Global trends changing telecom sector operations

…As NCC signs PwC to study level of industry competition

By Prince Osuagwu, Hi-Tech Editor

In Nigeria and the entire West Africa, the subscriber base continues to grow, yet most operators are experiencing declining average revenue per user (ARPU).

NIGERIA- HIGH SUB BASE, LOW ARPU

Nigerian telecom operators have subscriber bases of over 200 million but Average Revenue per User (ARPU) hovered around $2-$3 monthly in 2024. That was a far cry to the $35-$48 average global ARPU reported by major telcos in USA and $23.6 reported by others in other markets as at the same period.

DATA USAGE DRIVES GROWTH

While data usage drives growth despite low overall spending, creating a contrast between high subscriber numbers and low per-user earnings, other economic factors like naira devaluation and price sensitivity slowed earnings.

CONSUMER BEHAVIOUR

Meanwhile, experts say that another significant trend is the changing consumer behaviour; they are digital-first and no longer simply purchase connectivity, they seek experiences powered by connectivity.
Consumers are not just about buying data, they also prefer self-service applications, replacing physical experiences with digital ones. Data is the enabler of these experiences.

SOCIAL MEDIA MAKES CONNECTIVITY KING

Similarly, the rapid growth of entertainment and social media positions connectivity as a social access point to the world.These trends are changing competition in the sector

NCC REACTS WITH COMPETITION STUDY

Accordingly, the Nigerian Communications Commission, NCC, has commissioned a study to determine the level of competition in the sector.
At a stakeholders’ forum, yesterday in Lagos, to x-ray the scope of the study, NCC said it had commissioned strategic consultants, PricewaterhouseCoopers (PwC) Nigeria to carry out the study.
The commission said the study is diagnostic and data-driven, aiming to: Assess market dynamics, structure, concentration, and operator behavior; identify significant market power and its impact on competition; enhance regulatory oversight and review existing frameworks; promote fair competition and provide evidence-based recommendations to foster innovation and service quality; as well as develop the capacity of the regulator to continuously assess competition and make informed decisions.

EVIDENCE-BASED MARKET ASSESSMENT

The scope of the study includes independent, evidence-based assessment of market structure, pricing, entry and expansion barriers, consumer behaviour, and service quality. Accurate, timely, and complete data submission from stakeholders is critical. Interviews, both virtual and in-person, will follow initial data collection to ensure comprehensive engagement.
The study seeks to answer key questions like what drives competition in the sector, how do competitive pressures affect pricing, product offerings, and switching patterns and are there barriers to entry, expansion, or consumer mobility?

SHIFTING REVENUE MODELS

Head, Competition and Tariff, Policy, Competition and Economic Analysis Department, Mrs. Omotayo Mohammed said: “The sector has evolved significantly, with shifting revenue models, new investment patterns, and emerging market interactions; rapid technological changes, evolving consumer expectations, rising investment costs, and competitive pressures make continuous validation of competition policy essential.
“Competition drives innovation, affordability, and consumer choice, but it must be fair, effective, and sustainable. The last industry-wide competition study was in 2013.
“Recent targeted studies 2018, 2022 focused on specific services, but new developments necessitate a holistic reassessment.

PWC ENGAGED

“PwC has been engaged to conduct an independent, data-driven study of competition in the sector. This study is not about naming winners or losers but understanding market dynamics across infrastructure, services, pricing, and emerging segments, identifying structural or behavioural concerns.
“The Commission remains committed to creating a level playing field for all players, ensuring efficient, high-quality services for consumers,” she added.

SECTOR CHALLENGES ARE GLOBAL

However, Director, Strategy, PwC Network, Akolawole Odunlami, has said that many challenges affecting the sector are not limited to Nigeria but global.
“Globally, telecommunications operators are rethinking their business models.

GLOBAL TRENDS

“Success is no longer defined solely by data offerings but by integrating lifestyle services into the data experience.
“Through platforms, users can now access health services, utilities, and even fintech solutions.
“Over-the-top, OTT services such as WhatsApp and Teams illustrate how traditional voice and messaging services are shifting, with data serving as the backbone.

OTT STIFFLES TRADITIONAL REVENUE MODELS

“Revenue is moving from traditional models to OTT services.
“Consumer communication is now experience-driven. For instance, I can call a team member anywhere in the world using Teams. Data enables the experience, not just the call.

LIFESTYLE SERVICES, NEW GAME CHANGER

Globally, some mobile network operators, MNOs have integrated lifestyle services into their apps, allowing users to pay for utilities, access medical services, and engage with fintech offerings. Today’s 21st-century consumer demands connectivity that powers these experiences.

5G – A POWERFUL TREND

“Another trend is the rollout of 5G and, eventually, 6G. By 2028, 5G is projected to account for 64% of global connectivity. However, adoption in Nigeria and sub-Saharan Africa remains constrained due to infrastructure limitations, low investment in R&D, and slow uptake of 5G-enabled devices. Short- to medium-term adoption in sub-Saharan Africa is projected at 14–17%, far below the global average.

WHY GOVT MUST INVEST IN INFRASTRUCTURE

“Government investment in infrastructure and R&D is crucial to accelerate this growth.
“Competition in the sector is also evolving. Beyond new entrants, innovative business models and connectivity options are reshaping the market.

AI DRIVES ECONOMIC GROWTH

Globally, for example, AI has driven significant economic growth, with the U.S. seeing 90% of first-half 2025 growth attributed to AI investments in hyperscale data centres.

BUT NIGERIA DRAGS FOOT IN AI INVESTMENT

Odunlami said that in Nigeria, while more data centres are emerging, investment in AI-capable infrastructure remains limited.
He advocates a conducive regulatory environment to support such advancements.

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