Recent data on key industry fundamentals published by the Nigerian Communications Commission (NCC) showed that the total number of broadband subscriptions grew 3% y/y but declined 2% m/m to 78.6m in March 2021. Similarly, broadband penetration contracted to 41.2% in March 2021 from 42.1% in February 2021. We note that both broadband subscription and penetration have declined for the fifth consecutive month since the m/m increase in October 2020. Furthermore, the number of internet subscribers also declined 2% m/m to 144.9m in March while teledensity fell to 100.8% in March 2021 from 102.7% in February 2021.
We note that the mandatory integration of the National Identification Number (NIN) and Subscribers Identification Module (SIM) card in the country significantly affected the operations of telecom companies in the first quarter of the year (Q1 2021). This was evident in the performance of the market players in Q1 2021 despite the country's favourable demographics and the need to stay connected amid the new strain of the virus. The sub-sector which comes under the Information and Communication sector recorded a single-digit growth of 7.69 % in Q1 2021 from 17.64% in Q4 2020 and 9.71% in Q1 2020, marking the lowest growth posted since Q1 2018.
Currently, the regulatory restrictions on new SIM sales and activations have been lifted, thus making headroom for rapid recovery in the sector and the services sector at large. Also, continued investments in improving internet infrastructure by industry players should continue to unlock potentials and improve service delivery.