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Telcos Spend N2.85 Trillion to Rake in N3.25 Trillion Revenue

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ANALYST INSIGHT: Telecoms Tax, Saviour or Villain?

Telecommunications companies in Nigeria committed N2.85 trillion to their operations in 2021 to rake in N3.25 trillion as revenue at the end of the year.

This is contained in the latest industry data obtained by Business Metrics from the telecoms industry regulator, the Nigerian Communications Commission (NCC).

According to the commission, while operators pumped the sum of N1.126 trillion into capital projects as capital expenditure (CAPEX), their operating expenses (OPEX) gulped N1.721 trillion.

The data showed that both the spending and revenue was dominated by GSM operators including MTN, Globacom, Airtel, Smile Communications and Ntel as they collectively spent N1.124 trillion and N1.658 trillion as CAPEX and OPEX to realise N2.774 trillion revenue at the end of 2021.

Players in the fixed wired services sub-sector of the industry recorded the second highest revenue of N375.038 billion in the year under review, following CAPEX and OPEX spending of N60.919 million and N534.159 million.

This is followed by Internet Service Providers (ISPs) in the sector. On the aggregate, they committed N3.606 billion and N48.426 billion as CAPEX and OPEX respectively to generate N59.993 billion.

According to the 77-page document by the regulator, Value Added Service (VAS) providers in the sector raked a whooping N32.919 billion after spending N335.871 million and N10.123 billion as capital and operating expenditure respectively.

The report which also captured collocation sharing infrastructure sharing indicates that operators in the sector recorded N266.263 million CAPEX and N2.329 billion OPEX while it generated N3.072 billion in 2021.

Meanwhile other telecoms operators in the country apart from the aforementioned sub-sector posted N2.445 billion revenue, with their aggregate CAPEX and OPEX reading N171.472 million and N899.868 million respectively.

The NCC report, 2021 Subscriber/Network Data Annual Report, captures the situation of every aspect of the telecoms industry as at December 2021.

What Commission is Saying

In the executive summary of the report, the commission stated that the provision of up to date industry statistics is a responsibility imposed by the Nigerian Commissions Commission through the provisions of the Nigerian Communications Act 2003.

The Act empowers the commission to amongst other functions:

  • Facilitate private investment and entry into the Nigerian telecoms Market for the provision of telecoms services as well as supply of equipment and facilities
  • Licensing companies to provide communications services
  • Create much needed conducive environment for investors in the telecoms environment
  • Ensure fair competition amongst players in the industry
  • Ensure subscribers are protected from unfair practices by telecommunications provider

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