Data Wars 2022: Nigeria’s mobile Internet space needs more competition

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January 24, 2023
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7 mins read

So I was skimming through my Google alerts when something caught my attention. Some major media companies published that Nigeria hit 222 million mobile phone subscribers in 2022. Wait. What!? How many are we in Nigeria? The short answer is no one knows. But that wasn’t my business, my first thoughts were twofold: 1. That was really fast from the Nigerian Communications Commission (NCC). 2. Maybe it’s time for another Data Wars story. 

You see, in the few years I’ve spent monitoring industry data from the NCC, you usually had to wait till February to see the data from December, and it goes on like that till the year’s end. So I was pleasantly surprised to see the information out already. Why is the data important, you ask? 

Well, it shows how fast Nigeria’s digital economy is growing. In Q3 2022 alone, the ICT sector contributed almost ₦8 trillion ($15.2 billion, 15.35%) to Nigeria’s GDP. In that same quarter, Nigeria’s cash cow, crude oil, contributed ~₦3 trillion ($6.5 billion, 5.6%).

The Nigerian telecommunications industry is the main driver of this growth. When you take the activities of thousands of Internet-enabled businesses into account, you feel that the Internet space will be crucial to Nigeria’s growth in the next few years.

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Competition is essential to innovation in any industry. Hence, my Data Wars article shows which companies are driving Nigeria’s Internet forward and how much competition you’d find today. 

I quickly drafted some questions for an online survey and got 47 responses in a few hours. It revealed some interesting findings, which I’d touch on later in this article. 

First thing first, how many Internet users are there in Nigeria?

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Advanced technologies – Paving the way in innovation and convenience

Per the NCC, Nigeria ended 2022 with 154 million Internet subscribers. Private data body, Statista, drops the number by almost half to 84 million. 

My issue with the regulator’s industry data is it doesn’t show you the number of unique users. I, alone, account for three of those 154 million subscriptions. Since Statista gathers data from confidential surveys, I had to look elsewhere to verify their numbers.  

NCC vs Statista Internet stats

To do this, I went over MTN and Airtel’s financial records for Q3 2022 and tried to make an educated guess about the number of Internet users in Nigeria. I couldn’t get the records for Glo and 9mobile since both are still very private companies. Maths purists, please forgive any loopholes you might find in the next few paragraphs.

The MTN proof

As of Q3 2023, MTN said it had 38 million subscribers. In the same period, the NCC said the telecom giant had 64 million subscribers, about 42% of the market share. If you use that percentage for MTN’s reported number, you can place the number of unique subscribers in Nigeria at 90 million. 

The Airtel proof

Also, in the same period, Airtel Nigeria said it had 20.6 million subscribers, compared to the NCC’s figure of 41 million (27% of the market share). To clarify, the NCC’s figure is not wrong; it just doesn’t account for people who access the Internet with multiple smartphones and SIM cards. 

When you run the same basic maths for Airtel, the number of Internet subscribers stands at 76 million. 

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From my back-of-the-envelope calculations on Airtel, MTN, and the NCC’s figures, Statista’s record of 84 million Internet users in Nigeria seems closer to being accurate. Nonetheless, the NCC’s number — 154 million — gives you the sheer number of Internet activity in Nigeria as of 2022.

With four mobile network operators in Nigeria, almost half of the respondents believe Nigeria’s mobile Internet space is only slightly competitive. While 14% are unsure what the landscape looks like, 23% of the respondents believe there’s almost no competition. 

On the extreme end, 9% of survey respondents believe there’s healthy competition in the country’s Internet space. However, 7% of them believe it’s a monopoly for some reason. What does the data say? 

Who is leading Nigeria’s data wars?

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If you haven’t figured it out, MTN dominates the Internet space with a 43% market share as of December 2022. Per the NCC, Glo comes second with 28%, Airtel at 27%, and 9mobile a distant fourth with just 3%. 

MTN has been leading this war for the past ten years, and Glo grew its customer base to squeak past Airtel in second place over the same timeframe.

In our small survey sample, MTN was the undisputed leader, as 68% of respondents chose them as their primary Internet service provider. Airtel takes second place in the survey with 34%, and Glo and 9mobile fall far behind at 13.6% and 4.5%, respectively.

The worst story so far has been that of 9mobile, formerly Etisalat. Between 2014 and 2015, Etisalat’s aggressive marketing for data services seemed to have paid off as it witnessed a shared growth that peaked at over 15 million subscribers.

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Sadly, the company has been bleeding subscribers (both voice and data) since 2015 following Nigeria’s plunging forex reserves. Our survey also shows the extent of this loss. While respondents used at least one of the other three telcos as their sole Internet service provider, those who chose 9mobile always paired it with another network.

Recall that UAE-based Etisalat pulled out of Nigeria just one year later, in 2017, when it couldn’t keep up with business difficulties such as dollar shortages that have plagued the country since.

The company didn’t fully complete its transition to 9mobile until June 2020, when it appointed its first CEO. The appointment brought some growth in the next few months, but it began to spiral down again by November of the same year.

It now appears that three players make up the main competition for mobile Internet in Nigeria, with two of them trying to catch up with the first.

The true test of competition

Telco subscriber base vs Internet subscribers

I used an MTN SIM card for calls and texts in my first feature phone, but when I started actively browsing the Internet, my choices fell between the other three telcos considering my location at the time. 

Voice subscriptions are still the main source of revenue for African telcos, but most of these companies tout data as crucial to their future growth strategy. But how many voice subscribers are they converting to Internet users? 

Per data from the NCC, MTN converts about 73% of its mobile subscribers to Internet users. Glo follows closely behind at 71%, and Airtel rounds up the top three at 68%. Again, things don’t look so good for 9mobile, which converts just 34% of its users to Internet users.

However, the NCC’s data seems inflated once more. MTN’s own record shows 51% of its mobile users are data subscribers. Per Airtel, 44% of its customer base are Internet users. 

Following the data revolution

While Glo and 9mobile’s records are out of reach for now, MTN and Airtel allow us to see how much each company makes from data. 

In MTN’s Q3 report, data accounted for 40% (₦201 billion, $441 million) of its total revenue (₦506 billion, $1.1 billion). For context, Nigerian fintechs raised $639.5 million in 2022. That’s just 45% higher than what MTN made from data in one quarter. 

The signs are also promising for MTN as it shows data revenue is slowly catching up with voice revenues. The latter contributed 49% to the company’s turnover in that quarter. 

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Simple Colorful Pie Chart Infographics 8

Airtel’s report for the same period shows its data revolution is making a bit more progress. At $228 million, data contributed 42% to the company’s overall revenue of $540 million. Voice is only able to edge further at 48%.

Overall, both telcos made more money from data in one quarter ($669 million) than Nigerian fintechs raised in the entirety of 2022. Apples and oranges, I know, but this is just to provide context for the big part these companies will play in Nigeria’s digital revolution. 

What’s driving this growth? 

Photo by Joel Arsene Noumonvi via Iwaria

Without looking too far, you’d observe that Nigeria’s major telcos have similar prices for monthly, weekly, and daily data. Also, there’s a weird fixation with giving bonus data at the monthly level that can be, sometimes, confusing for users. Have you experienced telcos deducting your main data before touching bonus? Let us know in the comments. 

The pricing competition has made data more affordable today than it was five years ago. However, it’s still expensive for most people considering the average income level of most Nigerians and the ideal amount they should be paying for data. I just had to stop myself from going deeper. You can find the details in this article. 

Suggested read: Report: Nigeria has the least affordable Internet in the world

Moreso, advancements in technology are also making Internet services more accessible in more locations. Airtel says 99% of its Nigerian sites are now on the 4G network, while MTN reports having 77% 4G population coverage. 

These companies are the only major telcos to have acquired a 5G licence. MTN began its rollout in 2022, and Airtel is set to grapple for a piece of the pie in 2023. 

What we’ve learnt so far

The data on Nigeria’s Internet space helps us gauge the growth of Nigeria’s digital economy. MTN has been leading the race for over 10 years, but it needs stiffer competition so there can be more innovation. 

The survey contains other data points and is still open to date.

Journalist feasting on tech, business, and policies. Looking to chat? Catch up with me, @eruskkii, on Twitter or send a mail to emmanuel@techpoint.africa
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