Thursday, April 14, 2016 8:57AM /FBNQuest Research
The latest data released by the NCC, the industry regulator, show that internet subscriptions grew by 13% y/y to 93.6 million in February. This represents a density of 55%, placing Nigeria well above the African average of around 16% as estimated by McKinsey.
MTN enjoyed the leading, 38% market share. Our chart also shows a falling-off in telecoms and internet numbers since November. This could reflect pressure from the regulator over the mandatory registration of SIM cards.
The NCC data also capture porting activities. Despite emerging as the top operator for internet subscriptions, MTN suffered the largest loss of GSM subscribers as it accounted for 62% of total outgoing porting activities in February. Etisalat and Airtel were the main beneficiaries, accounting for 48% and 37% of total incoming porting activities respectively in the same period.
Last month, the NCC announced the resumption of the 2.6GHz spectrum auction. The FGN expects to earn a little over US$200m from the auction of 14 slots of the 2.6 GHz spectrum, as each slot would be issued at a reserve price of US$16m. This process is expected to enhance internet access in the country.
The inflation data for March show that communication prices rose by 4.2% y/y in March compared with 3.7% recorded in February. This component has a 0.7% weighting in the index. We suspect that the recorded increase was primarily due to recent hikes in the cost for data services.
The fx scarcity is also causing a strain within the sector. There are challenges importing telecommunications equipment which assist in enhancing broadband penetration. Given the country’s macro challenges, the broadband penetration target of 30% by 2018 may well not be attained.