The Value-Added Service (VAS) sector within Nigeria's massive $76 billion telecommunications industry has reported an extraordinary year of growth, according to the latest data from the Nigerian Communications Commission (NCC).
Explosive Growth in Subscriptions and Revenue
The market witnessed a significant 25.02 per cent surge in active subscriptions throughout 2024. The number of users jumped from 10,845,134 in 2023 to an impressive 13,559,266 by the end of December 2024.
Even more staggering is the financial performance. The total revenue generated by VAS licensees skyrocketed to N83.1 billion in 2024. This marks a monumental 470.74 per cent increase from the N14.6 billion recorded in the previous year.
Understanding the VAS Landscape
Value-Added Services are auxiliary telecom offerings provided by licensed operators across all 36 states of Nigeria. This diverse segment includes a wide range of popular services that Nigerians use daily.
Key offerings driving this growth include:
- Mobile banking and financial services
- USSD (Unstructured Supplementary Service Data) for various transactions
- Enterprise bulk messaging and SMS services
- Call ringback tones and entertainment content
- Electronic airtime distribution
- Special numbering and content services using short codes
Operational Costs and Local Investment
With great growth came increased operational expenditure. The total operating cost for VAS operators rose by 49.1 per cent, moving from N53.6 billion in 2023 to N79.9 billion in 2024.
In terms of capital expenditure, local investments in the VAS segment reached N2,757,164,586 as of December 2024. This substantial investment underscores the sector's commitment to expanding its infrastructure and service capabilities within Nigeria.
The human capital aspect also saw positive development. The total staff strength in the VAS market segment stood at 713 employees by the end of the reporting period. The workforce is predominantly Nigerian, with 703 local staff comprising 440 males and 263 females. Expatriate staff numbered just ten individuals.
This remarkable performance highlights the increasing reliance of Nigerian consumers on digital services and the VAS sector's crucial role in driving financial inclusion and digital entertainment across the nation.
