A Massive Drop in Internet Subscription in Nigeria

The latest data from the national bureau of statistics show that Nigeria’s active internet subscribers dropped by a whopping 6% to 111.9 million in Q1 2021, from the 154.3 million in Q4, 2020.

 Pooling data from the Nigerian Communications Commission (NCC), Intelligence by Techpoint also reveals that Nigeria lost 15.5 million subscribers between December 2020 and March 2021.

In December 2020, the Nigerian government banned the sale and registration of new SIM cards and introduced a December 30 deadline for people to link their National Identity Number (NIN) with their SIM cards. In retrospect, it is not clear if the government considered the risks of COVID-19, as that move coincided with a sharp increase in positive cases in the following months.

 MTN and Airtel’s financial reports for Q4 2020 and Q1 2021 revealed that this policy really hurt many telecom companies. Both companies registered a reduction in subscriber numbers during the period in question. 

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In November 2020, Nigeria had up to 207.9 million mobile subscribers, but the country has witnessed a downward spiral since then, leading to the loss of over 15 million subscribers. By comparison, Nigeria gained 15.7 million subscribers between March 2019 and March 2020. From March 2018 to 2019, subscribers grew by a whopping 23 million. 

Commentators believe that NCC’s subscriber numbers could perhaps be termed inflated, considering the fact that, the data doesn’t account for people holding multiple SIMs and using different devices. Consequently, the actual number of mobile subscribers could be much lower than what the NCC’s records show. Though the regulator had plans to regularise the data in the past, nothing much came of them until the NIN order.

The subscriber decline in such a short time continues to raise questions about the size of Nigeria’s addressable Internet market, as most of the lost subscribers, are Internet users. 

While the data wars of 2019 and 2020 were particularly thrilling to observe, Nigerian telecom companies were on a losing streak for three months between December 2020 and March 2021. 

MTN was the hardest hit, with 3.8 million Internet subscribers lost. This means about 70% of them were Internet subscribers. Historically a formidable competitor to MTN in the data market, Airtel lost about 3.5 million Internet users. This is about 67% of the subscribers it lost in total. 

Glo fared way better than the first two, losing 1.3 million Internet subscribers, about 68% of the total mobile users it lost.

SIM ban or not, 9mobile has struggled with the loss of its subscribers in recent years. However, it lost the least number of Internet subscribers at a respectable 701,000. 

However, this number gets weird considering that it lost just 132k mobile subscribers in all.

The mandatory push into the virtual landscape due to the COVID-19 pandemic has further exposed the infrastructure gaps within the country’s technology sector.

Nigerian students and youths are among the highest users of internet services within the country. Broadband penetration currently stands at 42.1%. The FG IS  targetting 76% this year. Anambra state recently waived right-of-way (RoW) fees for telecom operators. This is part of the state’s efforts to drive broadband expansion.

Understandably, 29 out of 36 states in the country are yet to implement the FGN’s proposed N145/m Right of way (RoW) fee. The states that have applied the N145/m RoW rate are Kaduna, Katsina, Plateau, Ekiti, Kwara, Anambra and Imo.

Many states continue to charge relatively high RoW fees. Industry sources suggest that in Lagos it costs telecom companies as high as N1,500 per linear metre of fibre in RoW charges. The absence of a unified RoW fee across the country continuously stalls the advancement of broadband fibre networks.

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 In Nigeria, mobile network operators roll out the majority of fibre cables across the country, with MTN, Airtel and Glo laying 64% (34,436km) of the total fibre distance (54,000km) currently covered. Peer countries like Kenya charge no RoW fees to its operators. Kenya has been able to achieve a broadband penetration of 85%. The reduction in RoW charges will largely incentivise the expansion of fibre networks by telecom operators in Nigeria.

The national broadband plan seeks to deliver data download speeds across Nigeria at a minimum of 25Mbps in urban areas, and 10Mbps in rural areas with effective coverage available to at least 90 per cent of the population by 2025 at a maximum price of N390 per 1GB of data.  These targets seem ambitious. However, they can be achieved with well-targeted investments into the sector.

For Nigeria to overcome the challenge of the sharp drop in Internet penetration, it’s important for state governments to review their charges for the right of way (RoW) in a way that will encourage investors given the current economic realities.