February (THEWILL) – The strong regulation by the Nigerian Communications Commission (NCC) over the telecommunications (telecoms) industry has created the environment for expanded revenue opportunities by government, banks and operators, THEWILL can confirm.
The various windows of taxes, levies and service charges became imperative as the increasing reliance on mobile phones, internet services and other connectivity makes it imperative to ensure that the industry operates within regulatory frameworks that promote efficiency, competition and environmental sustainability.
Findings by THEWILL revealed that the Federation Accounts Allocation Committee (FAAC) rose by N4 trillion to N15.7 trillion or 34 percent in 2022 over the N11.7 trillion cumulatively shared by the three tiers of government in the previous year – 2021.
Components of the figure include the Value Added Tax (VAT) which rose to N3.3 trillion in 2022 against N2.4 trillion recorded in 2021 part of which was realised from the telecoms sector.
The Electronic Money Transfer Levy (EMTL) introduced by the Finance Act of 2022, boosted the revenue of the government significantly from mere N11.4 billion in 2021, to N394.7 billion in 2022, representing a 3,353 percent jump.
This service relies largely on the functional output of the telecoms operators who provide the enabling platform for the transactions to thrive.
The financial services institutions are huge beneficiaries of the revenue boost created by the various taxes, levies and service charges in consuming the services of the telecom operators.
Using the Tier-1 banks as benchmark, the four major financial service institutions, Zenith Bank Plc, Access Holdings Plc, United Bank for Africa (UBA) Plc and GT Corporation (GTCO) recorded enhanced revenue haul through the application of their various channels and e-business transactions, facilitated by the telecoms operators.
Data from their various audited annual reports showed that the four major financial services institutions pooled a combined revenue of N208 billion from their electronic service transactions in 2022, compared to N190 billion they achieved in 2021.
Similarly, the two major telecom providers, MTN Nigeria Communications Plc and Airtel Africa, both quoted on The Exchange, recorded significant revenue haul through the use of their connectivity as their profit after tax rose from N298.65 billion in 2021 to N358.8 billion in 2022 (for MTN), and $185 million in 2021 to $256 million in 2022 for Airtel.
The two telecoms giants also pooled enormous revenue during the review period with MTN recording N2 trillion in 2022 against N1.6 trillion in 2021 as Revenue, as Airtel pooled $553 million compared with $401 million in 2022 and 2021 respectively.
Industry experts say, the telecoms firms, as the enabler and central to the buoying digital economy, are the inevitable drivers of the rapidly expanding fintech ecosystem and the aggressive financial inclusion strategy.
“Beating the telecoms operators into the path of professionalism, efficiency and playing by the rules is one measure the NCC has pursued without reservation to put the telecoms industry in a position it should serve the purpose required of it,” said Mike Akhigbe, a telecoms specialist in a chat with THEWILL.
According to Akhigbe, the NCC leadership from the outset focused on the telecoms operators and ensured they did not misbehave or take undue advantage of Nigeria’s thirst for effective telecoms services and this has created an enabling environment for the citizens to enjoy the benefits of the telecoms industry.
The Commission is responsible for creating an enabling environment for competition among operators in the industry as well as ensuring the provision of qualitative and efficient telecommunications services throughout the country.
The mandate has led to the expansion of Nigeria’s digital economy with the inbuilt windows for revenue opportunities across the sectors through taxes, levies and charges as the telecoms act as enablers in expanding the digital economy.
To achieve its objective, the NCC often engages with stakeholders in the telecoms ecosystem with a view to pursuing proactive regulatory interventions targeted at ensuring an enabling operating environment and improving investment climate in the Nigerian telecoms industry. This also enhances revenue drive for the government and the corporate bodies.
A similar event, which took place recently in Lagos, was an assemblage of key industry stakeholders with the central objective to analyse the current state of the sector, process the issues, and chart new pathways to a more effective and sustainable regulatory regime for the stability and growth of the Nigerian telecoms industry.
The NCC Executive Vice Chairman/CEO, Dr. Aminu Maida, used the opportunity to unveil key drivers for the telecoms industry.
This was part of activities to mark his first 100 days in office following his appointment as the new boss of the nation’s telecoms regulatory body by President Bola Tinubu.
Maida, who unveiled the strategic blueprints at an interactive meeting with the media in Lagos, also stressed his commitment to driving a good total customer experience for telecoms consumers in the country.
According to him, all efforts will be deployed to ensure that the sector contributes more, especially in terms of Gross Domestic Product (GDP) to the economy, job creation and more revenue to the government, adding that he would need the support of the media to be able to achieve that.
He noted that one of the key things “we have to recognize is that within the digital economy space the NCC plays a very huge role, because the communications infrastructure especially in this digital age is the backbone of the digital economy and of course the backbone of any nation.
The utilisation of the telecoms sector as a platform for the economic and social development of Nigeria manifests in the tax revenue windows that the effective regulation of the sector by NCC guarantees.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.