Deepening internet penetration - Emerging Economic & Business Options

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Thursday, November 27, 2014 9:52 AM / FBN Capital Research

The latest data released by the Nigerian Communications Commission (NCC) show that internet subscriptions grew by 32% y/y from 56.1 million in September 2013 to 73.9 million in September 2014. This represents a density of 43%, placing Nigeria well above the African average of around 16% as estimated by McKinsey.


Although the strong double-digit growth of 32% y/y recorded for internet subscription is higher than the 11% y/y growth in active telecoms lines, the level of internet penetration is still low when compared with the teledensity of 79% on the basis of 134.5 million active lines recorded in September.  


Presently, Nigeria’s broadband penetration is relatively low at around 7%. However, the FGN is determined to grow broadband penetration to 30% by 2018.  


In a bid to achieve this target, the NCC plans to auction two slots of 70MHz spectrum in the 2.6GHz band. This auction was initially set to take place next month but has been postponed to enable the regulator make conclusions on administrative requirements linked to the frequency licences.


Other efforts include that of MTN which plans to launch a 100 gigabit-per-second fibre-optic service. This will contribute to increased broadband connectivity and, by extension, higher internet penetration across the country.


Data from the NCC show that MTN, Airtel and Etisalat accounted for 52%, 18% and 8% of active internet subscription respectively in September.

The impact of the y/y growth achieved in both active lines and internet subscriptions cuts across different sectors of the economy. E-commerce in particular has expanded through online platforms such as Jumia, Konga and Wakanow just to mention a few. Recently, a tier-1 bank in partnership with Airtel launched a mobile money platform. This new development will assist in promoting financial inclusion; the CBN’s financial inclusion target is set at 80% for 2020. 

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