Telecoms Sector Attracts $446.82 Million Foreign Investments in 2022

…As Sector Attracts 15.86% of Nigeria’s Total Foreign Investment

Compared to $107.46 million foreign investments attracted in 2021, the telecommunications sector has in 2022 recorded $456.82 million foreign investments, an increase of 325.12%.

According to the capital importation data from the National Bureau of Statistics, telecoms sector continued to retain its foreign investment appeal despite the country’s challenging economic environment.

Though telecoms sector recorded an increase in foreign investments in 2022, the total foreign investments into the country fell by 20.47 per cent or $1.37bn from $6.7bn in 2021 to $5.33bn 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).”

Since the COVID-19 network further increased the reliance of almost every sector on the country’s communication backbone, the telecoms sector has recorded increased network roll-out to expand coverage.

Teledensity, the number of active telephone connections per 1,000 inhabitants living within an area, has grown from 97.45 per cent as of January 2020 to 119.01 per cent as of February 2023, according to the Nigerian Communications Commission.

Broadband penetration has grown from 38.49 per cent to 48.49 per cent, mobile Internet subscriptions from 128.37 million to 156.42 million, and mobile subscriptions from 185.74 million to 226.84 million within the time under review.

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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.

Read Also: Telecoms Sector Contributes N4.84 Trillion to Nigeria’s GDP – NBS

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.