Despite the seeming increase in number of subscribers for Voice over Internet Protocol (VoIP) service in Nigeria, 85 per cent of connected users are inactive, Tech Track Africa can report. This has limited revenue source for the two VoIP service providers, Smile Communications and Ntel to only 16 per cent active users.
According to data released by Nigerian Communications Commission (NCC), as at January this year, connected lines for VoIP stood at 792,279. However, out of that, only 127,759 lines were active. Smile Communications accounted for 95 per cent of the active users with 121,261 subscriptions as at the end of January, leaving Ntel with just 6, 498 active subscribers, which is 5 per cent.
Sometimes referred to as IP Telephony or Internet Telephony, VoIP allows its users to do seamless communication without the need for telephones. 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 every day businesses 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 per cent between 2019 and 2024.
Though still one of the least subscribed services in the country, VoIP has gained traction in the last few years as active subscriptions jumped from paltry 33,142 in December 2016, to 127,759 in January this year.
However, despite the growth, VoIP telephony still has the lowest technology share of Nigeria’s telecommunications market, accounting for only 0.1 per cent, same with the Code Division Multiple Access (CDMA) segment which is already comatose. Communications over the GSM networks remains the largest in the country, accounting for 99.7 per cent of the market share.
Industry analysts believe that 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 internet is everywhere and at cheaper cost.
Broadband penetration in the country hit 33 per cent in February this year, according to NCC. The Executive Vice Chairman of the Commission, Prof Umar Danbatta recently expressed optimism that the country would achieve 70 per cent broadband penetration milestone in the next 5 years, even though a new national target of the penetration has not been made public yet.
Meanwhile, despite the extinction of the CDMA operators in the country, there were still 125,257 active CDMA lines as at January this year, according to NCC’s data. The telecom regulator said there were a total of 255,633 connected CDMA lines as at the period under review. In the same vein, NCC said there were 359,253 connected Fixed Wired/Wireless lines, while only 134,814 were active.