Another Rise in Internet Subscriptions; Stood At 151.5m in September 2020

Thursday, November 19,  2020 / 09:11 AM / by FBNQuest Research / Header Image Credit:   Arivon Tech  

The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 151.5 million in September, representing y/y growth of 23%. The figure implies density of 76% in a population estimated at 198 million, placing Nigeria well above the African average of around 16% as indicated by McKinsey. In August there were c.1.7 million new internet subscriptions. One core driver of the steady m/m upticks in subscriptions is the ongoing work-from-home approach triggered by the pandemic, as most employees require multiple mobile internet devices to stay connected to work-related matters.

The NCC data show that in September MTN Nigeria (MTNN) accounted for the largest share (42%) of total subscriptions. We noticed from the commission's data that in September the network operator experienced significant outgoing porting activity, with a loss of over 3,850 subscribers. However, its incoming porting subscriptions stood at 5,635 thereby resulting in a net gain of 1785 subscriptions.

The latest earnings release by MTNN show that revenue grew by 17% y/y in Q3, a marked improvement over the 8% y/y growth it delivered in Q2. The solid sales growth was largely driven by a 56% y/y growth in data revenue, on the back of sustained data demand for remote working, entertainment and streaming services.

Among the mobile network operators, MTNN recorded a 0.7% m/m increase in internet subscriptions in September. Meanwhile, 9mobile, Airtel and Glo recorded m/m increases of 1.5%, 1.3% and 1.7% respectively in the same month.

Broadband penetration currently stands at 45.4%. The FGN targets 76% by next year. The mandatory push into the virtual landscape due to the covid-19 pandemic has further exposed the infrastructure gaps within the country's technology sector. Significant investment in telecommunications infrastructure to drive broadband penetration and affordability is still required.

Based on the latest national accounts, in Q2 2020 the telecommunications sector grew by 18% y/y and contributed 14% to total GDP in the same quarter.

Internet subscriptions (% chg; m/m)

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

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