employment opportunities for thousands of Nigerians.

According to the Nigerian Communications Commission (NCC), active internet subscription (GSM) between 2014 and February 2015 is over 80 million, from an active subscriber statistics of over 145 million. Simply put, internet penetration deepened with the advent of GSM; and the implication of this is enormous, positively impacting the socio-economic fabric of the country.

Global System for Mobile Communications (GSM) is the world’s most popular wireless phone technology used by over one billion people around the world. At a stage, it accounted for four-fifth of the country’s Gross Domestic Product (GDP). Between 1985 and 2004, the unemployment rate had declined by 64 per cent, the bulk of which was in the rural areas. Fourteen years on, not only has the socio-economic landscape changed, expertise is now being exported; Nigerians are increasingly being regarded as expatriates in other countries. This is in clear contrast to when the country was dependent solely on oil for over 40 years and which impact on the socio-economic life of the people was limited. In sharp contrast, it took the telecommunications industry less than a decade to significantly transform the lives of Nigerians as well as the economy.

In 2014, the rebasing of the economy, which moved the GDP from USD270 billion to USD510 billion was attributed to new sectors such as telecommunications, entertainment and retail, among others which were previously not captured or under-reported. This rebasing placed Nigeria’s economy on top in Africa and by implication, opened up investment opportunities for foreign investors. The telecoms industry currently contributes nine per cent to the GDP, closely following the oil and gas industry, which has been in operation for over 50 years and contributing 10.76 per cent.

The proliferation of cheap smartphones has put technology in the hands of many more people. One critical service that small and medium scale enterprises (SMEs) have been using in the management of their businesses is the cloud service, which is hosted on the internet cloud. With this service, SMEs are able to acquire the necessary clout to manage their businesses efficiently and profitably.

In the music and entertainment industry, artists are getting their money’s worth on songs because music lovers can easily download latest songs onto their mobile phones and pay a token for them. Although the activities of pirates have had damaging effects on the careers of budding musicians and the bottom line of established artists, the ease of payment per download has been structured in such a way that one can pay via the mobile money platform or even with airtime. Today, artists make millions from downloads of their songs and get paid for endorsements and sponsorships so much so that many of them currently prefer to release their works online and recoup their money before they are released into the open market.

Although voice is still king, data has become the crown prince. More people now have access to mobile devices with which they browse the internet and get active on various social media sites, especially Facebook, Flickr, YouTube, Twitter, Instagram, WeChat, Badoo and so much more. This has caused telecommunications companies (telcos) to become increasingly focused on data services as a business strategy in line with the current trend in the market. Demand on bandwidth has prompted rapid adoption of non-traditional overlay services for communication which has forced telcos to be innovative in order to remain competitive.

With regard to the market business community, it is on record that ICT companies in Computer Village, Ikeja, Lagos on the average, generate over US$2 billion annually. As the telecommunications industry thrived, it injected vibrancy into the Computer Village and other similar locations across the country. Reality and talent-hunt shows have been given a boost, and have become platforms upon which young people showcase their talents and change their fortunes forever.

Applications (apps), on the other hand, have become the new rave in the way mobile devices are used and telecoms are engendering its penetration and acceptance. According to Apple, 46 million apps are downloaded from its App Store everyday by its customers. The apps industry is currently worth over US$2 billion. In a symbiotic relationship, telcos provide the platform for developers to showcase their talents and get value for their work in return, thereby opening up new revenue streams for themselves.

Apps have enhanced the way people derive value from their mobile devices and enabled service providers like e-commerce companies, bloggers, entertainment and eNewspapers, epayment platforms, among others, get their services to end users. Developers are also given the opportunity to update their apps and get free exposure via advertising.

Without a doubt, GSM is the harbinger of the giant leap the Nigerian economy has witnessed in the past 14 years, and we will continue to see the rise of SMEs and other cottage industries.

Though quality of service and infrastructure expansion remain a challenge, the gains of telecoms and the value it has added to the lives of Nigerians and Nigeria far outweighs the pains.

•Ucheagwu works with XLR8, a communication consultancy based in Lagos.