Monday, October 04, 2021 / 10:58 AM / by CSL Research / Header Image Credit: Guardian NG
According to the recent data on key industry fundamentals published by the Nigerian Communications Commission (NCC), the total number of broadband subscriptions grew by 3.0% m/m to 78.3m in August 2021 but declined by 5.3% y/y. Similarly, broadband penetration snail-paced to 41.0% in August 2021 from 39.8% in July 2021 but lower than 43.3% in August 2020. Notably, since the government's directive on the NIN-SIM linkage in December 2020, the broadband penetration rate has been on a freefall, from 45.02% in December 2020 to a low of 39.6% in May 2021. This was also evident in the reported numbers of the telecom operators, even as the largest operator, MTN Nigeria, witnessed a decline in mobile subscribers and active data users in H1 2021 by 9.9% and 0.3%, respectively, relative to December 2020.
While the pandemic strained many sectors, the telecommunications sector proved to be the silver lining. The increased adoption of digital channels for telecommuting and social interactions was positive for the sector, resulting in increased broadband penetration to a peak of 45.9% in October 2020 from 37.8% as of December 2019. This further supported the quest to attain a digital economy amidst several efforts made by the government. However, due to the regulatory restrictions placed on new SIM sales and activation, the narrative changed, and penetration rate became slower than anticipated. Though the restrictions have been lifted, the ongoing SIM-NIN integration process appears to be a clog in the wheel of the Minister of Communications and Digital Economy's announced plan to achieve 50% by the end of 2021.
The SIM-NIN integration is imperative to enhance national security, but unless the process becomes seamless for subscribers, achieving a 50% broad penetration in 2021 may be a cold day in July. Last week, the government announced that the deadline for the integration exercise will be 31 October 2021. Based on information from the National Identity Management Commission (NIMC), at least 140 million Nigerians are yet to enroll for the NIN, indicating that the government may be forced to extend the deadline as most of the population will be denied services should the October deadline remain in place.