Q2 2021 Telecoms Data: Improved Prospects for Telecoms

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Friday, August 13, 2021 / 09:42 AM / By FBNQuest Research / Header Image Credit: Techerati

 

The NCC provides the most timely and regular set of domestic consumption indicators. Its data are particularly useful because the mobile has long been part of the household basket of core goods and services. Telecoms in Nigeria, as in other developed and developing economies, has been among the few sectors to have benefited from the COVID-19 pandemic, posting growth of 7.7% y/y in Q1 '21 and 17.6% in the previous quarter.

 

The regulator's monthly data, however, show a steady decline in mobile lines and internet connections since November. Household demand has been squeezed of course but the loss of 20 million lines and 15 million connections over the period can be traced to regulation. The NCC imposed a temporary halt to sales of new SIM cards for audit purposes and then stipulated that all new sales must be linked to a national identity card. (Similar measures have been taken elsewhere for legitimate security purposes.)


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In its results covering Q2 '21 the industry leader, MTN Nigeria (MTNN), announced that it had lost 2.6 million active mobile subscribers in the previous three months.

 

However, MTNN's results also showed robust growth across all core business segments. Revenue from data increased by 54% y/y and 16% q/q, and from voice by 20% y/y.  The expansion of its 4G coverage and the healthy rise in its smartphone penetration have been important drivers. Its figures for average revenue per unit (ARPU) were well received by the market.

 

Looking ahead, the resumption of SIM card sales will surely reverse the decline in active lines evident from our chart. New products and new consumers in the growing population also underpin the industry's prospects. The attractive returns explain why operators have sizeable investment plans. At this stage in the pandemic, they can assume that working from home (WFH to all) is more than a temporary fad.

 

Our plea for the sake of better analysis of the economy is for a single agency to produce a monthly set of output and consumption indicators, and thereby supplement the good work of the NCC. Some are already available but are released piecemeal by different bodies, and often with a long-time lag.

 

Our wish-list is unambitious, including: production of sugar, cement, fertilizer and crude oil; generation and consumption of electricity; visitor arrivals at international airports; and imports of containers and petroleum products.

 

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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