The GSM operators in Nigeria are currently facing continuous decline in their income from voice communication amid fierce competition. Phenomenal growth in voice communication has been the cash cow for telecommunications operators in the last 10 years of the introduction of GSM into the country.
 The declining fortune, among other factors, is occasioned by the recent entrance into Nigeria of Airtel of India and its subsequent crashing of tariff as part of strategies to shore up its subscription base and penetrate the rural areas of the country. Since this development, other operators have responded by reducing their tariff by between 30 and 60 per cent.
At its introduction in Nigeria, GSM tariff was between N50 and N60 per minute. It has since gone down to between 20 kobo and 50 kobo per second or between N12 and N15 per minute. The general decline in operators’ bottom-line is already threatening the existence of Code Division Multiple Access (CDMA) operators with Multilinks Telkom’s announcement to withdraw its operations from the country because it could no longer cope with the attendant competition.
And as part of strategies to reduce the effect on their bottom-line, operators are now looking to value-added services (VAS) to shore up their income, spurring rapid innovation in mobile services. This, according to Mr. Niyi Yusuf, managing director of Accenture Nigeria, will lead to increase in divestiture and potential mergers and acquisition deals between GSM operators, CDMA and internet service providers to improve competitive positioning in the industry.
Yusuf also noted that increasingly investment in broadband internet will characterise the market to achieve optimum voice and data service combination needed to sustain operators’ average revenue per user. Engineer Titi Omo-Ettu, president of the Association of Telecommunication Operators of Nigeria (Atcon), noted that it is the few high-level subscribers in the country that give the traffic that counts for commerce and not large low-level subscribers adding that high level subscribers may be moving away from voice to data which, in effect, would ultimately lead to a downward trend in their income.
From an engineering perspective, the latter does not occupy much traffic space like voice. “If however it is true, then operators will learn to redistribute traffic by adjusting tariff to motivate such desired situation and that may be what some are actually doing without our knowing.”
Investigations reveal that the increasing uptake of smart phones is an added advantage to the operators as Nigeria’s data usage is now one of the highest in Africa. Available statistics show that data usage grew by 331 per cent last year, the highest of any region with Nigeria, South Africa, Egypt, Kenya and Ghana making the top five countries in terms of page views. In fact, Nigeria made it to the top 10 globally, ahead of the United States and Brazil. Nigeria is additionally seeing a big leap in mobile applications that enable subscribers to access information, transact and get services.