Uptick in GSM Internet Subscription in February 2020

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Tuesday, May 12, 2020 / 09:12 AM / By FBNQuest Research / Header Image Credit: Techcrunch

                                                                                

The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 131.6 million in February, representing y/y growth of 15%. The figure implies density of 66% in a population estimated at 198 million, placing Nigeria well above the African average of around 16% as indicated by McKinsey. In February there were c.3.3 million new internet subscriptions.  This increase can be partly attributed to the purchase of multiple SIM cards for the purpose of separate data packages.

                                       

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Towards end-February, most companies began preparations to adopt the working-from-home approach due to the Covid-19 pandemic. This has led to a significant increase in the usage of mobile internet devices which require SIM cards to function.

 

In February MTN Nigeria (MTNN) accounted for the largest share (43%) of total subscriptions. MTNN recorded a 2% m/m increase in data subscriptions. There has been a steady increase in MTNN data subscriptions since August 2019.

 

Based on MTNN's Q1 2020 results, data revenue grew by 59% y/y in Q1. Data traffic benefitted from increased data demand for remote working and entertainment purposes following the lockdown towards the end of the quarter.

 

Among the mobile network operators, Globacom recorded the highest m/m increase (6%) in internet subscriptions while 9mobile recorded a decline of -1.2% m/m.

 

Internet subscriptions (% chg; m/m)

 

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Sources: Nigerian Communications Commission (NCC); FBNQuest Capital Research

 

The increased reliance on internet services due to lockdowns and restrictions has strengthened the case for improved bandwidth (to enhance user experience). Deeper broadband penetration is therefore required. We understand that the FGN's broadband penetration target is 70% by 2025, compared with the current level of 39.6%.


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