Airtel's CEO predicts strong growth for Nigerian telecoms industry

Managing Director and Chief Executive Officer of Airtel Nigeria, Segun Ogunsanya, has said the Nigerian telecoms market offers multiple growth opportunities, stating that with 78% mobile penetration as at December 2014, there is massive untapped market potential just as he also opined that broadband adoption is set to rise as demand for more stable Internet grows from the residential and business segments.

Managing Director & Chief Executive Officer, Airtel Nigeria, Segun Ogunsanya presenting gifts to the Global CEO, TNS, Richard Ingleton and Renowned Economist and Keynote Speaker, BusinessDay CEO Forum, Prof. Paul Collier at Businessday CEO Forum in Ikoyi, Lagos.

Ogunsanya who was speaking Wednesday, April 29th at the Businessday CEO’s Forum held at the Wheatbaker in Ikoyi, Lagos, disclosed that 47 million subscriptions are expected between December 2014 and December, 2019, saying that this demonstrates massive untapped market potential and continued strong total telecoms revenue growth driven essentially by mobile data.

Providing insight on the theme, Nigerian Telecoms Industry: Five Years Ahead, he noted that strong growth is expected from mobile financial services over the forecasting period and operators should ensure they are able to offer products to the large unbanked population of Nigeria, whilst growing demand for mobile apps and e-commerce will have a positive knock-on effect on mobile operators.

According to the Airtel CEO, Nigeria offers exciting opportunities for telecoms investors as a large population with rising incomes positions the country as one of the most attractive destinations for investment on the African continent. 

Ogunsanya further opines that Nigeria has massive bandwidth capacity from the four undersea cables that has yet to be exploited and this will provide opportunities to domestic and international investors to take advantage of the growing broadband and data industry.

He, however, noted that key issues must be urgently resolved for the Nigerian telecoms industry to reach its full market potential.

He listed these issues to include spectrum availability and adequacy, Government commitment to the National Broadband Plan, tackling the monster of multiple-taxation, reliable and cost-effective power supply, protection of telecoms infrastructure from vandalism and resolving restrictions on telco activity in mobile money.

Speaking on spectrum availability, the Airtel CEO stated that due to explosive growth in mobile data traffic, operators require more spectrum to support this growth. Although he commended the NCC for making inroads towards spectrum availability and adequacy, he noted that there is an urgent need to expedite the release / award of frequency to operators as this will facilitate industry development.

Ogunsanya also decried the incident of multiple-taxation, disclosing that revenue loss from idle or shut down base stations represent the main source of negative impact of multiple taxation and network vandalism for the industry. 2% to 3% of Nigeria’s sites are affected by arbitrary shutdown and vandalism at any given point in time.

According to him, it is estimated that increased operating costs and lost revenue costs around N9bn each year to the telecoms industry or about N20bn if most of the arbitrary fees in some key states are upheld. He, therefore, called on the government to unify taxes under one code and also bring to book vandals who deliberately destroy telecoms infrastructure.

Commenting on the immediate implementation of the National Broadband Plan (NBP), the Airtel CEO said achieving the NBP will require possibly up to 50% more than the $3bn-$4bn Nigerian operators have been spending on CAPEX annually, an increment that would need to be justified by a material change in operating conditions that would improve investment confidence.

The Businessday CEO Forum attracted important personalities and dignitaries including Deputy Governor-Elect of Kaduna State, Bala Barnabas Bantex; Commissioner of Finance, Lagos State, Ayo Gbeleyi; Chairman, Nigerian Economic Summit Group, Folusho Philips; Global CEO, TNS, Richard Ingleton; Renowned Economist, Prof. Paul Collier; Director of Enterprise, Airtel Nigeria, Tawa Bolarin and Head of Public Relations, Airtel Nigeria, Femi Adeniran, among others.

The Businessday CEO Forum Nigeria is an annual thought leadership initiative started in 2009 by BusinessDay Newspaper in collaboration with McKinsey & Co. Yearly, it attracts over 120 leading CEOs of Nigeria’s companies for a whole day of dialogue around key challenges they face in a market like Nigeria.