Kenya Revenue Authority monitors tech sector

Nigeria’s internet user base continues to expand despite rising costs and connectivity challenges. Recent data indicates a growing reliance on internet access for various aspects of daily life.

According to the Nigerian Communications Commission (NCC), internet penetration reached 53% in January. This increase is attributed to the expansion of network infrastructure by Airtel and MTN, including new sites, fiber optic cables, and 5G technology. However, the median smartphone price increased from $50 to $54 in 2024, and network quality remains inconsistent across different areas.

Internet Penetration and User Behavior

More Nigerians are prioritizing internet connectivity, favoring providers that offer the most reliable service. This trend is notable given the current economic pressures, suggesting that internet access has become essential for work, education, side businesses, and entertainment. Individuals are willing to make sacrifices in other areas to maintain their internet connection.

Opportunities for Service Providers

This shift in user behavior creates opportunities for various players in the telecommunications sector. While mobile network operators remain central, fiber- and satellite-based internet providers can benefit by ensuring stable service in areas where people live, work, and commute.

Market Challenges and Switching Costs

High switching costs currently limit market competition. SIM registration regulations, difficulties with number portability, device compatibility issues, and customer mistrust stemming from past outages or billing problems often lead users to remain with less-than-ideal networks. A negative experience with a telecom operator can result in permanent customer loss.

Future Trends and Operator Strategies

As data and airtime consumption increases as a portion of monthly income, operators who continue to invest in coverage, capacity, and performance are likely to benefit from the deepening internet habits and rising average spend per user in Nigeria.