August 13, 2020 / 09:27 AM / By FBNQuest Research / Header Image Credit: Pinterest
latest data released by the NCC, the industry regulator, show that internet
subscriptions stood at 143.3 million in June, representing y/y growth of 17%.
The figure implies density of 72% in a population estimated at 198 million,
placing Nigeria well above the African average of around 16% as indicated by
McKinsey. In June there were c.2.6 million new internet subscriptions. There
has been partial easing of the restrictions on personal movements. However, the
work-from-home approach is still firmly in use.
addition, schools are yet to resume physical classes, hence virtual learning is
the main route for students (notably those enrolled in private schools).
Therefore, the steady m/m increase in internet subscriptions is not surprising,
given that mobile internet devices require SIM cards to function.
Anecdotal evidence shows that employees within the
formal sector (particularly in Lagos and Abuja) that have been forced into the
virtual (digital) economy patronize at least three internet service providers.
This allows them to enjoy stable internet connections and avoid disruptions to
virtual meetings and conferences.
Based on data from the National Bureau of Statistics,
in Q1 2020 Lagos State had the largest number of internet users in the country,
with slightly over 17 million. It was followed by Kano State with 8.3 million
and then Ogun State with 8.0 million.
The NCC data show that in June MTN Nigeria (MTNN)
accounted for the largest share (42%) of total subscriptions. It recorded
a 3.0% m/m increase in data subscriptions. MTNN's revenue grew by 8% y/y
in Q2, mainly on the back of stellar y/y growth of c.56% in data revenue.
(% chg; m/m)
Sources: Nigerian Communications Commission (NCC);
FBNQuest Capital Research
Among the mobile network operators, 9mobile recorded a
decline of -2.0% m/m in internet subscriptions in June.
Broadband penetration currently stands at 41.3%.
Deepening broadband penetration will result in
improved internet speed. Connectivity has become somewhat of a life
tool due to the ongoing pandemic. Heavy dependence
on internet services is a core requirement to boost productivity.
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