February 9, 2021/Proshare

by FBNQuest Research

The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 153.8 million in December, representing y/y growth of 22%. The figure implies density of 78% in a population estimated at 198 million, placing Nigeria well above the African average of around 16% as indicated by McKinsey. In December, we noticed a decline in internet subscriptions.

There were c.560,000 disconnected lines when compared with the previous month. We assume that the ongoing National Identification Number (NIN) and Subscriber Identity Module (SIM) integration exercise impacted the figures. Based on anecdotal evidence, customers appeared to prefer managing just one SIM in order to avoid the stress-related issues linked to the NIN-SIM linkage process. 

The NCC data show that in September, MTN Nigeria (MTNN) accounted for the largest share (42%) of total subscriptions. We noticed from the commission’s data that in December MTNN lost 735 subscribers but gained 792, resulting in a net gain of 57. It recorded a -0.6% m/m decrease in internet subscriptions in December. 9mobile and Airtel also recorded m/m decreases of -1.7% and -0.6% respectively.

Broadband penetration currently stands at 45.0%. The FGN targets 76% this year. The mandatory push into the virtual landscape due to the COVID-19 pandemic has further exposed the infrastructure gaps within the country’s technology sector.

The deployment of Base Transceiver Stations (BTS), fibre optic cables and other related infrastructure are central to the provision of improved service experience by the respective telecoms service providers. Nigeria currently has 54,725km fibre optic coverage, with a target to deploy 120,000km across the country by 2025.

Airtel has renewed its spectrum licence in the 900MHz and 1800MHz bands for a period of 10 years effective December 1, 2021. It paid NGN71.6bn (USD188m) as renewal fees for the spectrum licences. This will assist with expanding broadband penetration in the country.

Based on the latest national accounts, telecommunications posted double digit growth of 17.4% y/y in Q3 ’20. The ongoing shift to remote working as well as educational services for schoolchildren triggered by the pandemic have supported growth in this sector.

Internet subscriptions (% chg; m/m)