The National Bureau of Statistics’ (NBS) data on capital imports, the telecom industry brought in $456.82 million in 2022 as opposed to $107.46 million in 2021 as 4G and 5G deployment increased foreign investments in the telecom industry by By 325.12%.
This is because despite the difficult economic climate in the nation, the industry has maintained its attraction to international investors. Despite a rise in foreign investment in the telecom sector in 2022, overall foreign investment in the nation decreased by 20.47 percent or $1.37 billion from $6.7 billion in 2021 to $5.33 billion in 2022.
Commenting on the sectors that attracted the most investments in the fourth quarter of 2022, the NBS said, “Disaggregated by sectors, capital importation into the production sector recorded the highest inflow of $392.54m, representing 37.01 per cent of total capital imported in Q4 2022.
“This was followed by capital imported into the banking sector, valued at $255.45m (24.08 per cent), and telecoms with $168.27m (15.86 per cent).”
As practically every sector is now more dependent on the nation’s communication infrastructure as a result of the COVID-19 network, the telecommunications industry has seen an increase in network roll-out to boost coverage.
According to the Nigerian Communications Commission, teledensity—the ratio of active telephone connections per 1,000 residents—rose from 97.45 percent in January 2020 to 119.01 percent in February 2023.
Throughout the period under review, broadband penetration increased from 38.49% to 48.49%, mobile Internet subscriptions increased from 128.37 million to 156.42 million, and mobile subscriptions increased from 185.74 million to 226.84 million.
MTN Nigeria and Airtel Africa disclosed that they invested N613.13bn in 4G expansion and 5G rollout in 2022.
The two telcos increased their network investments by 14.19 per cent year-on-year from the N536.91bn spent in 2021.
Commenting on its network rollout, MTN said, “Capital expenditure was N504.3bn, up 23.5 per cent, due to acceleration in coverage expansion, focusing on the 4G and 5G networks and our rural telephony programme.
“We deployed 9,027 4G sites, 588 5G sites and 778 rural sites. 4G accounted for approximately 76 per cent of the total sites deployed during the year.”
Airtel Africa’s Chief Executive officer, Segun Ogunsanya, also stated, “Over the last nine months we have spent almost $490m on 4G and 5G spectrum across key markets to improve network capacity and quality, future-proof the company for continued growth opportunities and facilitate economic progress in all our markets.”
With the continued shift to digital technologies and a digital economy, 5G — which was recently launched in Nigeria — is expected to dominate and further increase foreign investments in the sector.
GSMA, the global body for telcos, recently stated that the 5G rollout in 10 top cities in the country would cost telcos $500m as they will need to build 6,000 base stations.
