Steady Rise in Internet Subscription; Stood At 138.3m in April 2020

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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.


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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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