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FCT, Lagos, 3 other states gain 8.96M internet subscribers in 2020

Lagos, Kano, Oyo, FCT, and Ogun state recorded a total increase of 8.96 million new internet subscribers between 2019 and 2020.

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Lagos, Kano, Oyo, FCT, and Ogun state recorded a total increase of 8.96 million new internet subscribers between 2019 and 2020. This is according to the Q4 2020 telecoms report by the National Bureau of Statistics (NBS).

The report also showed that the number of internet subscribers increased from 126.1 million as of Q4 2019 to 154.3 million in Q4 2020, representing a 22.38% increase.

These numbers support the realities of 2020 when corporations were forced to adopt remote working due to the COVID-19 induced lockdown and companies striving to be COVID-19 compliant even after the lockdown.  

It is worthy of note that during the year, the largest increase (10.12 million subscribers) in the number of internet subscribers was recorded between Q4 2019 and Q1 2020. Information gathered from NCC showed that the highest increase of 3.18% was seen between February 2020 and March 2020 which can be easily traced to the effect of the lockdown. 

READ: MTN maintains lead as Airtel loses subscribers via porting

States with the largest increase in internet subscription

Although all states of the federation recorded an increase in internet subscribers during the year, some states, however, outperformed others. Below are the states that recorded the highest increase in the number of internet subscribers between Q4 2019 and Q4 2020. 

First – Lagos: 2.28 million 

Second  Kano: 2.18 million 

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Third – Oyo: 1.66 million 

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Fourth – FCT: 1.57 million 

Fifth – Ogun: 9.01 million 

READ: Nigeria remains Facebook’s biggest market in Africa

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A key feature of these states is the fact that they are the biggest commercial cities in Nigeria and are believed to receive the highest migrants in the country. These states, specifically Lagos, Oyo, and Ogun are also among the least poor states in Nigeria according to the National Bureau of Statistics 2019 poverty and inequality report.  

All these are contributing factors to the huge increase seen in internet subscriptions in the states. These states also boast of having the largest internet subscriber base in the country as of Q4 2020.

A quarter-on-quarter comparison of Q3 2020 and Q4 2020 however showed that number of internet subscribers in the two largest cities dropped. The number of internet subscribers in Lagos State dropped from 19 million as of Q3 2020 to 18.9 million at the end of Q4 2020 while Kano State recorded a drop from 10.3 million to 9.6 million in the review period.

READ: MTN acquires additional 800 MHz spectrum

States with the lowest increase in internet subscription

Despite the large increase in internet subscriptions seen in some states, some however only recorded a marginal increase in the number of internet subscriptions in 2020.

First – Bayelsa: 182,053  

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Second – Ebonyi: 207,803 

Third – Ekiti: 220,628 

Fourth – Abia: 316,519 

Fifth – Cross River: 318,616 

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A cursory look at these states shows that some of them are considered poor states and economic activities besides agriculture is low in the regions.

The NBS 2019 Poverty and Inequality publication reported Bayelsa with a poverty headcount rate of 22.61%, Ebonyi with 79.76%, Ekiti with 28.04%, Abia with 30.67%, and Cross River with 36.29%.  

Apart from the low increase in internet subscriptions in these states, these states are among the states with the lowest number of subscribers in the country. 

READ: MTN wins data war, as 1.88 million subscribers dump Glo, 9mobile 

What this means

The report shows that the states that recorded the highest increase in internet subscribers in 2020 are popularly known for their commercial value, which can be traced to the increased usage of the internet in their businesses due to the lockdown. 

  • The less-commercial states in the country recorded the least increase in numbers which could be due to the high poverty rate, low education, and low income in the regions. Also, due to the nature of businesses popular in the states, there was not excess need for internet usage. 
  • Meanwhile, the recent decline in the number of subscribers in the country is attributable to the policy on NIN-SIM card registration by the federal government.

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Nairametrics Research team tracks, collates, maintains and manages a rich database of macro-economic and micro-economic data from Nigeria and Africa. Our analysts share some of the data collated on Nairametrics, using formats such as docs, tables and charts etc. The team also publishes research based analysis as articles on a regular basis.

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Debt Securities

MTN invests N121 billion in fixed deposits, treasury bills, etc

MTN Nigeria invested a whopping N121.5 billion in bonds, treasury bills and foreign currency deposits in 2020.

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Nigeria’s largest telecommunications company, MTN Nigeria invested a whopping N121.5 billion in bonds, treasury bills and foreign currency deposits in 2020. This compares to just N9 billion in 2019 suggesting the GSM giant had challenges deploying the capital raised during the year.

MTN raised N143.96 billion in several syndicated facilities during the year which was to be utilized for its network expansion plans. However, the Covid-19 induced lockdowns affected capex activities forcing most companies to freeze spending on anything that is capital intensive. Effective Interest Rates for most of the loans obtained by MTN range between 3.5% and N5.8% per annum.

From the breakdown seen by Nairametrics, MTN invested N93 billion in naira denominated fixed deposits, equivalent of N19 billion in US dollar deposits and another N34.8 billion in treasury bills. The total amount invested earned MTN about N15.84 billion in income which it used to offset its finance cost of over N129 billion.

Why it matters

Interest rates for risk-free government securities fell drastically in 2020 as investment outlets dried up locally. This triggered a massive influx of money into the stock market helping it to close above 50%, one of the best performing in the world last year.

  • For companies like MTN with a significant cash hoard, treasury operations are a significant part of the activities of its finance department.
  • The investments in risk-free treasury bills despite the negative real return (when interest rate is adjusted for inflation) suggest corporates will rather fix their money in treasury bills than leave it idle in commercial banks.
  • It also suggests corporates like MTN are more favourably disposed to lending to the government despite Nigeria’s ballooning public debt and its attendant risk to its credit ratings.
  • Despite the investments, MTN still closed the year with about N275 billion cash in its balance sheet.

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Business News

NNPC, SEEPCO sign gas development agreement for domestic market

The execution of the deal is to help reduce gas flaring in the country and a show of NNPC’s commitment to facilitating the country’s transformation into a gas-powered economy.

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The Nigerian National Petroleum Corporation (NNPC) and an indigenous oil exploration and production firm, Sterling Exploration and Energy Production Company (SEEPCO), both partners in the Oil Mining Lease (OML) 143, have signed a Gas Development Agreement (GDA).

The execution of the deal is to help reduce gas flaring in the country and a show of NNPC’s commitment to facilitating the country’s transformation into a gas-powered economy.

According to a tweet post from NNPC on their official Twitter handle, the agreement between both parties was signed at NNPC’s head office, NNPC towers, on Thursday, April 22, 2021.

The statement says that this latest milestone provides the terms for the development of OML 143 Gas, providing gas for the domestic market which aligns perfectly with the Federal Government’s National Gas Expansion Programme (NGEP).

What this means

The execution of this project will not only help to support the Federal Government’s effort in reducing gas flaring by monetizing it but will also play its part in the government’s effort in the expansion of gas utilization in the country as a cleaner, cheaper and more reliable alternative form of energy.

This is coming at a time when the Federal Government is shifting focus to gas utilization as an alternative source of energy especially with the increase in the retail pump price of petrol. This is one of the various initiatives by the government as represented by the NNPC towards providing alternative sources of energy.

 

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