April 29, (THEWILL)- The effective regulation off the telecommunication (telecom) sector by the Nigerian Communications Commission (NCC) has strengthened the operators towards effective e-services that boost government and financial services revenue through taxes and levies.
A look at the performance of Nigeria’s major banks and the Federation Accounts Allocation Committeer (FAAC) last year revealed that both sides raked huge revenues through e-service windows facilitated by the telecom operators amid challenging/ environment.
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 Electronic Money Transfer Levy (EMTL) component of FAAC introduced by the Finance Act of 2022, increased significantly from mere N11.4 billion in 2021, to N391.28 billion.
The financial services institutions are huge beneficiaries of the revenue boost created by the various taxes, levies and service charges in consuming the e-services offered by the telecom operators as value chain enablers.
Using the five major banks as benchmark, Zenith Bank Plc, Access Holdings Plc, United Bank for Africa (UBA) Plc, GT Corporation (GTCO) and FBN Holdings recorded combined electronic banking income of N371.39 billion against N291.34 billion achieved in 2022, representing a 27.4 percent increase.
The biggest beneficiary is UBA which raked in N157.12 billion in 2023 against N93.15 billion in 2022, showing a 68.6 percent rise. Access Corporation achieved N101.61 billion compared to N59.65 billion in the previous year, representing a jump of 70.3 percent.
FBN Holdings recorded e-channel income of N66.04 billion against N55.09 in 2022, while Zenith Bank achieved N51.81 billion compared to N45.73 billion in 2022 – representing 19.8 percent and 11.7 percent respectively.
The least is GTCO which grew its e-banking income bv 8.16 percent from N37.73 billion in 2022 to N40.82 billion in 2023.
Electronic banking income represents income taken on transactions processed via electronic channels such as ATM, PoS, mobile banking as well as credit and debit card transactions.
“These transactions rely on the effective performance of the telecom companies as service enablers and conveyors of information between the banks and their clients without which no results can be achieved,” said Engr. Michael Muonye, a telecom service expert.
He added, “If the services of MTN, Airtel or any other service provider is down, the banks cannot do e-service transactions or use their various channels such as mobile banking. Telecom is a very vital sector and this explains why the NCC is strict in its regulation of the industry through policies and relevant oversights.”
Industry experts say, the telecom 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 telecom operators into the path of professionalism, efficiency and playing by the rules is one measure the NCC has pursued without reservation to put the telecom industry in the position it should serve the purpose required of it,” said Mike Akhigbe, a telecom specialist in a chat with THEWILL.
According to Akhigbe, the NCC leadership from the outset paid close attention to the telecom operators and ensured they did not misbehave or take undue advantage of Nigeria’s thirst for effective telecom services; and this has created an enabling environment for the citizens to enjoy the benefits of the telecom 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.
The NCC often engages with stakeholders in the telecom ecosystem with a view to pursuing proactive regulatory interventions targeted at ensuring an enabling operating environment and improving investment climate in the Nigerian telecom 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 telecom 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 telecom 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.
