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Enhancing Broadband Penetration

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Friday, Oct 20, 2017 9:45AM/ FBNQuest Research 

The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 92.2 million in August, representing a y/y contraction of -1.4%. 

The figure implies density of 50% in a population estimated at 185 million, placing Nigeria well above the African average of around 16% as estimated by McKinsey. In August there were 800,000 new internet subscriptions recorded, compared with a loss of 200,000 recorded in the previous month. 

The m/m increase recorded in internet subscriptions could be loosely linked to increased patronage of dual-SIM mobile phones. In light of the economic challenges, this proves more cost effective for consumers. However, to ensure uninterrupted internet access, sometimes both SIMs are connected to separate data packages. 

MTN again accounted for the largest share (35%) of total internet subscriptions. Airtel had the fastest m/m growth at 2.8%. Meanwhile, we noticed a -1.8% m/m reduction in subscriptions to 9Mobile’s network (formerly Etisalat), likely reflecting the issues the operator is facing. 

The FGN recently reiterated its commitment to attain broadband penetration of 30% by next year. It currently stands at 21%. 

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Although the growth in subscriptions is slowing, Nigeria is still an attractive market for telcos; comments by the syndicate of banks that took over 9Mobile confirm this point. A sale is expected by the end of this year. 

Based on recent remarks from the executive vice chairman of the NCC, Umar Garba Danbatta, the commission has started the process of licensing the 5.4GHz spectrum band. Although this is movement towards the broadband penetration target, we are unclear about the progress on sales of the eight remaining slots on the 2.6 GHz spectrum.

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