July 2021 NCC Data: Still a Stretch to Achieving Broadband Goal


Tuesday, September 07, 2021 / 12:02 PM / FBNQuest Research / Header Image Credit: FBNQuest 


Our chart below which is drawn from data from the Nigerian Communications Commissions (NCC) show a steady decline in broadband internet subscriptions since November '20. Mobile internet connections account for over 99% of Nigeria's broadband base, according to the NCC. As such, the drop mirrors the downward trend in the number of active mobile lines, as a result of the regulator's temporary halt of SIM card sales, and the National Identification Number (NIN) and SIM card integration exercise.


We see from the data that the regulatory exercise led to total broadband disconnections of c.10.1 million lines or a 12% reduction to c.76 million between November '20 and July '21. This implies that broadband penetration fell to 40% from 45% during the same period.


Using the share of company specific internet subscribers as a proxy, in the absence of similar data for broadband, we can see that MTN Nigeria (MTNN) accounted for c.45% (or c.6.7 million) of the total share of internet disconnections, a reflection of its dominance in market share terms. Airtel, Glo, and 9Mobile were responsible for 36%, 11%, and 8% of the lost internet subscribers respectively.


Based on the new national broadband plan 2020-2025, the FGN projects an ambitious broadband penetration target of 70% by 2025. Thanks to investments by network providers, some progress has been made in recent years in terms of internet access, with the broadband penetration rate peaking at c.46% in October '0 from c.20% in 2017.


However, as shown by the data, some of the progress attained toward the coverage target has been reversed. Data from the International Telecommunication Union (ITU) show that Nigeria's broadband penetration trails those of South Africa, Egypt and Kenya with penetration rates of c.113%, 74% and c.48% respectively.


For a nation like Nigeria where almost 60% of the population lack broadband connectivity, achieving good quality broadband access will require estimated investments of c.USD5bn. according to industry experts.


Studies by the ITU suggest that a 10% increase in broadband penetration is likely to translate to increases of 2.0% and 1.8% in GDP for low-income and middle-income countries. On this basis, we estimate the benefit of such investments to the economy at almost c.6.0% of GDP.


Broadband subscriptions (millions) and penetration rate (%)

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Sources: Nigerian Communications Commission (NCC); FBNQuest Capital Research

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