The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 93.5 million in August; representing a y/y contraction of -1.8%. The figure also represented density of 51% in a population estimated at 185 million, placing Nigeria well above the African average of around 16% as estimated by McKinsey. (A national census is due this year but likely to be delayed due to budget pressures.) MTN enjoyed the leading, 35% market share while Globacom and Airtel accounted for 29% and 20% respectively.
The NCC recently revealed that broadband penetration has risen from 10% recorded in 2014 to about 21% as at September. The FGN has targets of 30% by 2018 and 76% in 2020.
We recall that MTN was the only successful bidder at the NCC’s 2.6 GHz spectrum auction earlier this year. It secured 14 slots of this spectrum.
On the back of this transaction, MTN formally launched its 4G LTE service last week. This should assist in optimising wireless 4G broadband and high-speed browsing across the country. We expect this launch to push broadband penetration closer to the 30% target set by the FGN.
The inflation data for August show that communications prices rose by 5.5% y/y compared with 5.4% recorded in July.
Improved broadband penetration has been cited as one of several tools capable of navigating Nigeria out of its economic downturn. If implemented effectively, we could see a significant boost to the speed of business transactions, to education and to healthcare delivery.