Thursday, January 23,
2020 09:16 AM / FBNQuest Research / Header Image
Credit: National Daily
The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 125.7 million in December, representing y/y growth of 13%. The figure implies density of 63% in a population estimated at 198 million, placing Nigeria well above the African average of around 16% as indicated by McKinsey.
In December there were c.3.2 million new internet subscriptions. Apart from subscriptions on multiple SIM cards for the purpose of separate data packages, our channel checks show that the surge last month was largely driven by the influx of temporary residents (vacationing) during the end-year festivities.
MTN Nigeria (MTNN) accounted for the largest share (43%) of total subscriptions. We note that it recorded 1.1 million new internet subscriptions in December, compared with 850,000 additional subscriptions recorded in November.
Since the start of the year, all four mobile operators have struggled with managing network issues. This has affected internet connectivity and slowed browsing speed considerably. We understand that two undersea cables (WACS and SAT3/WASC cable systems) on the continent's western coast have been damaged. This has created widespread network issues.
Over the past years, there has been increased dependency on electronic transactions. E-banking transactions have been disrupted on the back of the aforementioned issues. Based on local newswires, a tier one bank opted to extend its over-the-counter banking hours to accommodate spill overs from its digital clients.
Internet subscriptions (% chg; m/m)
Sources: Nigerian Communications Commission (NCC); FBNQuest Capital Research
Deepening broadband penetration equates to improved internet speed. According to the NCC, broadband penetration stands at 38%. The NCC recently announced that US$732m has been allocated to obtain an additional 30,000 kilometres of fibre over the next four years. This will be spread across the 774 local governments.
If disbursed accordingly, this investment in fibre cables would boost broadband penetration.