Fidelity Bank targets fresh prospects in Nigeria’s $944m Telecoms Industry

Fidelity Bank Plc has expressed its readiness to continually provide innovative financing schemes to support network expansion initiatives including spectrum acquisition and broadband infrastructure deployment by telecommunications operators to boost Quality of Service (QoS) and penetration.

The bank’s Telecoms Group which will spearhead this process disclosed recently that the telecoms industry had witnessed significant increase in demand for voice and data services since the outbreak of Coronavirus (COVID-19) and the attendant lockdown imposed by the Nigerian government.

As the Covid-19 pandemic rages on, businesses, schools and consumers alike continue to depend on telecoms services to work from home (WFH), maintain social ties, consummate financial transactions, access entertainment, requisite trainings resources among others.

Invariably, this trend has resulted in a huge surge in demand for telecoms services with positive impact on operators’ revenues and an urgent need for them to invest significant Capital Expenditure (CAPEX) in Infrastructure rollout to guarantee superior customer service delivery and reach underserved communities across Nigeria.

Only recently, the National Bureau of Statistics (NBS) disclosed that Foreign Direct Investment (FDI) into the telecoms sector increased tremendously by 725 percent in 2019 to hit $944.05 million up from $114.43 million recorded in 2018. The massive inflow of foreign capital into the sector was driven by some acquisitions that occurred in the sector during the year, listing of companies for equity input, operators’ aggressive drive on improving Fourth Generation (4G) infrastructure, among others. In spite of this, the telecoms industry remains highly capital-intensive, hence, the need for further investment.

In a recent report, the Nigerian Communications Commission (NCC) confirmed the spike in voice and data traffic which according to the regulator has necessitated more fibre-optic deployments in the country to boost capacity.

Lagos State is actively engaged in improving access to broadband services as part of its smart city initiative. MTN Nigeria’s Q1 unaudited financial result showed a significant increase in its revenue lines - data (up by 32.4 percent), FinTech (up by 22.9 percent), voice (up by 12.7 percent) and service revenue (up by 13.4 Percent) with CAGR in revenue of 20 percent.

Fidelity Bank anticipates similar trends and numbers for the other telecoms companies operating in Nigeria, Africa’s most populous country.

In recent times, the bank has witnessed significant growth in collections, demand for loans from Mobile Network Operators (MNOs) to spur network expansion initiatives and acquisitions of Spectrum to boost QoS.

Through its robust branch network, the bank has also positioned itself as the brand of choice for the airtime distributors and contractors by providing easily accessible loans to boost airtime sales and infrastructure rollout out in the telecoms industry.

In the Financial Technology (Fintech) sector, the bank has also seen a significant upsurge in the use of alternative channels and online registrations to aid financial transactions. However, players in the Financial Inclusion space have also seen increased demand for cash-in and cash-out services especially during the lock down. To this end, Fidelity Bank saw significant increase in both volumes and revenues from Electronic banking via Point of Sale (POS) transactions of over 25 percent and increased demand by players in the Financial Inclusion space for more terminals to support this demand.The bank has stepped up efforts to integrate its services with established fintechs to aid payments and transfers by Merchants.

Overall, the impact of the ‘new normal’ occasioned by COVID -19 outbreak has been positive for the Fintechs and Telecoms Industry.

However, the pandemic has affected the supply chain negatively as handsets, tablets, POS terminals, Personal Computers (PCs) and other network infrastructure required in communicating are not readily available due to slow down in manufacturing, lack of Foreign Exchange (FX) to meet obligations as well as slowdown in transportation.