Nigerian telecoms industry shows improving fundamentals

Last week, the Nigerian Communications Commission (NCC) released a flurry of July data for the telecommunications industry. The data published were broadly positive reinforcing our stance on the telecommunications industry being the bright spot of the weak economy. According to the data published by the NCC, the number of mobile subscribers grew 0.5% m/m and 8.2% y/y to 174.7 million subscribers while Internet subscribers grew 0.3% m/m and 18.3% y/y to 122.7 million subscribers.

Furthermore, broadband subscription grew 1.2% m/m and 33.6% y/y to 64.4 million subscriptions in July while broadband penetration expanded to 33.7% in July 2019 from 33.3% in June 2019 and 25.3% in July 2018.

Breaking down the mobile subscribers’ numbers, MTNN remained the biggest player by subscribers with a subscriber base of 65.3 million (37.4%) while Airtel Nigeria overtook GLO NG as the second-largest player by subscriber base with 46.8 million subscribers (26.8%) compared to GLO NG’s 46.7 million subscribers (26.7%). Meanwhile, 9mobile extended its 4-month streak of losing subscribers with its subscriber base now at 15.7 million (9.0%) from 16.4 million at the start of the year.

The reasons for the strengthening fundamentals in the telecommunications industry are not far-fetched with broadband penetration still at 33.7% and 4G coverage below 30.0%. Operators within the industry have invested heavily in network infrastructure across the country in a bid to spread 3G/4G band with coverage. Furthermore, the increasing use of smartphones aided by a young population demographic has helped raise the number of internets and mobile subscribers.

An increasingly digitized economy and rapid urbanization remain some of the key factors influencing industry growth. Going forward, we expect sustained growth across the telecoms industry KPIs at least in the medium term. Thus, we expect this would feed positively into the performance of key listed telecoms operators.



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