A hiccup in broadband expansion

Proshare

Friday, June 17, 2016 10:15AM /FBNQuest Research

The latest data released by the NCC, the industry regulator, show that internet subscriptions grew by 8% y/y to 92.3 million in March. This represents a density of 50%, placing Nigeria well above the African average of around 16% as estimated by McKinsey.

Our chart shows a steady drop in telecoms and internet numbers since November. This may be due to pressure from the regulator on GSM operators and other network providers to deactivate all unregistered and poorly registered SIM cards.

MTN suffered the largest loss of GSM subscribers as it accounted for 57% of total outgoing porting activities in March. Meanwhile in the same month, Etisalat gained the highest number of subscribers, accounting for 53% of total incoming porting activities.

In March the NCC announced the resumption of the 2.6GHz spectrum auction. MTN turned out to be the only qualified bidder but opted for just six slots out of the 14 slots of the spectrum.

One slot of the frequency is equivalent to two portions of 5MHz. The commission had set a reserve price of US$16m per slot; MTN will be required to pay a total US$96m for the licence.



The NCC intends to meet with other operators on the back of their non-participation in the auction. It seems the regulator may be open to relaxing its conditions to encourage bids for the remaining eight slots. If properly implemented, the 14 slots of the 2.6GHz spectrum auction are expected to enhance internet access in the country.

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