Nigerians consume at least 40 million terabytes of data monthly and this is according to the Executive Vice-Chairman, Prof. Umar Danbatta of the Nigerian Communications Commission (NCC). He made the disclosure when the Chairperson of Liberia Telecommunications Authority (LTA), Madam Angelique Weeks visited him in his office recently.
As staggering as the figure looks, it simply means more Nigerians now prefer data to voice services which is not just a trend in Nigeria and here’s a figure to support this. As at April 2016, Facebook owned services WhatsApp and Messenger both processed 60 billion messages per day compared t0 the 20 billion SMS done by telecom companies in the same period and that’s just Facebook. The number grows when you factor other services like Telegram and WeChat in.
That said, what this also shows is a nation that’s eveolving in technology with more citizens embracing the internet at this crucial time in history and that’s a good thing. This just goes to support the popular belief that if the service is good and available, people will pay for it but mobile data prices in Nigeria have been on the decline with each day bringing a new data plan promo with it.
This is what has made services like Netflix and iRoko to continue to thrive. In fact, Netflix shares have enjoyed a boost this year due to subscriber growth probably due to content and the fact that more people in the world now have access to internet.
But as data services by the telecom companies continue to receive a boost, they have gradually robbed voice of revenue. Major network operators recorded a subscriber decline of about 3.8 million this year and if you multiply this by the Average Revenue Per User (ARPU) of N1,830, it would seem that they lost about 7 billion monthly. In 2016, Nigerian spent an average of 280b Naira monthly on voice related services but as internet services become more affordable, it’s just normal that users now prefer to connect with people using Over The Top (OTT) services like Skype, WhatsApp and other instant messaging services which have all incorporated voice into their applications.
But as the recession bit harder, telecom companies also tried to adjust their prices to encourage users to buy more data plans to make up for the loss in voice revenue. But the government had a separate idea at the time and that was to regulate OTT services in Nigeria. The backlash from the public probably made them reconsider even though it has not been ruled out completely.
Telecom companies must come up with a way to generate more revenue from data services to make up for the decline in voice revenue. Data is the future and as economic conditions improve (especially now that Nigeria is statically out of recession), they can expect that revenue generation is only bound to recover too.
The other thing Prof. Danbatta mentioned while receiving his Liberian counterpart is that the telecommunications sector in Nigeria contributed 1.54tr Naira to the country’s Gross Domestic Product (GDP) in the second quarter of 2017 and put in other words, the telecom sector’s contribution in the second quarter of this year stood at 9.5 percent. He said “Even in the recent times when the whole economy was facing challenges, the sector has remained resilient and stable.”
This could mean that the telecom sector may have played a huge role in Nigeria coming out of recession.