The gradual but steady depletion in the numbers of Nigeria’s internet service providers (ISPs) may derail the country’s vision to roll out broadband services to every nook and cranny of the country and deny the citizens the advantages of internet connections, including opportunity for e-learning, e-health, digital jobs and many others.
This factor, alongside others such as the demise of infrastructure companies (InfraCos), lack of commitment by some of the various government agencies tasked with driving the National Broadband Plan (NBP 2020-2025), delays in project approvals, asphyxiating tax regime and others that are potentially going to derail the ambitious targets of the plan.
As of September last year, the most recent data available indicated that Nigeria’s broadband penetration rate had declined to 41.56per cent. However, there was a slight increase in broadband connections in April 2024, with the penetration rate reaching 43.5per cent in March 2024. The country aims to achieve a 70 per cent broadband penetration target this year under the NBP 2020-2025.
While no official reason has been given by the regulator, the Nigerian Communications Commission (NCC), the decline in broadband subscriptions may be linked to the mandatory SIM card verification process, which led to a temporary decline in active subscriptions.
According to industry stats, the number of active internet service providers (ISPs) in Nigeria fell from 252 in May 2024 to 242 in July 2024.
Although new licences to ISPs continue to be issued, this drop-off may be attributed to those who chose not to renew their existing licences because of their inability to compete in the face of stiff competition from mobile network operators (MNOs) whose Unified Access Licence (UAL) empowers them to offer services hitherto offered exclusively by the ISPs.
The demise of operators in the Code Division Multiple Access (CDMA) area such as Starcoms, Visafone and others too might not be unconnected to the issuance of UAL
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According to the World Bank, a 10 per cent increase in broadband penetration can significantly raise the gross domestic product (GDP), especially in low and middle income countries such as Nigeria, support initiatives such as Digital Economy for Africa (DE4A) to promote digital inclusion and financial inclusion which Nigeria’s Communications, Innovation and Digital Economy Minister, Dr Bosun Tijani, said is dear to his heart.
Fears are mounting that this decline could stifle competition in the marketplace, stunting the progress of the last-mile delivery of broadband to rural and underserved areas.
According to the Worldwide Broadband Speed Report which showcased average broadband speeds, Nigeria ranked seventh-fastest Sub-Saharan African with an average download speed of 27.62Mbps. It represents a modest year-on-year improvement, moving up one place in the global rankings from 133rd to 132nd. The NBP envisages 25 Mbps in urban areas and 10Mbps in rural areas with effective coverage available to at least 90per cent of the population this year at a price not more than N390 per 1GB of data, that is, two per cent of median income or one per cent of minimum wage.
A typical download speed of 27.62Mbps should be sufficient to stream content on-demand, thereby driving Nigeria’s digital entertainment sector.
The biggest challenge ISPs face is the dominance of MNOs, all of whom provide 4G connectivity to supplement their voice call services. Airtel, MTN and Globacom are big players in the data services space. MTN, Mafab and Airtel have since launched 5G mobile connectivity with the former said to have been successful in enticing more enterprise-level clients from ISPs.
Many ISPs lack the resources to challenge the major mobile network operators. Most of these providers are considered small-and-medium enterprises (SMEs) on the commercial spectrum, so it’s difficult for them to grow and scale their services accordingly.
As of Q1 2024, Nigeria’s top 106 ISPs hold a customer base totalling just 262,206 clients. That’s compared with 163.8 million customers of MNOs.
Swedish telecom giant, Ericsson, believes the transition from 4G to 5G is also happening already which is aiding MNOs. The company sees as many as 150 million 5G subscriptions being activated across sub-Saharan Africa by 2028. These figures help to articulate the size of the task ISPs have on their hands to survive, let alone thrive.
Tijani said President Bola Tinubu realises the place of ICT in the building a virile and prosperous nation. According to him, to address these challenges and accelerate broadband penetration, the Federal Government is driving initiatives such as 90,000km fibre optic expansion, designed to improve broadband penetration across Nigeria; Project 774 initiative that ensures that every local government secretariat in Nigeria benefits from high-speed connectivity; the Universal Access, a game-changing initiative targeted at connecting over 20 million Nigerians who currently have no access to digital services; the National Broadband Alliance of Nigeria (NBAN) that drives universal high quality broadband access; and The 3 Million Technical Talent programme ( 3MTT), among others..
While these initiatives hold promises, their successful implementation will be crucial in bridging the digital divide and achieving the 90per cent broadband penetration target. Overcoming infrastructure hurdles, reducing costs, and promoting digital literacy will be essential to unlocking the full potential of broadband connectivity in Nigeria.
