Shift in telecoms market as northern states top voice, internet growth charts

Taraba, Niger, Bauchi and Kaduna states saw significant growth in voice and internet subscriptions services in 2021, indicating a gradual pick-up in economic activities in some northern parts of the country. The aforementioned states outperformed others on both the voice and internet growth charts as of December 2021.

Nigeria’s telecommunications and information services sub-sector recorded real GDP growth rates of 7.69 percent in Q1 2021; 5.90 percent in Q2 2021; 10.87 percent in Q3 2021, and 5.31 percent in Q4 2021, leading to an annual real GDP growth rate of 7.28 percent in 2021.

Active voice subscriptions grew by 42 percent in Taraba State in the fourth quarter of 2021 when compared with half-year voice subscriptions in that state. Niger, Bauchi and Kaduna states all recorded double digits growth rates to the tune of 41 percent, 40 percent and 18 percent respectively.

“The north is the next growth market for financial services, e-commerce, e-government and digital marketing. In essence, COVID and insecurity is largely responsible. It is sustainable and may even grow faster over the next few years. Four states that I provide consulting services for have adopted digital transformations for their tax administration and procurement processes. The ratio of internet usage is still low, but there is increasing awareness among the populace.

“There is a steady growth in the use of social media platforms like TikTok and Instagram among young men and women, as well as the introduction and adoption of edutech platforms in most private schools”, says Abdulrauf Aliyu, co-founder & director, Fringe Insight, a Kaduna-based Africa-focused consulting firm.

“It also relates to the growth of e-commerce platforms such as in logistics and delivery services; car hailing apps recently berthed in some northern states, while some firms have adopted remote working policy due to COVID and insecurity. Most businesses are turning to digital marketing”, Aliyu added.

The above development may not be unconnected with the different mouth-watering promos telecoms firms rolled out in 2021 to gain new subscribers and retain the existing ones as fierce competition continuously sweeps through the industry.

To mark its 20th anniversary, Airtel Nigeria launched a N100 million “recharge and blow promo” that allowed customers to win cash, airtime and data. Globacom gave out 500,000 prizes that ranged from luxury cars to household appliances through the “joy unlimited extravaganza promo”. The two firms performed well on the growth charts in both southern and northern parts of the country.

The growth rate in voice subscriptions was 9.9 percent in Kogi, 9.5 percent in FCT, 8.8 percent in Nasarawa, 8.1 percent in Yobe, 7.5 percent in Plateau and 5.2 percent in Imo, which is the only southern state among the top ten states with the highest growth rates in voice subscriptions as of December 2021.

For the entire country, voice subscriptions grew by 4.2 percent from 187.27 million lines in June 2021 to 195.12 million lines as of December 2021.

Active internet subscriptions grew by 1.3 percent nationwide from 139.82 million lines in June 2021 to 141.62 million lines as of December 2021. Northern states dominated the growth chart as Lagos State, Nigeria’s commercial capital, made it among the top ten states with the highest growth rates.

Like voice subscriptions, Taraba, Niger, Bauchi, Kaduna and Kogi states topped the internet subscriptions growth chart as they posted 42 percent, 40 percent, 37 percent, 13 percent and 9.4 percent growth rates respectively.

Others are Yobe and FCT, 7 percent each; Nasarawa, 6 percent; Plateau, 4 percent and Lagos, 2 percent.

In both services – voice and internet subscriptions, the worst-performing states were Katsina and Zamfara where voice subscriptions declined by 12 percent and 16 percent, while internet subscriptions fell by 21 percent and 28 percent respectively. The two states had telecommunications services disrupted last year as a result of the war on insurgency and banditry.

Following the above, the market share of the telecommunications industry increased in the northern part of the country. Voice subscriptions’ market share rose from 45 percent in June 2021 to 47 percent by December of the same year. On the contrary, its market share which was 55 percent in the southern part of the country as of June 2021 fell to 53 percent by December 2021.

Economic analysts have attributed the increase in market share in the north to work at home policies of many companies and the fact that the subscribers in the southern part are exploring other options of getting internet services.

“Nigerians, particularly those in the southern part who work from home now realise the internet services of most telcos are not as reliable as initially anticipated. They are now exploring other alternatives. Meanwhile, telecommunications services are still developing in the north. While their southern counterparts are exploring other options, northerners are just embracing the technology”, says Moses Ojo, a Lagos-based economic analyst.

Source: NBS, BRIU

“Most of the companies are in southern Nigeria and every Nigerian works here. The work at home policy allows Nigerians to relocate to their states of origin and work from there. Northerners whose places of work are in the south could go back to their respective states given the work from home policies being implemented by some companies in Nigeria”, says another analyst who pleaded anonymity.

Read also: Telecom sector sees first voice subscriber decline in 5 years

When analysed by operators, MTN Nigeria’s voice subscriptions grew in eight states the highest being Niger, Taraba and Bauchi. Globacom’s voice subscriptions grew in 31 states during the period the highest being Yobe, Kano and Borno states. Airtel Nigeria’s voice subscriptions grew in 34 states the highest being Yobe, Ekiti, Gombe, Taraba and Jigawa states, while 9mobile’s voice subscriptions grew in 15 states the highest being Oyo, Imo, Kano, Ebonyi and Adamawa states.

Source: NBS, BRIU

Internet subscriptions market share in the northern part increased from 45 percent at half-year 2021 to 46.3 percent as at the end of the fourth quarter of 2021. On the contrary, internet subscriptions’ market share in the southern part fell to 54 percent in December 2021 down from 55 percent at half-year 2021.

Airtel Nigeria’s telecommunications services are now concentrated in the northern part of the country. According to our analysis, 51 percent of Airtel Nigeria’s voice subscriptions market, and 50 percent of internet market activities are in the northern part of the country.

In the voice subscriptions services, 52 percent of MTN Nigeria’s market, 58 percent of Globacom’s and 56 percent of 9Mobile’s are in the southern part of the country.

Similarly, 53 percent of MTN Nigeria’s internet services, 58 percent of Globacom’s, and 62 percent of 9Mobile’s are in the south while the balance is in the north.