Nigeria poise to reap economic growth from mobile broadband

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With a fast growing mobile internet penetration, Nigeria is poised to record significant boost in Gross Domestic Product (GDP) growth, if service providers enhance their mobile broadband services delivery. This became clear with a recent Ericson report, which confirmed that every 10 per cent increase in mobile broadband penetration causes a 0.6 per cent to 2.8 per cent rise in GDP of a country.

Nigeria currently has over 91 million mobile subscriptions and leads Africa as the fastest mobile broadband growing country. Indeed, according to a recent study by Jumia on African mobile trends, about 71 per cent of its users in Nigeria access the website through their mobile phones, compared to 53 per cent of customers in the rest of Africa.

The latest Ericson report, which details the findings of a research conducted in collaboration with the Imperial College of London, revealed that when a country adopts mobile broadband, the result is solid overall economic development. The report, entitled ‘How Important Are Mobile Broadband Networks for Global Economic Development?‘, examines data from 135 countries.

It reveals that as mobile broadband penetration increases by 10 percent, it causes a 0.6-2.8 percent rise in Gross Domestic Product (GDP). That translates to an equivalent of approximately USD 500–2000 billion, worldwide in 2016.

Ericson noted that previous reports had examined fixed broadband, and researchers have only been able to estimate its effect on economic growth. “This study, on the other hand, has been able to conclude that the introduction of mobile broadband has an immediate positive effect on a country’s economy, and a longer-term knock-on effect as mobile broadband gradually spreads to different economies” it said.

HaraldEdquist, Master Researcher in Macroeconomics at Ericsson Research and one of the report authors, said: “Many countries in the developing world have used mobile broadband technology to leapfrog in their economic development in the past 10–15 years.

I believe that if these countries, and others, continue to invest wisely in mobile broadband, they will have an excellent opportunity to continue to reap the benefits of continuous productivity improvements and new economic opportunities that simply would not be possible without mobile broadband.”

According to Ericson, mobile broadband networks have spread rapidly, and are set to continue doing so. The Ericsson Mobility Report (June 2017), states that at the end of 2016, around 3.2 billion subscribers (out of the world’s total population of 7.4 billion) had access to the Internet via mobile broadband technology. It is forecast that an additional 2.6 billion subscribers will have mobile broadband Internet access by 2022.

A GSMA study shows that in Africa, limited network coverage remains a key barrier to mobile internet adoption. Presently, mobile broadband networks cover around 50 per cent of the population, meaning that 600 million people in the region do not have access to a mobile broadband service.

Ericson added that to ensure efficient mobile broadband adoption, stable and efficient policies and regulations are essential for mobile operators to have the best conditions to roll out mobile broadband networks in under served areas, noting also that private investment depends heavily on the regulatory climate.

Edquist noted: “We have always challenged traditional ways of thinking. Being true to our company purpose of innovating technology for good and creating new economic opportunities we make life better, whether through connecting people in new ways, building technologies for industries in transformation or creating a more inclusive society. This is set to continue as we enter an era of 5G, IoT and cloud network infrastructure.”

Nigeria in 2013 set a broadband target of 30 per cent penetration by 2018 and it recently put the penetration figure at 21 per cent, although some stakeholders believe the figure is over bloated. Some believe that large chunk of the penetration figure being claimed has being through mobile broadband as opposed to fixed broadband, which the International Telecommunications Union (ITU) measures. Other experts, however, believe that the country can still achieve the desired economic growth by leveraging on mobile broadband as most Nigerians use their mobiles for internet.