Steady Rise in Internet Subscription; Stood At 138.3m in Q1 2020

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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.

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.

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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