Johnson Salako: Highspeed Broadband Penetration in Nigeria

Johnson Salako serves as CEO of MPS Technologies Ltd, a company launched with the mission of building the most reliable secured network in Africa. Across the continent today, MPS Technologies Ltd provides businesses with a complete integrated solution, enabling business owners to transform their enterprise and accelerate growth. The company delivers unrivalled and seamless connectivity, relieving business owners of the burden of managing their IT infrastructure and enabling them to focus on running and growing their business.

This article will look at the increased integration of highspeed broadband across Nigeria, exploring the potential of digitization to help businesses grow across the country – and, in the process, boosting Nigeria’s GDP.

In July 2022, broadband penetration reached 44.5% in Nigeria, according to a report from the Nigerian Communications Commission. By contrast, broadband usage was at 40.9% in the country in February 2022.

Nigeria’s rapidly increasing broadband penetration rate is a hopeful sign for achieving the national target of 70% in 2025. Ranking as the largest mobile telecommunications market in the whole of the African continent, Nigeria’s rapid development started in 2001 with the successful auction of Digital Mobile Licenses.

In 2022, MTN made history as the first telecom company to launch a 5G network in the country. Nevertheless, in Nigeria today, internet services are largely delivered via 2G, 3G and 4G mobile telecommunications networks.

Between December 2021 and September 2022, the number of internet service providers in Nigeria increased from 187 to 225. These figures are based on data published by the Nigerian Communications Commission, which indicates that 38 more companies have been licensed, including Starlink, Elon Musk’s company, which was granted a licensed in May of 2022.

As of July 2022, Airtel, MTN, 9mobile, Globacom and other Nigerian mobile network operators had a collective total of 151 million active internet subscriptions. Alongside voice and other services, the industry’s biggest players are also offering internet services.

The Nigerian National Broadband Plan 2022-2025 was created with the intention of achieving 25mbps and 10mbps internet speeds for urban and rural regions respectively. In addition, under the plan, consumers would pay no more than the equivalent of 1% of the minimum wage for 1GB of data.

In Lagos, Google recently installed ‘Equiano’, a subsea cable. The Nigerian Government partnered with Google as part of its broadband policy drive. The internet cable will have a significant impact on connectivity, according to Google, providing faster internet speeds at a reduced rate and improving user experiences overall.

In January 2020, the Nigerian Communications Commission announced that it would be investing N265 billion, the equivalent of $732 million at the time, into revamping the country’s fiber optic network infrastructure, including the deployment of an additional 30,000 km of fiber optic cable by 2025. However, the public-private partnership has been hampered by red tape. A spokesman for Telcos explained that broadband penetration would be affected by the implementation of a proposed excise duty on telecommunications services, which had previously been suspended by the Ministry of Communications and Digital Economy.

A World Bank report published in 2009 revealed a direct correlation between broadband penetration and GDP, with the report suggesting that for every 10% increase in broadband coverage in developed countries, the GDP would grow by an average of 1%. In addition, a 2019 study carried out by the International Telecommunications Union revealed that a 10% rise in mobile broadband penetration equated to a 2% increase in GDP in low-income countries and a 2.5% increase of GDP per capita.

Between 2019 and 2022, the percentage of 4G coverage across the country grew from 23% to 77.52%. Analysts indicate that although 5G was introduced to Nigeria in 2022, 4G remains the dominant force in mobile technology, supporting the vast majority of internet connectivity in a trend that is only predicted to increase in years to come.

However, in terms of density of coverage, the benefits of 5G are vast. While 4G facilitates connection of around 1 million devices per 500 square kilometers, 5G could support the same number of devices in an area of a single kilometer squared. Mobile operators are predicted to spend somewhere in the region of $1.1 trillion globally between 2020 and 2025, with 80% of that figure investing in 5G networks.

Although an uptick in 3G and 4G coverage has facilitated increased adoption of broadband across Nigeria, end-user adoption is yet to meet expectations, in large part due to socio-economic constraints. As part of its efforts to increase broadband penetration, the Nigerian Federal Government joined forces with SpaceX, Elon Musk’s internet satellite company, with SpaceX pledging to provide the country with broadband connectivity ahead of the 2025 deadline stipulated in the National Broadband Plan.

The introduction of fifth-generation technology is predicted to culminate in many benefits and opportunities across Nigeria, engendering smart living and accelerated growth across the country when fully deployed. Experts anticipate that widespread adoption of 5G across the nation will usher in a wide array of business opportunities, helping enterprise to expand their frontiers at speed with operational ease.