Mobile network ecosystem
The Nigerian mobile market is considered Africa’s most lucrative. This was also acknowledged in the 2019 Jumia Mobile Report, which noted that Nigeria is Africa’s largest mobile market with accounting for over 172 million mobile subscribers, and a mobile penetration rate of 87% of the population. This figure represented a 6.4% growth increase, compared to 162 million subscribers in 2017.. According to the report, the mobile telecommunications sub-sector contributed 7.4% to the country’s total GDP in 2018, compared to 5.5% in 2017. Also, it estimated that “44% of mobile subscribers in Nigeria are using 3G technology and 4% are using 4G technology as compared to over 18% 4G penetration in South Africa and 16% in Angola. Nigeria’s mobile broadband penetration is forecast to rise to 55% of the population by 2025, with 70% having 3G connectivity and 17% having access to 4G networks.” It forecasts that “Nigeria will contribute 4% of the estimated 700 million new global mobile subscribers”, placing above other African countries as a major contributor to increasing mobile penetration in the world.
The NCC subscribers’ statistics for the month of March 2020 estimated there are 189,282,796 active subscribers in the Nigerian telecommunication industry comprising all Global System for Mobile (GSM) generations ( 188,989,051), Code Division Multiple Access (CDMA) mobile (126,269), fixed wired/wireless ( 107,491), and Voice over IP ( 186,254) with a teledensity of 99.16.
There are four major mobile network providers in Nigeria: MTN, Globacom, Airtel and 9Mobile. The Nigerian Communication Commission (NCC) report for the first quarter of 2020 estimates that the telecommunication sector contributed for 10.88 percent of Nigeria’s Gross Domestic Product (GDP). Several factors account for the growth of the Nigerian telecom industry but the most significant is a population of more than 200 million people. However, penetration rates differ across the country. The National Bureau of Statistics Q4 2017 report estimated that mobile subscription is higher in south-western and North-central states than the in rest of Nigeria. Southwestern states of Lagos, Ogun and Oyo have the highest mobile subscription with Lagos alone accounting for 13.18 percent of subscriptions in the country. The top three states were followed by northern states of Kano and Kaduna accounting for 5.08 percent and 4.57 percent respectively and south-south state of Rivers accounting for 3.76 percent. Bayelsa state in the Niger Delta region (south-south) has the lowest mobile subscription rate of 0.65 percent in Nigeria.
The growth of mobile subscription is attributed to access to cheap smartphones, which has made it easier for many Nigerians to own a device. However, the rural population has lower rates of access and use of mobile phones compared to the urban one. Consequently, it is estimated that about 40 million Nigerians do not have access to telecommunication services and this has an adverse impact on the uptake of mobile phones in the country. This has resulted in a widening digital divide between rural and urban regions of Nigeria, according to an Economic Intelligence report, commissioned by Accenture. Attempts at the expansion of telecommunication services to rural areas have been unsuccessful because of a drop in investments in rural telephony.
While the Nigerian Government is keen to deepen broadband penetration to 30 percent by 2018 which is dependent on mobile networks, ‘regulatory and physical challenges’ are considered impediments to the spread of telecom infrastructure in Nigeria. While Internet speed is high in commercial centres across the country, it is sporadic in rural areas and in some cases, non-existent. For instance, GSMA’s Speedtest Global Index ranking of mobile and fixed broadband speeds of countries around the world for April 2020 ranks Nigeria at 108 for mobile internet speed and 150 for broadband. The 2017 Open Signal Survey of Internet Speed pointed out that Nigeria’s internet is slow because of ‘lack of last-mile infrastructure.’ When measured against the number of Nigerians living in rural areas, estimated at more than 40 million, this has an impact on the uptake of mobile phones across the country.
However, multi-SIMing has become prevalent, with individuals owning multiple SIMs to access telecom networks at different locations across the country. Some Nigerians have different SIMs for different occasions. There are telecom networks that some Nigerians use when travelling to their villages (depending on the part of the country it is located), there are some for better network services in city centres and others for cheap data and tariff plans. 9Mobile is considered to have the most affordable data plan, Airtel is reputed for its quality customer service, MTN for its wide network coverage and Glo for affordable tariff plans. The Nigerian Communication Commission (NCC) has introduced Mobile Number Portability to enable mobile subscribers to switch to another operator while retaining their original phone number. While this initiative was lauded for holding a lot of promise for the quality of the service and its costs, it has been beset by challenges. These include certain requirements that a subscriber can only initiate porting at an operators’ shop; a two-day period of processing for porting and inter-operator rivalry over processing porting of high-value subscribers.
In its bid to enhance expansion of infrastructure, the Nigerian government has encouraged network sharing and outsourcing of tower infrastructures to third parties, yet it is estimated that the country needs about 80,000 towers to meet the needs of rural areas. The tower segment of the telecommunication sector is dominated by IHS Towers, which controls more than 60 percent of the market and Globacom, which manages its own towers.