September 5, 2024/FBNQuest Research

Nigerian Communications Commission data shows broadband trends over the past two years, with broadband penetration peaking at 48.5% in Feb ’23, dropping to 40.8% in September 2023, and rising subsequently. Despite a 2.5% y/y increase in subscriptions to 94.2 million in March 2024, penetration fell by 468 bps to 43.5%. Unlike the 2021 decline driven by the NIN-SIM integration exercise, the recent drop is due to the regulator’s adoption of a higher population base of 217 million compared to 191 million used until August 2023.

• To illustrate this point, broadband subscriptions have registered an average monthly increase of 0.3 million since January 2023, excluding a few months of brief moderation.
• Additionally, total data usage increased by 34% y/y (8% m/m) to 753,388.8 terabytes (TB) in Mar ’24, implying an average subscriber data usage of around 4.7 gigabytes.  
• Mobile internet connections account for 99% of Nigeria’s broadband base. Consequently, we use the market shares of mobile network operators’ internet users as a proxy.
• On this basis, MTN Nigeria emerges as the clear industry leader, with 69.3 million internet users at the end of Q1 ’24, equating to an estimated market share of 42.3%.
• Airtel Nigeria and Globacom ranked second and third with 46.8 million and 44.4 million internet users, accounting for shares of 28.6% and 27.0%, respectively. 9Mobile held the smallest share among GSM operators, with 2.0% of the market.
• The current mobile broadband penetration rate of 43.5% indicates that there is still a significant gap to bridge before attaining the federal government’s target of 70% by 2025.
• The mismatch between investment in the sector and desired outcomes is evident, as second-generation (2G) networks represent over 57% of Nigeria’s mobile and internet connections.
• 4G networks account for a 33% share, while 3G and 5G account for 9% and 1%, respectively.
• The positive economic effects of broadband connectivity are well established. Research from the International Telecommunications Union (ITU) indicates that a 10% rise in broadband penetration could lead to GDP growth of 2.0% in low-income countries.
• To unlock broadband’s economic potential, Nigeria must address infrastructure gaps, invest in higher-generation networks, and enhance fibre connectivity to drive sustainable growth.