Friday, October 15, 2021 / 11:28 AM / by
FBNQuest Research / Header Image Credit: iStock
Our chart below, drawn from the Nigerian Communications Commission (NCC) data, shows internet subscriptions at 139.9 million in August. This represents a -6.3% y/y decline, and the first m/m increase (0.4%) after eight consecutive months of steady declines which we attribute to the FGN's temporary ban on the sale and activation of new SIM cards. The m/m decline which began in December '20 when the ban was announced peaked in March '21 at -2.4%. The ban was lifted in April '21 and the rate of decline in active internet subscriptions has steadily decreased since then.
Nigeria is regarded as the biggest telecoms market in Africa with a teledensity of 99.18% as at end-August '21, based on a population estimate of 190 million. The latest national accounts show that telecommunications grew by 5.9% y/y in Q2 '21 and contributed 14.4% to the GDP. This represents its highest contribution to GDP so far.
Last month, the President approved the deployment of 5G network in Nigeria. According to the minister of communication and digital economy, the deployment is scheduled for January '22 and will be carried out in phases, starting from major cities in the country.
We understand that as part of its 5G technology deployment plan, the NCC will hold an auction of slots in the 3.5GHz spectrum band for Mobile Network Operators (MNOs). The commission has pegged the reserve price for acquiring each slot at NGN75bn - NGN100bn and anticipates raising NGN500bn from the auction.
The NCC data also show that in August '21, MTN Nigeria had the largest market share (41.9%) with 58.6 million internet subscribers. The market share for Globacom, Airtel and 9mobile were 27.6%, 26.2%, and 4.3% respectively.
Broadband penetration stood at 41.0% in August '21, from 39.8% recorded in July. The Nigeria National Broadband Plan for 2020-2025 which was unveiled last year aims to deliver data download speeds of at least 25Mbps in urban areas and 10Mbps in rural areas, with effective coverage available to at least 90% of the population by 2025 at a price not more than NGN390/GB of data. While not unachievable, attaining a population coverage target of 90% would require concerted effort by key stakeholders and sizable investments of between USD3.5bn and USD5bn by the major network operators.
Telecoms and internet access (end-period; million units)
Source: Nigerian Communications Commission (NCC); FBNQuest Capital Research