Mobile Money and Telcos | |
Mobile Money and Telcos | |
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Tuesday, June 23, 2020 / 09:14 AM / by FBNQuest Research / Header Image Credit: PiiComm
The
latest data released by the NCC, the industry regulator, show that internet
subscriptions stood at 138.3 million in April, representing y/y growth of 16%.
The figure implies density of 70% in a population estimated at 198 million,
placing Nigeria well above the African average of around 16% as indicated by
McKinsey. In April there were c.2.5 million new internet subscriptions. The
working-from-home approach due to movement restrictions triggered by the
Covid-19 pandemic has resulted in a surge in the usage of mobile internet
devices that require SIM cards to function.
Furthermore, to ensure internet stability, customers purchase separate
data packages from different service providers.
In April MTN Nigeria (MTNN) accounted for the largest
share (42%) of total subscriptions. It recorded a 1.2% m/m increase in data
subscriptions. MTNN's Q1 revenue grew by 17% y/y, primarily driven by growth in
data revenue. Data traffic benefitted from increased data demand for remote
working and entertainment purposes.
Among the mobile network operators, Globacom recorded
the highest m/m increase (6.1%) in internet subscriptions while 9mobile
recorded a decline of -3.9% m/m.
Internet subscriptions (% chg; m/m) |
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Sources: Nigerian Communications
Commission (NCC); FBNQuest Capital Research |
Broadband penetration currently stands at 39.6%. Deepening broadband
penetration will result in improved internet speed. The ongoing global pandemic
has led to heavy dependence on internet services, as connectivity is now a core
requirement to boost productivity.
Based on the national accounts for Q1 2019 released by the National
Bureau of Statistics, the telecommunications sector grew by 9.7% y/y in Q1,
compared with 10.3% recorded in Q4. This sector is a visible beneficiary of
Covid-19.
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