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Active VoIP subscriptions rise to 238,575

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Despite the increase in the number of active users, the growth of VoIP service in Nigeria has been slow

 

 

Active subscriptions for Voice over Internet Protocol (VoIP) service in the country rose by 2.6 per cent in July as the operators added a total of 6,024 new customers within the month.

 

This brought total active users of the service in the country to 238,575 as of July, from 232,551 recorded in June.

 

Otherwise referred to as IP Telephony or Internet Telephony, VoIP allows its users to do seamless communication without the need for telephones. However, subscription to this service is still very low in Nigeria.

 

According to data released by the Nigerian Communications Commission (NCC), only two operators are currently offering the service in Nigeria and that include Smile Communications and Ntel. From the data, Smile is the leading player in that segment of the telecommunications market as it accounted for 98.8 per cent of the total VoIP subscriptions as of July this year.

 

The company’s active VoIP subscriber base stood at 235,721. Ntel, on the other hand, remained a distant second operator with 2,854 VoIP subscribers, representing just 1.2 per cent of the total number of active subscribers.

 

NCC’s data showed that Ntel which joined the VoIP segment in January 2017, became the larger operator by subscriptions in just four months as its active subscriptions hit 61,817 in April 2017, while Smile was second with 42,308 subscriptions. Ntel has, however, lost most of its subscribers in the last two years, leaving it with a smaller fraction of active customers.

 

Further analysis of the VoIP data showed that while Smile had consistently recorded an increase in its subscriber base each month, Ntel had been declining. In July, for instance, while Smile’s subscriptions increased from 232,551 in the previous month to 235,721, Ntel declined from 2,961 in the previous month to 2,854.

 

Meanwhile, the number of inactive VoIP users in the country continues to increase, leading to declining revenue for the operators. NCC’s data showed  that a total of 1.05 million subscribers were connected as of July, however, only 238,575 were actively using the service.

 

This showed that 808, 377, representing 77 per cent of the connected subscribers have become inactive. Analysts attributed this to the proliferation of Over the Top services (OTTs) such as Whatsapp, Facebook, among several others, which also allow voice and video calls over the internet. This means that with a subscription for data, which  is mostly done on mobile networks, subscribers can make calls using the OTT platforms.

 

While this is also affecting the mobile network operators in terms of dwindling voice revenue, the loss is being covered by the rising mobile data subscriptions. According to the NCC report, mobile internet subscriptions in the country stood at 146.7 million as of July 2020.

 

The adoption of Voice over IP is observed across various industries worldwide especially in the developing regions in order to cater to their growing demand for everyday business activities. With its real-time communication services, it has helped organisation across various industries to lower the communication costs.

 

The global VoIP market was valued at $77.4 billion in 2018 and is expected to reach $93.2 billion by the end of 2024, growing at a CAGR of 3.1 percent between 2019 and 2024.

 

However, despite the modest growth in Nigeria, VoIP telephony still has the lowest technology share of Nigeria’s telecommunications market, accounting for only 0.12 per cent share of the market.

 

Communications over the GSM networks remains the largest in the country, accounting for 99.83 percent of the market share. Industry analysts believe that the VoIP market in Nigeria would come into full scale when the country is able to deepen broadband penetration, noting that the service would not get wider acceptance until the internet is everywhere and at a cheaper cost.

 

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