Thursday, November 07, 2019 /08:40 AM
/ By FBNQuest Research / Header Image Credit: Brighton Blogs
The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 122.8 million in September, representing y/y growth of 16%. The figure implies density of 62% in a population estimated at 198 million, placing Nigeria well above the African average of around 16% as indicated by McKinsey.
In September there were c.207, 000 new internet subscriptions. The mobile network operators rarely provide uninterrupted network services, and as such subscribers opt for dual-SIM mobile phones to remain connected via separate data packages across the different networks.
MTN Nigeria (MTNN) accounted for the largest share (42%) of total subscriptions. We note that it recorded 73,000 new internet subscriptions in September after experiencing a loss of 667,000 in August. Its latest earnings show that both sales and profit before tax grew by 12% y/y in Q3.
Among the mobile network operators, Airtel and MTNN recorded m/m increases in internet subscriptions: 1.4% and 0.1% respectively. Meanwhile, 9Mobile and Globacom posted decreases of -1.8% m/m and -0.5% m/m.
An upward trend in internet subscriptions via mobile network operators creates an opportunity to boost financial inclusion through mobile money services. The latest data on electronic payments released by the National Bureau of Statistics show that mobile payments accounted for 8% of the total volume of electronic payments in Q2 2019.
Internet subscriptions (% chg; m/m)
Sources: Nigerian Communications Commission (NCC); FBNQuest Capital Research
According to the NCC, broadband penetration stands at 33%. However, when compared with mobile telephony, broadband penetration is still low. The FGN targets 76% by 2020. In our opinion this is an ambitious target which can only be attained if significant investment in telecommunications infrastructure is made within the next 6-9 months.
A deepened broadband penetration feeds directly into better internet access and the ripple effect of the latter on the economy attracts immeasurable benefits.