Marginal drop in internet subscriptions

The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 92.4 million in November, representing a y/y contraction of -5.5%. The figure implies density of 50% in a population estimated at 185 million, placing Nigeria well above the African average of around 16% as estimated by McKinsey. MTN emerged again as the leader with a 35% market share, while Globacom and Airtel accounted for 29% and 21% respectively.
The drop in internet subscriptions can be directly linked to the current squeeze on consumers’ pockets. Internet subscribers with multiple subscriptions would likely renew only one agreement with a provider in a bid to manage costs.

In Nigeria mobile data providers remain very competitive in securing new subscribers as well as retaining existing ones. Although MTN emerged as the top internet provider in terms of market share, data speed and network stability on Etisalat have improved in relative terms over the past few months. Meanwhile, Glo is widely known for its variety of internet bundles.

However, in an attempt to improve its data services, we gather that MTN intends to invest at least US$500m to push its 3G coverage to 90% this year. Additionally, the company plans to rollout fibre-network in six cities.

In 2017 the NCC expects to sell the remaining 40MHz in the 2.6GHz spectrum. Eight slots remain, with the reserve price for one slot set at US$16m. Last year MTN acquired six slots of this spectrum. We expect better data speed and network access on the back of these sales.


Marginal drop in internet subscriptions Sources: Nigerian Communications Commission (NCC); FBNQuest Research

The benefits of a fully-functional ICT structure in the country are numerous. It would enhance public awareness and engagement as well as improve health, education, financial services and agriculture. It could therefore boost GDP both directly and indirectly. In Q3 2016 telecommunications contributed 7.9% to total GDP.

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