The number of Nigerians with access to high-speed internet slowed down last May as users face an economic downturn amid the covid pandemic.
The tepid rate at which infrastructure is being rolled out coupled with the 4-month ban on new SIM registrations are some of the reasons. At this pace, it means Nigeria is drifting far from the 2023 target to achieve 90 percent broadband penetration
Broadband penetration refers to the amount of the Internet access market that high speed or broadband Internet has captured in Nigeria
Data from the Nigerian Communications Commission (NCC) showed that the 39 percent is a 14 months drop as the last time the market was at that low was in March 2020. It also represents about a 1 percent loss from the previous month.
Broadband penetration in Nigeria has been in a freefall since November 2020, despite optimism by the minister of communications and Digital Economy, Ali Isa Pantami that the industry is doing well. But with broadband at 39.5 percent Nigeria is now over 50 percent adrift of a recent penetration target announced by the minister.
Earlier in June, Pantami had said the target is to grow broadband penetration to 90 percent in terms of population and 70 percent rate in terms of the total landmass in the next two years. The minister’s confidence came from a peak of 45 percent achieved in December 2020, the same month the ministry declared a ban on SIM card sales and registration in an effort to ensure that more Nigerians got their National Identification Number (NIN) within a two weeks deadline.
The plan failed, the deadline was extended four times before the government realised it would not make any meaningful progress in shutting down telcos major source of revenue. But by April when the ban on SIM registration was lifted the telecom industry had lost over 15 million subscribers and continued to lose a month after.
Growing broadband penetration is mainly a function of deploying broadband infrastructure in areas where there is not much coverage. There are over 150 communities in Nigeria without internet connectivity, according to the NCC.
Much of the fibre rollout has been carried out by mobile network operators. MTN, Airtel, and Globacom account for 64 percent (24,436km) of fibre cables across the country. The total fibre distance covered is 54,000km currently.
Broadband penetration is also the ability of the people to afford it. Firstly, network operators would want to deploy infrastructure to areas they know that people can pay for the services. This is because deploying broadband infrastructure is a costly endeavour. Currently, urban areas like Lagos have benefited most from fibre cables laid across the country, due to cost consideration.
Fibre rollout in other states is not happening at the speed expected. Funke Opeke, CEO of MainOne told BusinessDay in June that investments in infrastructure have remained below 1 percent because of various challenges. One of them is the high fees charged by states for Right of Way. Despite efforts by the Minister to get states to reduce the fees, 29 states still charge fees above the N140 recommended by the National Executive Council (NEC). Whereas in Kenya, operators are not charged fees. This is responsible for Kenya achieving a broadband penetration of 85 percent.
There also inflationary factors affecting the affordability of internet services. Inflation dropped to 17.93 percent in May from 18.12 percent in the previous month while food inflation hovers at 22.28 percent from 22.72 percent in April, meaning that millions of Nigerians still have to prioritise their food basket before secondary necessities like data bundles. It also means they would need to work longer hours to afford the cheapest data.
Inflation in a few Nigerian states is above the national average of 17.93. Kogi State, for example, recorded the highest inflation of 25.13 percent on a year-on-year basis. However, inflation in states like Delta, Katsina, and Imo are lower at 14.85 percent, 15.69 percent, and 15.52 percent respectively. But the capacity of the citizens to afford the cheapest data comes down to what is chasing their income and the poor shape of the national economy is not helping.
MTN said recently it is committed to a three-year plan in which it would deploy about N640 billion to two critical areas: broadband acceleration in line with the national broadband plan and the connections of the remaining locations in Nigeria that do not have access to modern telecommunication services or rural connectivity.
How quickly MTN’s intervention would turn the negative tide in the industry depends on the speed it is moving. As it stands, the industry’s half-year is not looking very exciting.