All company stakeholders will benefit from stricter ESG policies, according to GlobalData

The latest data released by the Nigeria Communications Commission (NCC), the industry regulator, shows internet subscriptions stood at 140 million in October. This represents a year-on-year decline of -8.2%. However, we have noticed an am / m increase of approximately 61,000 subscriptions. The decrease in y / y can be attributed in part to the FGN’s Subscriber Identification Module (SIM) card regulation, which requires that each SIM card be associated with a national identification number (NIN). Based on our channel checks, the stress associated with the NIN-SIM link has led customers to ditch SIM cards from devices that are not their primary source of communication or internet connectivity.

Additionally, over the past year, there has been a noticeable shift towards high-speed fiber internet subscription plans that do not require SIM cards to operate. Residential subdivisions are increasingly turning to this option given the heavy reliance on home internet services due to the continuous approach of working from home.

Among mobile network operators, MTN Nigeria (MTNN) accounted for the largest share (38%) of total subscriptions. We noticed from commission data that in October MTNN saw a 0.1% m / m increase in internet subscriptions. Airtel and Glo recorded m / m increases of 1.6% and 0.7% respectively. Meanwhile, 9mobile recorded an am / m drop of -1.3%.

In addition, the commission’s data shows that outbound porterage activity was highest for 9mobile while Airtel was the main recipient of inbound porterage activity.

MTNN’s latest earnings release shows revenue grew 22.9% year-on-year in the third quarter, compared to the 31.4% year-on-year growth recorded in the second quarter. Strong sales growth was largely driven by a 57.3% year-on-year growth in data revenue, driven by sustained data demand driven by fintech, digital services and in part a downturn effect. based.

The broadband penetration rate is currently 39.8%. Based on the 2020-2025 national broadband plan, the FGN predicts a broadband penetration target of 70% by 2025. In March, Anambra state waived right-of-way charges (RoW ) for telecom operators as part of the state’s efforts to spur broadband expansion. Harmonization of right-of-way (RoW) charges between states and local communities would help boost broadband penetration. The FGN proposed a right-of-way charge of 145 N per linear meter of fiber.

We understand that the NCC plans to auction two 3.5 GHz spectrum license slots this month. The sale of these 3.5 GHz spectrum slots should facilitate the deployment of 5G across the country. The commission revealed that the remaining three slots will be auctioned off over the next two years. The NCC has set the reserve price for 3.5 GHz spectrum at $ 197.4 million. Industry sources suggest that the successful deployment of 5G will result in increased internet data speed at ultra-low latency as well as more reliable and increased network capacity.

Turning to National Bureau of Statistics (NBS) data, capital imports in the telecommunications sector declined -99.7% year-on-year to around $ 342,000 in Q2 ’21. This significant drop in investments in the sector may be linked to the general apathy of investors given the hazy macroeconomic environment triggered by the pandemic as well as the infrastructure deficit in the telecommunications sector, the high cost of services, the low digital literacy, among others.

For Nigeria to become an active member of the current digital transformation within the global village, huge investments in telecommunications infrastructure are needed. Increased broadband penetration directly fuels better Internet access, and the latter’s ripple effect on the economy attracts immeasurable benefits.

According to the latest national accounts, telecommunications posted double-digit growth of 10.9% yoy in the third quarter of 2021. In addition, the latest inflation report shows that communications prices increased by 10.6% y / y in October versus 10.7% y / y recorded in October. the preceding month. The telecommunications segment was already booming and was further boosted by the prevalence of working from home due to the COVID-19 pandemic.


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