Nigeria’s telecommunications industry has experienced immense growth over the years, primarily due to the country’s vast population and increasing demand for telecommunications services.
The sector’s growth can be attributed to the liberalisation of the telecommunications industry, which took place in 2001.
The liberalisation policy aimed to create a competitive telecommunications market and improve the quality of services offered to consumers. As a result of the liberalisation policy, several telecommunications companies entered the market, increasing competition and leading to improved service delivery.
Telecommunications and mobile payment have become inseparable, creating a perfect partnership that has revolutionised the way people conduct financial transactions.
With the proliferation of mobile devices worldwide, mobile payment has emerged as a powerful tool that has transformed the way people shop, pay bills and manage their finances. The integration of telecommunications and mobile payment has led to the emergence of new business models, financial services, and opportunities for economic growth.
Telecommunications has always been a critical component of the modern economy, enabling businesses to communicate and access information across vast distances. The growth of mobile devices has expanded the reach of telecommunications even further, making it possible for people to stay connected regardless of their location.
Mobile devices have become ubiquitous, with billions of people around the world using smartphones, tablets, and other mobile devices to access information, communicate, and conduct financial transactions. This has created a massive market for mobile payment services.
Market Trends in the Nigerian Telecommunications Industry
The growth of the sector is influenced by significant market trends. Some of the notable market trends in the industry include:
Growing demand for data services
The demand for data services in Nigeria has increased significantly, driven by the growing use of smartphones and other mobile devices. This trend has led to a shift in focus for many telecommunications companies, with a greater emphasis on data services such as the internet and mobile data.
Expansion of 4G/LTE networks
The deployment of 4G/LTE networks has increased in Nigeria in recent years, providing faster internet speeds and better network coverage for customers. This trend has been driven by the increasing demand for data services and the need for better network performance.
Increased investment in network infrastructure
Many telecommunications companies in Nigeria have increased their investment in network infrastructure, including the deployment of new cell towers and the expansion of existing network infrastructure. This trend has been driven by the need to provide better network coverage and improve the quality of service for customers.
Growth in mobile money services
The use of mobile money services has increased greatly in Nigeria, driven by the need for convenient and secure payment options. Many telecommunications companies in Nigeria have launched mobile money services, providing customers with access to a range of financial services, including money transfers, bill payments, and mobile payments.
The Current State of Mobile Payments and Mobile Money in Nigeria
Mobile payments and mobile money have been in existence in Nigeria for over a decade, with the introduction of mobile money services by the CBN in 2011.
Mobile payments refer to the use of mobile devices such as smartphones and tablets to pay for goods and services, while Mobile money involves the transfer of funds using mobile devices.
Currently, there are over 50 million registered mobile money users in Nigeria, with over 200,000 agents across the country. The telecoms industry in Nigeria has also been instrumental in the growth of mobile payments and mobile money, with telecoms companies partnering with mobile money operators to provide their customers with easy access to mobile money services.
Factors that contribute to the growth of Mobile Payments and Mobile Money in Nigeria include:
Increase in Smartphone Penetration
There has been a significant increase in smartphone penetration in Nigeria in recent years, with over 123 million smartphones in circulation. This increase in smartphone penetration has made it easier for people to access mobile payments and mobile money services.
The Nigerian government has shown support for the growth of mobile payments and mobile money in the country. The government has introduced several policies and regulations to encourage the growth of the industry, including the licensing of payment service banks and the launch of the Shared Agent Network Expansion Facility (SANEF) by the CBN in 2019.
Mobile payments and mobile money operators in Nigeria are constantly coming up with innovative solutions to make mobile payments and mobile money services more accessible to Nigerians. For example, some mobile money operators have introduced chatbots that allow customers to access mobile money services through messaging apps like WhatsApp and Facebook Messenger.
Increased Financial Inclusion
Mobile payments and mobile money have played a significant role in increasing financial inclusion in Nigeria. According to a report by the CBN, mobile money has helped to bring financial services to the unbanked and underbanked population in Nigeria, with over 50% of mobile money users being previously unbanked.
Collaboration between Telecoms Companies and Mobile Money Operators
The collaboration between telecom companies and mobile money operators has been instrumental in the growth of mobile payments and mobile money in Nigeria. Telecom companies provide the infrastructure and the customer base, while mobile money operators provide the financial services.
The advent of telecommunication and mobile money payment has brought financial inclusion to millions of unbanked Nigerians, boosted small businesses, and enhanced communication and connectivity in the country.
As Nigeria continues to embrace the digital age, it is important to continue investing in and improving telecommunication and mobile money infrastructure to sustain the country’s economic growth and social development.