Mobile internet usage in first quarter of 2016
mobile phone and telecommunication towers against blue sky
The provision of internet data services through mobile phones and CDMA contributed N736 billion to Nigeria’s GDP in the first quarter of 2016. On the whole, the telecommunications and information services sub sector accounted for 8.6 percent of the nation’s GDP in Q1 2016. That means that the mobile and CDMA internet services alone accounted for 3.3 percent of the Q1 2016 GDP.
Simplistically, mobile internet services are defined as any activity that consumes mobile data (excluding SMS, MMS and cellular voice calls). At 5 kobo per kilobyte (5k/kb) which is the rate that most telecoms firms charge, this will amount to 13,831 terabytes used by Nigerians in the first quarter of 2016. Assuming we maintain this rate, online activities in the nation will gulp about 55,324 terabytes by December 2016.
In Nigeria, mobile internet services are provided by GSM and CDMA service providers. Therefore, when apportioned among the service providers, N265.79 billion of the N736 billion was generated by MTN Nigeria; N211.40 billion by Globacom; N136.70 billion by Airtel Nigeria; N120.66 billion by Etisalat Nigeria while other internet service providers(CDMA) produced N1.12 billion worth of economic activities in that quarter.
With 92.3 million internet subscribers (GSM) as at March 2016, Nigeria’s internet penetration now stands at 48 percent which is lower than 50 percent its level as at December 2015. Nigeria’s mobile internet penetration is also below the global mobile internet penetration which Statista puts at 56.1 percent for 2016. Our analysis shows that only 13 states of the federation have their internet penetration above the national level. These states are FCT Abuja, 116 percent; Ogun, 108 percent; Lagos, 101 percent; Nassarawa, 86 percent and Edo, 74 percent. Others are Kwara, 66 percent; Oyo,63 percent; Niger, 59 percent; Delta,57 percent; Abia,54 percent; Rivers, 53 percent; Kaduna, 51 percent and Osun, 49 percent. The states with the lowest penetration are Bauchi, 24 percent; Borno,23 percent; Yobe,21 percent; Zamfara, 19 percent and Jigawa, 15 percent.
Furthermore, MTN Nigeria still maintains its leadership position in the market as it controls 36 percent of the mobile internet market. Nevertheless, its leadership position is seriously being challenged by other mobile data service providers, a development that is evident in the quarterly data. Between December 2015 and March 2016, Airtel Nigeria grew its mobile internet subscribers by 1.9 percent which translated to additional 319,229 new subscribers within the period. Airtel now controls 19 percent share of the mobile internet market in Nigeria. Etisalat Nigeria added 53,068 new subscribers and that enabled it to control 17 percent of the mobile internet market by Q1 2016. Globacom Nigeria recorded the highest growth of 5.8 percent and that translated to 1.45 million additional mobile internet users. Consequently, Glo now controls 29 percent of the mobile internet market.
Whereas Globacom, Airtel and Etisalat collectively added 1.82 million new users to their networks, MTN Nigeria lost 6.57 million internet users within the period. This leaves a difference of 4.75 million internet subscribers. In other words, the internet subscribers which MTN lost but were not absorbed by Globacom, Airtel and Etisalat combined were 4.75 million Nigerians. One of the likely explanations is that 4.75 million Nigerians stopped using internet mobile services in Q1 2016. Other possibility is that the owners of those telephone lines refused to complete their registration status and fearing another penalty, MTN disconnected their lines from its network.
Geopolitical preferences for internet service providers
Individual preference for internet data service providers varies across states and geopolitical zones in Nigeria. In the North Central, Globacom and MTN are the two most dominant mobile data service providers. Globacom has 7.03 million mobile internet subscribers compared with MTN’s 5.42 million, Etisalat’s 3.23 million and Airtel’s 2.40 million internet subscribers. This places Globacom as the market leader in the North Central geopolitical zone with 38.83 percent of the market share. It is closely followed by MTN, 29.97 percent; Etisalat, 17.85 percent and Airtel, 13.25 percent. FCT Abuja, Kogi, Nassarawa and Niger are the states dominated by Globacom whereas MTN dominates Kwara and Plateau states.
In the North East, the preference is for MTN and Airtel both of which control 37.37 percent and 28.47 percent of the mobile internet market respectively. This means the former has 2.78 million and while the latter has 2.11 million internet subscribers. Globacom occupies the third position with 1.6 million users while Etisalat is in the fourth position with 929,781 subscribers.
In the North West, MTN and Globacom stand the most preferred mobile data service providers. They control 39.08 percent and 27.17 percent of the market share respectively. MTN dominates all the states in this region except Kebbi which is Globacom’s stronghold.
In the South East, 44.71 percent of that market is controlled by MTN while the regional preferences for the other networks are about the same level. While Globacom controls 19.52 percent, Airtel and Etisalat control 18.11 percent and 17.61 percent of the mobile internet data market respectively. Uniquely, MTN has the highest number of subscribers in all the five states in that region.
Similarly, MTN and Globacom control 37.67 percent and 27.95 percent of the South-South mobile data market while the preferences for Airtel and Etisalat networks stand at 19.76 percent and 14.47 percent respectively. In that region, MTN has the highest number of subscribers in all the states except Edo which is dominated by Globacom.
The trend in South West is not different from other geopolitical zones in the southern region. From the data MTN has the highest number of subscribers in all the SW states except Oyo where Globacom dominates. Our analysis shows that MTN controls 35.12 percent; Globacom, 28.74 percent; Airtel, 18.07 percent while Etisalat’s market share is 17.73 percent.
Daily spend on internet data services
The average national daily spend on internet data services in Q1 2016 was N42.24 per individual. The topmost five states with the daily internet spend are Abuja, N103; Ogun, N96; Lagos, N89; Nassarawa, N76; and Edo, N66. At the bottom of the table are Bauchi, N21.12; Borno, N20.36; Yobe, N18.67; Zamfara, N16.70 and Jigawa, N13.65.
Source: BRIU, NBS
How many Nigerians are left outside the mobile revolution?
Among the 15 topmost states, there is a gap between those who have active mobile lines and those who access the internet through their mobile phones. In other words, there is huge difference between teledensity- the percentage of the population with access to telephones, and mobile internet penetration-which is the percentage of the population who surf the web using their mobile phones. The gap is most pronounced in Ogun State whereas the least gap exists in Rivers State among the 15 topmost states.
Source: BRIU, NBS
Battle now shifts to internet data bundles
The increasing sales of smartphones especially by Samsung, Apple, Huawei, Lenovo, Xiaomi and other brands by their distributors in Nigeria is one of the driving forces for mobile internet subscription. According to Statista, 15.5 million of smartphones are in use in Nigeria currently and this is expected to reach 21 million units by 2018. In addition, cheaper internet compliant phones have been introduced in recent times by Tecno, Gionee, Infinix and Genesis thereby giving Nigerians who could not afford smartphones the opportunity to conduct some of their economic activities through the internet.
The market is getting more competitive with different sizes of data bundles now available in the market. An average Nigerian can now browse for about 7 days for as low as 50kb. Besides, the bigger data bundles have become cheaper relative to their costs about a year ago.
Another factor is the rising numbers of Nigerians on social media. Millions of Nigerians are on Facebook, 2go, Twitter, Eskimi, g+ and Whatsapp. Besides, so many Nigerian firms presently drive the sales of their products and services through social media. That is not all. Government officials and celebrities have made social media a medium of communicating with their subjects and fans.
Above all, Nigerians are now getting more sophisticated. This is because more Nigerians are now conducting several online activities which include shopping, reading, searching, listening and watching music/movies, emailing and getting socialised through the social media.
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