February 6, 2024/FBNQuest Research

According to the most recent data from the Nigerian Communications Commission (NCC), total active mobile lines and internet connections increased by +0.5% m/m and +0.6% m/m to 223.2 million and 162.1 million as at end-November ’23. The increase marks the third consecutive monthly rise in mobile and internet connections. Additionally, the latest figure represents a mobile teledensity of c.112% and an internet penetration of 81% based on a population of 200 million.

Notably, all the major network operators registered net subscriber gains, with a combined net addition of c.1.1 million users in Nov ’23.  

MTN Nigeria (MTNN) retained its leadership position, with a slight increase of 236k users in Nov ’23, taking its total customer base to 86.0 million, representing a market share of 38.6%.    

Airtel Nigeria reported the largest subscriber gain with a net subscriber addition of about 628k, with a subscriber base of 61.3 million. Consequently, its market share increased by 15bps m/m to 27.5%.

Similarly, Globacom and 9mobile also registered net subscriber gains of 155k and 36k, taking their customer base to 61.5 million and 14.0 million, respectively.

The information and communication sector has remained resilient, despite the rise in operating costs due to the high inflationary environment, which has been further exacerbated by the NGN depreciation.

The sector has registered uninterrupted growth for 23 consecutive quarters, the most consistent growth trend among all the activity sectors.

The latest national accounts show that the telecommunication sector delivered a growth of 6.7% y/y in Q3 ’23, down from 8.6% in the previous quarter.

The sector’s growth has been primarily supported by continuous robust revenue growth for GSM network operators, the largest segment within the sector.  

However, given the ongoing depreciation of the naira currency, we expect that higher forex losses will continue to negatively impact the net-finance costs of telecoms companies. Consequently, we expect the projected increase in finance costs to partially offset the financial performance of publicly listed GSM companies.