GSMA Predicts N862 Billion GDP Growth in Broadband

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GSMA, the umbrella body for mobile operators worldwide has challenged Nigerian government to support broadband rollout and penetration across the country, insisting that broadband capabilities could generate over N862 billion of GDP growth by 2015 if fully supported by government.

Addressing the press in Lagos last week through online web conference, Special Government Advisor for GSMA, Ross Bateson outlined the findings of a new independent study by analyst firm Analysys Mason and called on government to as a matter of urgency, unlock the 2.6 GHz spectrum to support the high demand for mobile broadband in urban areas; release the digital dividend spectrum to deliver broadband services to rural areas; and reduce the 35 per cent tax level faced by Nigerian mobile operators, a tax which he says double the global average.

According to the study, only 6 per cent of all Nigerians currently have access to broadband services, and 74 per cent of those do so through mobile broadband. There is little fixed broadband connectivity outside of Lagos, and even in Nigerian cities, most cyber cafés now connect to the internet using wireless services. The report of the study revealed that mass-market broadband availability will only be possible using mobile technologies, and it highlights the steps that government must take to promote mobile broadband growth.

According to Bateson, "It is essential that the Nigerian government acts quickly to support mobile broadband expansion, as failure to do so could hinder the country's social and economic growth. Not only could the country realise as much as N862 billion of incremental Gross Domestic Products (GDP), but people of all ages and livelihoods will benefit from the vast amount of information and opportunities mobile broadband can unlock."

The study found that mobile broadband could potentially contribute more than 1 per cent of GDP or 1.7 per cent of non-oil GDP in 2015 and would facilitate much needed diversification of the economy. According to the report, government support for mobile broadband services could help deliver significant advantages to the wider wireless ecosystem and the way in which other sectors use the internet.

Some of the benefits of mobile broadband as outlined by the report, shows that 55 per cent annual growth would be seen from the online retail industry, growing from N4.5 billion in 2010 to N44.9 billion in 2015; the financial services industry's benefit from broadband would grow by 95 per cent, as a result of mobile access to bank accounts and money transfer services, from N0.6 billion in 2010 to N16.8 billion in 2015; the use of the internet and mobile to deliver of social services, including healthcare and education, would generate growth of 70 per cent, from N2.2 billion to N30.3 billion in 2015; and the overall corporate market, especially agriculture and utilities, would experience a 55 per cent annual growth rate through the provision of services online, from N3.6 billion in 2010 to N32.1 billion in 2015.

The study further revealed that wider availability of mobile broadband could also vastly improve overall industrial productivity through improvements in business processes. A 73 per cent annual increase in the working population with access to mobile broadband, reaching 5.2 million users by 2015, will deliver an additional N140 billion to the Nigerian economy each year, the study revealed

Bateson said "Mobile is the most cost-effective way of delivering broadband services in Nigeria. Nigeria already has advanced mobile networks, such as Glo's recently launched LTE network, and has experienced significant take-up of HSPA mobile broadband. The laying of submarine data cables between Lagos and Europe has provided much of the international backhaul needed, but mobile is vital in providing 'last mile' connectivity to consumers, especially in rural areas. However, without proper spectrum allocation in line with internationally harmonised band plans and broader government support, it will not be possible to realise the full potential of mobile broadband."

The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 of the world's mobile operators and more than 200 companies in the broader mobile ecosystem. GSMA is focused on innovating, incubating and creating new opportunities for its membership and driving the growth of the mobile industry.