Absa, a leading pan-African bank with a strong footprint on the African continent, highlighted the opportunities for new ventures in the Nigerian telecommunications sector as well as the unlimited growth potential of the sector.
The bank said opportunities and growth potential remain strong, despite challenges in the sector, and therefore called on smart investors and entrepreneurs to tap into the opportunities and expected growth.
The banking group, which operates two licensed subsidiaries in the country, Absa Capital Markets Nigeria Limited and Absa Securities Nigeria Limited, and has deep expertise in advising and financing telecommunications, media and technology transactions across the continent. , provided an interesting perspective on the sector during a media roundtable recently held in Lagos on the topic The Telecommunications Sector in Nigeria: Exploring the Opportunities.
According to Sadiq Abu, Managing Director of Absa Nigeria, the issues hampering the smooth functioning of telecom operators in the country include electricity deficit, vandalism of transmission infrastructure, theft and multiple taxation.
He said that despite the operational challenges, the sector continues to present huge growth opportunities, especially in broadband internet, last mile connectivity and telecommunications infrastructure (data centers, fiber networks optics, etc). There remains a large and growing demand for data, despite the apparent maturity of voice revenue streams.
“The telecommunications industry is attracting the interest of local and foreign investors. This is because the industry’s capacity for growth is limitless. And telcos are already strategically developing useful business vehicles to take advantage of emerging opportunities in the sector,” Sadiq said.
“Meanwhile, the various challenges hampering the smooth operation of telecom operators present vast opportunities for smart entrepreneurs who possess an innovative and infallible view of what can be done to help players maintain their cost advantage or protect critical transmission infrastructure assets through the provision of services that protect against disruptions in supply chains.
Also speaking at the event, Hasnen Varawalla, Co-Head of Investment Banking Origination for Absa, said Nigeria’s telecom sector is one of the largest sectors on the African continent and can serve as a driving force. powerful for broader job creation, financial inclusion and a strong foreign economy. direct investment (FDI).
“Two of the telecom operators listed on the Nigerian Stock Exchange (NGX) currently account for 54% of NGX’s overall capital base and by 2021 the sector would have contributed around 17% of GDP,” Varawalla said.
He explained that the sector promotes financial inclusion, supports fintech activities, contributes to the ongoing explosion of e-commerce services and integrates cities. He said some of the industry’s attractive propositions include telecommunications infrastructure (data centers, fiber networks, etc.), the gradual deployment of 5G technology combined with the new interest in digital work tools to meet the demands of working arrangements, as well as emerging fintech trends.
“Absa is an important provider of capital for the entire telecommunications sector in Africa. Our role, however, is not limited to providing capital; we are among the most active advisers to telecommunications/telecom infrastructure companies having led and/or participated in many landmark transactions across the continent, including Airtel’s £595m IPO on the NGX, the sale of 9mobile to Teleology, the IPO of Vodacom on the stock of Tanzania Exchange, the IPO of IHS for 378 dollars on the NYSE, the acquisition by IHS of the tower portfolio of MTN in South Africa, among others.
“We continue to make our deep telecommunications industry expertise available to help telecom operators take advantage of emerging opportunities that will accelerate the timely realization of their growth aspiration,” Varawalla said.
Adedotun Sulaiman, the chairman of Absa Nigeria, enthused about the potential trapped in the Nigerian telecom sector and the implication for the economy. He promised that Absa will always be available to provide a useful perspective on key sectors of the economy.