Friday, July 24, 2015 08:45AM / FBN Capital Research
The latest data released by the NCC, the industry regulator, show that internet subscriptions grew by 30% y/y to 88.1 million in May. This represents a density of 52%, placing Nigeria well above the African average of around 16% as estimated by McKinsey.
The surge in internet penetration has enhanced trade by spurring e-commerce transactions. Based on industry information, the leading online stores achieve about N1.5bn worth of transactions per month.
The Global Connectivity Index (GCI), a quantitative assessment tool, ranks Nigeria 47th globally and places the country among the top three emerging broadband markets. It is promoted by Huawei, the large Chinese telecoms operator.
Nigeria’s five submarine fibre-optic cables are expected to facilitate ubiquitous internet and broadband services. However the pace has been slow and the country’s submarine cable capacity utilisation rate is still less than 10%.
Submarine cables have about 19.2 terabytes in capacity across Africa, including over 340 gigabytes bandwidth capacity in Nigeria. The five operators are MainOne, Globacom, MTN Group, NITEL and Dolphin Telecoms.
As at 2014 investment in submarine cable systems across Africa was approximately US$20bn, with Nigeria accounting for 35% of this figure.
Last year broadband penetration stood at 8%. The FGN’s medium-term goal is a rate of 30%.
Over the past few years, the broadband sector has attracted sizeable investment. We expect that the new government will build upon existing policies geared towards expanding this industry.
1. Deepening internet penetration – Jun 18, 2015
2. E-commerce as a tool for economic expansion Jun 08, 2015
3. GDP by Expenditure Grows by 3.86% YoY in Q1’15 - NBS – Jun 01, 2015
4. Nigeria’s Real GDP Records 3.96% Growth in Q1’15; Lower Than Q4’14 Growth Rate – May 14, 2015
5. Footsteps of Nigeria's e-commerce market – Jan 22, 2015