The telecommunications sector contributed N 1.4 trillion to GDP in the third quarter of 2016, or 8.0%, which represents a decrease of 1.8% points relative to the previous quarter, according to the latest report from the National Bureau of Statistics (NBS). However, due to differing seasonal patterns, telecommunications tends to account for the lowest share of GDP in the third quarter. The share of telecommunications in total real GDP had declined throughout 2010 to 2014, but for the last six quarters growth in telecommunications has been higher, meaning the trend has reversed.

Although growth in the telecommunications sector remained positive, in contrast with the economy as a whole, year on year growth nevertheless dropped in real terms from 1.5% in the previous quarter to 0.9%, the lowest rate since 2011 Q3.

The total number of subscribers has increased rapidly over the past decade; at the end of 2005 there were 19,519,154 subscribers, but by the end of 2015 there were 151,017,244, which is equivalent to an increase of 13,149,809 every year. However, growth has been declining more recently, possibly as a result of high market penetration leaving less room for large expansion.

In September 2016 – the end of the third quarter – there were 153,271,581 subscribers, compared with 149,803,714 in June 2015, which represents a quarterly increase of 2.31%. The number of subscribers had therefore surpassed its previous peak of 152,123,172, attained in November 2015. The yearly increase in total subscriber numbers was 1.73%; this was an increase compared to the yearly growth rate of 0.69% at the end of the previous quarter. This ends a decline in the year on year growth rate that had been witnessed over the past year. From the end of the second quarter of 2015, until the same period in 2016, the year on year growth rate had declined consistently, from 12.05% to 0.69%.

As in the previous quarter, the increase in subscriber numbers was despite a quarterly fall in CDMA subscribers of 39.15%, which compounded previous quarterly falls leading to year on year fall of 86.47%; a larger decline than in the previous quarter. The number of fixed wireless subscribers also recorded a large decline, of 31.87% compared to the previous quarter and 53.68% year on year. However, by far the most popular technology type is GSM, and therefore this technology type has a much larger effect on movements in the total number of subscribers.

Subscribers by Technology Type

Subscriber data is broken into four sections according to the technology type used. The first two are for mobile technology; Global System for Mobile Communications (GSM) and Core Division Multiple Access (CDMA), whilst the latter two are fixed lines, either wireless or wired. Mobile subscribers using GSM dominate, and accounted for 99.72% of the total in September 2016, followed by CDMA with 0.18% of the total, whist fixed wired and wireless make up 0.08% and 0.02% respectively. The dominance of GSM users has increased since September 2015 when 98.52% of subscribers used this technology type; largely as a result of the continuing decline of CDMA users. The number of subscribers using fixed wireless lines has also decreased sharply, although this was from a low level and therefore only had a small effect on the total. The proportion of fixed wired lines remained relatively stable.

The dominance of GSM over CDMA in the mobile technology is characteristic worldwide; GSM accounted for over 80% of the global market in 2009 Q2 according to industry estimates1. With GSM technology, it is cited as being easier to switch networks, and it is regarded as being more accessible for international use, especially given that some markets (such as in Europe) have mandated the technology by law. However, CDMA is more prevalent in the United States.

Mobile Subscribers (GSM)

In September 2016, the total number of GSM subscribers was 152,836,997, an increase of 4,409,954, or 2.97% relative to September 2016. This is 1.13% points higher than the year on year increase in the previous quarter, and therefore is in contrast to the downward trend in this growth rate witnessed over the previous year. The number of GSM subscribers has now increased in every month since April.

This was the first quarter since the previous year in which each GSM provider recorded positive quarter on quarter growth in subscriber numbers. MTN recorded the largest quarterly increase of 3.68%, to reach 60,558,569 subscribers compared to 59,409,767 in June. This was MTN’s highest quarterly growth rate since 2014, and the first quarter since 2014 in which MTN recorded the highest growth rate among GSM providers. Airtel recorded the second largest quarter on quarter growth rate of 2.49%, with 32,775,916 subscribers compared to 31,978,848 in June. Globacom and Etisalat had 36,967,712 and 22,544,800 subscribers respectively, and recorded growth rates of 1.78% and 0.29%.

This contrasts sharply with the year on year performance of each provider. The provider to record by far the highest growth rate, as well as the highest growth in absolute numbers, was Globacom. This provider recorded a year on year growth rate of 18.08%, and gained 5,661,240 subscribers over the period. The provider to record the second highest growth rate was Airtel, who recorded growth of 5.27% year on year. Airtel had followed a similar trend to Globacom until March 2016, after which Airtel’s subscriber numbers declined, and Globacom’s continued to grow. Notwithstanding the recent strong quarterly growth rate, MTN recorded a year on year decline of 3.10%, or 1,935,163. In absolute terms this fall was larger than the decline in the number of Etisalat subscribers of 1,641,291, although as Etisalat had a smaller number to be begin with, the year on year decline was larger in percentage terms, at 4.08%.

As a result of these trends, MTN regained slightly more market share relative to the previous quarter, with an increase in its share of subscriber numbers from 39.15% in June to 39.62% in September, although this is still below the share of 42.10% in September 2015. Airtel was the only other provider to increase its share relative to the previous quarter.