Mobile Money and Telcos | |
Mobile Money and Telcos | |
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PROSHARE | |
PROSHARE |
Monday,
December 23, 2019 /09:55 AM / By FBNQuest Research /
Header Image Credit: rednbox
The
latest data released by the NCC, the industry regulator, show that internet
subscriptions stood at 123.2 million in October, representing y/y growth of
15%. The figure implies density of 62% in a population estimated at 198
million, placing Nigeria well above the African average of around 16% as
indicated by McKinsey. In October there were c.414,000 new internet
subscriptions. Given that mobile network operators rarely provide uninterrupted
network services, subscribers tend to purchase multiple SIM cards to enable
access across networks in a bid to stay connected on separate data packages.
MTN Nigeria (MTNN) accounted for the largest share (42%) of total
subscriptions. We note that it recorded 488,000 new internet subscriptions in
October compared with 73,000 additional subscriptions recorded in September.
Following the NCC's approval of the 800 MHz spectrum band in Q2 2019, MTNN was
able to increase its 4G coverage to >35%. We assume this partly contributed
to the significant increase in its new internet subscriptions.
Among the mobile network operators, Airtel and MTNN recorded m/m
increases in internet subscriptions: 1.3% and 0.9% respectively. Meanwhile,
9mobile and Globacom posted decreases of -1.4% m/m and -1.3% m/m respectively.
Internet subscriptions are directly correlated with electronic
transactions. The latest data on electronic payments released by the National
Bureau of Statistics show that mobile payments accounted for 14% of the total
volume of electronic payments in Q3 2019.
Internet subscriptions (% chg; m/m) |
|
Sources:
Nigerian Communications Commission (NCC); FBNQuest Capital Research |
According to the NCC, broadband penetration stands at 38%. The FGN
targets 76% by next year. In our opinion doubling current penetration over the
next 12 months is an ambitious target. The sector still requires significant
investment in telecommunications infrastructure to drive broadband penetration
and affordability, and Nigeria's digital transformation.
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