Nigeria’s Internet access revenue to reach $4.4b in 2021

Internet access revenues in Nigeria will rise by a Compound Annual Growth Rate (CAGR) of 16.2 per cent to reach $4.4 billion in 2021.

Nigeria’s Internet access revenue to reach $4.4b in 2021

A recent report by PricewaterhouseCoopers (PwC) has revealed that Internet access revenues in Nigeria will rise by a Compound Annual Growth Rate (CAGR) of 16.2 per cent to reach $4.4 billion in 2021.

The report, Global Entertainment and Media Outlook 2017-2021, disclosed that mobile Internet revenues will increase by a CAGR of 16.8 per cent to $4.3 billion, accounting for 96.6 per cent of total Internet access revenues.

Besides, the report noted that Nigeria would be the world’s fastest-growing Entertainment & Media (E&M) market over the period under review.

According to it, Nigeria with a 12.1 per cent CAGR albeit strongly influenced by surging spending on mobile Internet access, and will be the world’s fastest-growing E&M market over the coming five years while the slowest-growing will be Japan, growing at a 1.7 per cent CAGR.

Consumers in mature markets such as North America, and Europe, and wealthier Asia-Pacific markets spend a lot more than $500 per capita annually on entertainment and media; growth rates are relatively slow in these areas. In contrast, less developed economies feature much lower per capita spending and faster growth albeit from a very low base less than $50 a year in many cases.

It stated that South Africa’s MTN Group is planning to hold an initial public offer for its Nigerian subsidiary, which is the market leader in the fixed and mobile sectors.

The report said the sale is expected to take place this year, subject to market conditions, adding that Nigeria’s economy slowed sharply in 2015 and 2016, primarily due to global fall in crude oil prices but is forecast to return to slow growth in 2017.

“MTN paid N19 billion ($60 million) for a 2.6 GHz licence in June 2016; it was the only company, which secured approval to take part in the auction. MTN will use the frequencies to expand its LTE network. The majority of mobile subscriptions were to 2G networks at the end of September 2016, though 3G is taking share from 3G. The speed of LTE adoption will depend on rollout and pricing,” it stated.

It also revealed that mobile Internet subscriptions will increase to 85.1 million over the forecast period, a penetration rate of 40.1 per cent. The penetration of mobile Internet connections on high-speed services will rise by 29.6 percentage points to nearly 35 per cent in 2021.

Fixed broadband is not widely available and where it is, the cost is often prohibitive. The majority of subscriptions are via fixed-wireless networks, with LTE-based services replacing WiMAX as the leading fixed-wireless technology. Fixed broadband penetration is very low and will rise from 2.2 per cent in 2016 to 3.3 per cent in 2021 with 89.3 per cent of subscriptions on low-speed services at the end of 2021.

Recall that in September 2016, the NCC announced it would begin the selection process for infrastructure companies to build and operate open-access fibre broadband networks in five zones. The project will be funded by government subsidies. The first two concessions for Lagos State and the North Central Zone, were awarded in January 2015. The NCC first published a consultation paper on the open-access network in November 2013.

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