MTN, the largest telecom operator in the country, saw over 2.8 million subscribers drop from its internet business leaving 67.8 million subscribers in January from 70.6 million subscribers in December. The decline was the most MTN Nigeria has seen since May 2023. 

The drop, however, didn’t affect Airtel and Globacom as both telcos gained subscribers in the same month, according to the latest data from the regulator. Airtel gained the most subscribers in January with 890,935 subscribers joining the network and helping to solidify its position as the second-largest internet service provider with 45.9 million subscribers. Globacom also gained 192,313 subscribers in January. 

Subscriber gains from Airtel and Globacom helped to reduce the impact of MTN’s subscriber decline on the industry. Airtel grew its subscriber base from 45.0 million subscribers to 45.9 million subscribers. Globacom also grew its subscriber base from 43.9 million subscribers to 44.1 million subscribers. 

In December 2023, the NCC directed all the telecom operators in the country to deregister all phone lines without a NIN and those with unverified NINs. A spokesperson for MTN Nigeria told TechCabal that the operator started compliance almost immediately after the directive was issued. The company also made several advertorials regarding the directive which led many subscribers to take steps to update or register their NIN.

The deadline was supposed to have expired on March 29, 2024, however, the NCC has now extended the deadline for the disconnection of unlinked lines to July 31, 2024, per TheCable. 

The telecom operator has had a history of fines with the NCC which it is still trying to put behind it. In 2015, the company was fined $5.2 billion for failing to disconnect customers with unregistered SIM cards. 

MTN Nigeria’s subscription decline dented the overall industry internet figures in January. According to the NCC, the total number of subscribers that dropped off across all networks was 1.84 million leaving operators with 161.5 million subscribers from 163.3 million in December 2023. Aside from MTN Nigeria, 9Mobile continued its nearly nine-year decline with 94,824 subscribers leaving the network in January. 9Mobile now has 3.53 million subscribers. 

It was supposed to be a productive morning finalising a crucial project for a client, but the recent internet disruptions in Nigeria had thrown her entire schedule into disarray. Frustrated, Aisha glanced at her phone, the meagre 1Mbps speed a stark reminder of the nationwide struggle.

Aisha is not alone. Across the country, Nigerians are experiencing severe internet disruption after major cuts to the subsea cable of Nigeria’s major internet service provider, MainOne. Businesses are struggling to complete essential banking transactions, remote workers like Aisha are scrambling for alternative internet solutions, and startups are facing lost revenue and project delays.

“We saw almost a 50% drop in the number of customer sign-ups and customer activities during the period,” Adedeji Olowe, CEO of LendSqr, told  TechCabal. 

For Babatunde Akin-Moses, CEO of Sycamore, a peer-to-peer lending platform, the latest internet outage has made it difficult to disburse loans. Banks reliant on Microsoft Azure for critical services faced delays in disbursing loans, as the cloud platform was also affected. Similarly, borrowers were unable to make repayments due to failed debit transactions initiated by the banks.

Other founders who spoke to TechCabal claim that the internet outages have led to project delays and have affected both internal and external communications. 

“We identified tasks that can be completed offline and focused on them, allowing for some level of continued productivity,” Dennis Mary, CEO and founder of Yuki, a web3 startup, told TechCabal.

“I was unable to access the LMS platform for my company’s training,” said Ire, a growth marketer who had tried completing an online course. 

A return to normalcy?

Per Bloomberg, the broken subsea cable is expected to take weeks or months to fix. Ghana’s communication regulator also estimates that repairs would take at least five weeks to complete. 

However, MTN, which holds the largest market share of Nigeria’s telecom market and is the most affected by the outages, has been proactive in taming the outage. The mobile network provider said it is teaming up with ACE and the West Africa undersea cable systems (WACS) to send a dedicated vessel to repair the affected cables. Since then,  TechCabal can confirm that its network service has slightly improved. 

In a message to its customers on Monday, MTN said that it was working towards full restoration of its services. “Please accept our heartfelt apologies for glitches you may still be experiencing with a few services and be assured that work is ongoing towards full restoration,” MTN’s text to its customers read.

While the MTN network has been severely affected, people who spoke to TechCabal said that network reception on Glo—which runs a different submarine cable along the west coast of Africa between Nigeria and the UK—and Airtel have been okay. Several others have explored alternative internet service providers like Tizeti, FiberOne, and Elon Musk’s satellite-based Starlink to hedge against the bad network. 

“I have tried using VPN, but the result was the same, I just had to go to a coworking space,” Shadrach, a web developer told TechCabal.

Over 1.4 million kilometres of these cables are spread across the earth’s oceans, with France, the US, and Japan being the major suppliers. According to data from Submarine Networks, Egypt has the most subsea cables landing in the continent, with 15. This is followed closely by South Africa and Djibouti, with 11, while Nigeria, Cameroon, and Kenya have six each.

Although the scale of the incident was unprecedented in Africa, cable cuts are relatively common. Around 100 of them happen on an annual basis, on average. Most service providers try to avoid a single point of failure by spreading their network capacity over multiple cables as a backup, which is why you don’t often hear of them. The most common cause of cable faults is human activities. However, MainOne ruled out human activity as the cause of the internet disruption in Africa and suggested it was caused by “some form of seismic activity on the seabed.”

Estimates vary over when full service will be restored. Ghana’s National Communications Authority (NCA) said complete repairs could take up to five weeks. 

Some internet users in Nigeria observed that some Google services, like YouTube, remained accessible during the outage. Mobile network Globacom also announced that it was unaffected by the disruption. Meanwhile, the Nigerian Communications Commission (NCC) disclosed that internet services are now at 90% capacity.

In South Africa, four undersea cables went offline at once. The load-shedding challenge combined with the internet outage has made Starlink an appealing alternative to South African customers as it doesn’t use terrestrial or undersea backhaul infrastructure.

While the productivity and financial losses due to the outage may be unquantifiable at the moment, the silver lining may be that it lays bare the importance of building a more robust internet infrastructure on the African continent. 

The number of 4G sites deployed by MTN Nigeria grew 2.7%, said Karl Toriola, the company’s CEO, during an investor call on Monday. That infrastructure expansion increased 4G usage among its customers from 79.1% to 81.5%. 

The number of MTN’s 5G sites saw the most growth rising from 588 to 2,106 sites and pushing 5G penetration to 11.3% from 3.1%. 

Airtel, another major telco, deployed its 5G networks in four cities, including Lagos and Abeokuta and is currently testing the network in Oshogbo. 

Telcos pour billions into infrastructure 

MTN Nigeria and Airtel Africa spent a combined ₦613 billion to expand their 4G and 5G networks by the end of 2022, regulatory filings from both companies show. 

MTN spent N504.33 billion on its network rollout, while Airtel invested N108.79 billion in the same period. Smartphone vendors also responded by increasing shipments of mostly 4G and 5G enabled devices, with data from Canalys showing a 12% growth in smartphone shipments to Africa in 2023. 

As of January 2024, TECNO leads the smartphone vendor market with 26.03%, followed by a sister brand, Infinix, with 20.88%. Samsung is in third place with 11.43%, while Apple is in fourth place with 9.66% of the market.

Growing infrastructure drives usage

By December 2023, 1.04% of internet subscribers in Nigeria used 5G. 4G users also grew to 31.33%, data from the Nigerian Communications Commission (NCC) showed. 

There were only 2.18 million 3G subscriptions in December 2023, while 2G usage, which still accounts for more than half of mobile internet subscriptions (57.84%), also declined.

The growth in 4G and 5G subscriptions happened despite supply chain disruptions and inflationary pressures that raised the prices of smartphones by 30%, data from GSMA showed. In response to those pressures, telecom companies partnered with asset financing companies and smartphone manufacturers to offer flexible financing options. 

Airtel’s partnership with iTel allows customers to buy a range of well-priced smartphones. 

“These deals are helping subscribers acquire 4G/5G devices and routers,” Sam Adeoye, Airtel Nigeria’s head of public relations, added. 

There’s a rising demand for smartphone financing given rising inflation in Nigeria, said Aisha Hussaini, founder of Keza Africa, a device financing startup. 

“Even people who would not have opted for device financing are now choosing it because of the naira devaluation,” Hussaini said.  

After seeing a 1.4% revenue decline within nine months in the connectivity business, Airtel Africa is pushing to correct this trend by entering into infrastructure expansion collaborations with companies like IHS Towers and investing in the 2Africa cable network system. 

The deal with IHS Towers allows Airtel Africa, through its subsidiary Airtel Nigeria, to take 3,950 tenancies over the next five years. Airtel Africa also extended the term of its existing tenancies covering approximately 6,000 tenancies until December 2031. The agreement includes 2,500 collocations in addition to 5G amendments and build-to-suit sites to be owned and operated by IHS Nigeria.  

Taking tenancy at a tower site is part of the strategies telecom operators use to curtail or reduce the cost of operating the business. Also, telcos that own tower sites often deal with tower companies like IHS or American Tower Company to lease and manage them. For example, MTN Nigeria is the biggest client IHS has. 

“Airtel Nigeria, as well as Airtel Africa we serve in other markets in Africa, has been a long-term partner of IHS, and I am delighted that we continue to strengthen our collaboration to help facilitate mobile connectivity in our largest market, supporting our customers in rolling out new sites throughout Nigeria,” said Sam Darwish, chairman and CEO, IHS Towers. 

The telco has also launched Telesonic Limited, a subsidiary that will use Airtel’s ground fibre assets and submarine cable systems to meet the growing demand for wholesale data in Africa. The subsidiary will offer comprehensive terrestrial fibre and submarine cable solutions. 

Apart from managing Airtel’s extensive fibre network (75,000km of terrestrial fibre) across the continent, Telesonic has also invested in Meta’s 2Africa submarine cable system. 2Africa is one of the largest submarine cables interconnecting 33 countries in Africa, the Middle East, and Europe. The 45,000km cable was landed in Accra, Ghana and Lagos, Nigeria this January by the Bayobab Group, marking the third and fourth in a series of six landings from the 2Africa subsea cable system. 

2Africa’s successful landing in Lagos brings the number of submarine cables to eight that have so far landed in Nigeria. 

“No doubt, Africa is experiencing a digital revolution, with surging demand for data centres across various sectors, especially by the continent’s growing youth population. With robust and scalable infrastructure, we aim to bridge the digital divide and unlock opportunities for innovation and economic growth. Our investment signifies not just a technological advancement but also a catalyst for progress, connecting people and ideas across borders,” said Segun Ogunsanya, Group CEO, Airtel Africa. 

Airtel is also concluding plans to break ground on its mega data centre, known as Nxtra, in Lagos, Nigeria in March. The facility will be designed to host high-density racks and integrate the latest practice construction to achieve a 1.3 power usage effectiveness (PUE). The data centre which will go live in mid-2025 will also deliver 34 megawatts of total power, making it the first of its kind in Nigeria. Airtel told TechCabal that the data centre will be industry-agnostic, hence any company from any sector can host their data in the facility. 

If the naira continues its downward spiral, many infrastructure projects, including 5G rollout across the country, will be stalled. Mafab Communications, which won one of the 5G licences in 2021,  is currently pushing to launch its 5G network later this year. However, progress in deploying infrastructure from scratch has been stalled by the foreign exchange crisis in Nigeria. Telecom equipment is mostly imported into the country, hence they are subject to currency fluctuations. Although MTN and Airtel have already launched their 5G networks, experts say they still require massive investments in infrastructure to make the service go around the country and to provide quality service. 

The FX crisis has affected every operator, but smaller players are the most hit, said Tony Emoekpere, president of the Association of Telecommunications Companies of Nigeria (ATCON). 

MTN Nigeria, Airtel, and Globacom are the dominant players in the industry. Last week, Airtel’s financial report showed a 1.4% decline in revenue to $3.86 billion from $3.91 billion posted in the comparable period in 2023. 9Mobile, which is the fourth largest operator, has seen its data subscription revenue significantly depleted as subscribers continue to exit its network. The data subscription figures on 9Mobile stand at 3.81 million as of September 2023, representing a 127% decline from a peak of 17.1 million subscribers recorded in April 2016. 

The challenges will also impact the 70% broadband penetration target set by Bosun Tijani, Nigeria’s minister of communication, innovation, and digital economy. As of November 2023, broadband penetration stood at 41.87%, representing a 14.2% decline from March 2023, when the figures hit a peak of 48.28%. Aside from missing a 50% penetration target for 2023, the industry is about 28% adrift of the 70% target in 2025. 

The telecom industry has also struggled to raise capital and keep up with peak GDP contributions. In 2022, investments in telecoms declined by more than 50% from $753.04 million in 2021 to $399.9 million in 2022. The industry’s GDP contribution dropped by 17.3% to 13.5% in Q3 2023 from 16.06% in Q2 2023. 

“It is what it is, the telecom industry is bleeding. As things stand, investors are unwilling to put in money because the economics do not make sense,” said Gbenga Adebayo, president of the Association of Licensed Telecommunications Operators of Nigeria (ALTON).  

Why diesel price is rising in Nigeria

Diesel is very critical to the power consumption needs of operators in the telecom industry, especially the base stations. The price of diesel has fluctuated within the range of N900 to N1200 in recent times. However, TechCabal found that the price moved between N1200 and N1350 at Enyo and AP filling stations, respectively. The price movement happened between Saturday, February 3 and Monday, February 5. 

Mokolade Ashafa, a filling station manager, attributed the price increase to the difficulty marketers face accessing the product from the depot. Diesel prices rose from ₦288.09 per litre in January 2023 to ₦1,126.69 per litre in December 2023, data from the National Bureau of Statistics showed. 

Nevertheless, most of the power costs are not borne directly by telcos like MTN and Airtel. The base stations of most operators are outsourced to infrastructure companies such as IHS and American Tower Company (ATC). The infrastructure companies then shoulder the responsibility of providing 24/7 electricity to the base stations. These companies use a mix of diesel and renewable sources to power the base stations. A change in diesel prices automatically affects infrastructure companies’ costs. Costs are transferred to the telcos, who must then adjust consumer prices. 

Telecommunication companies spent about ₦429.43 billion on fueling base stations representing an increase of 34.57% from the ₦319.11 billion spent in 2022, as per a Punch report. 

However, telcos cannot increase prices independently without the Nigerian Communications Commission’s approval. The price of internet data was recently increased by 10% by telcos like MTN Nigeria. But telecom stakeholders say it has taken the regulator so long to approve an upward price review that is globally competitive and one which assures investors of return on investments.   

Beyond regulators, the telecom operators also contend with consumer advocacy groups. The industry was dragged to court by the National Association of Telecom Consumers of Nigeria (NATCON) over the 5% data and airtime tariff increase approved by Ali Isa Pantami, former minister of communications and digital economy. The case is still in court and restricts the operators from implementing the 5% data, airtime hike, said Adeolu Ogunbanjo, president of NATCON. 

Ogunbanjo said what the association is trying to avoid is a situation where subscribers are saddled with extra pressure on their income, hence the government needs to find a way to address issues like multiple taxation and wild disparity in Right of Way charges the operators are facing.

The agreement follows efforts initiated by the Nigerian Communications Commission (NCC) at the behest of Glo. In January, Glo faced the threat of disconnection by MTN Nigeria and was given 21 days by the NCC to settle its debt or risk seeing its 61.5 million subscribers blocked from calling MTN lines.

Glo’s interconnection fees debt grew over the year because it often paid substantially less than the bill it racked up. There have been multiple threats from MTN and Airtel Nigeria to disconnect Glo over the years, with MTN disconnecting Glo for five days in 2019. 

The recent disconnection process began in November 2022 due to an accumulated debt owed to MTN Nigeria by Glo, and MTN sought NCC’s approval for a disconnection, eventually receiving it in December 2023. 

A source at NCC said the new executive vice chairman plans to do things differently by ensuring all telecom operators comply with the market rules. 

*This is a developing story

The adjustment caused a five-month delay in sharing the data. Aminu Maida, Executive Vice Chairman of the Nigerian Communications Commission (NCC), said the adjustments are appropriate to maintain the integrity of the telecom industry‘s data.

The adjusted figures show Nigeria still has some way to go in reaching a recent broadband penetration target of 70% by 2025 set in the Strategic Blueprint presented by Bosun Tijani, minister of communications, innovation, and digital economy. Broadband penetration refers to the amount of the internet access market that high-speed or broadband internet has captured. 

The NCC said the previous calculation of the industry statistics was based on a 2017 projection of 190 million people. To align with international best practices, the NCC used the NPC’s 2022 projection of Nigeria’s population at 216.7 million to calculate the latest figures for September. 

The adjusted calculation also led to a decline in Nigeria’s teledensity from 115.63% to 102.30% in September. Teledensity measures telephone penetration in a population. 

However, active voice subscriptions witnessed a slight growth of 0.63% from 220.3 million to 221.7 million as of September 2023. Internet subscriptions grew slowly by 0.71%, from 159 million in August to 160.1 million in September.

On Saturday, Karl Toriola, CEO of MTN Nigeria, said that the rising cost of smartphones and other connectivity devices is primarily responsible for the continued digital inclusion gap in the country.

Starlink, the satellite internet service owned by Elon Musk’s Space X, is slashing its price in Nigeria and expanding its distribution channels to acquire more users. The company is offering a 20% discount on its kit from ₦378,000 ($378) to ₦299,000 ($299). It has also partnered with Jumia, Nigeria’s most popular e-commerce platform. Per Wall Street Journal, while Starlink set sales targets of $12 billion in 2022, it only brought in $1.4 billion.

Starlink, which expanded into Africa in 2023 with big plans to provide fast-speed internet to remote locations has faced more roadblocks than expected. The service which has a 100Mbps download speed is about ten times higher than the average download speed for mobile internet in sub-Saharan Africa where broadband penetration is still low, making it a great solution for the African market. Despite its potential for the continent, Starlink’s adoption across Africa has been faced with a number of challenges like affordability and regulatory concerns.

In its first stop, Nigeria, the company has failed to capture a significant part of the market owing to its affordability problem with the kit costing significantly more than the average Nigerian can afford. About 70% of Nigerians suffer from poor internet speed, with the average quality of internet speed falling to 10.9% in 2023. However, the cost of Starlink rules it out as a solution for the majority of the population, even with a 20% discount, as the monthly salary of the average Nigerian is still below ₦124,000  ($124).

Affordability isn’t its only barrier to its adoption as Starlink has also struggled with more regulatory roadblocks than expected in Africa. While it is not yet officially present in countries like South Africa as the government has banned the import, sale and usage of the service, thousands of South Africans have found ways to bypass regulatory hurdles and still access it. Similarly, Zimbabwe and Botswana have warned against the service, stating that the service is yet to complete the requisite licensing despite planning to launch in the country in Q3 2023.  In August, the Senegalese government arrested five people for selling Starlink terminals without the required licence or authorisation. 

Some African countries like Rwanda on the other hand, have deployed the service to facilitate learning. In July, the country’s ICT Minister, Paula Ingabire, announced the launch of Starlink in 50 schools to provide students with access to more learning opportunities on the internet. This number is expected to increase to 500 by the end of 2024.

The company has announced a partnership with e-commerce giant Jumia for the sales and distribution deal of the kits in Africa. Jumia is a strategic partner for Starlink as it is one of the most popular e-commerce platforms in the country with over 3.1 million active quarterly users. Jumia will exclusively distribute Starlink in Africa and its Chief Commercial Officer(CCO), Hisham El Gabry, believes that they have the needed experience in navigating the African retail and merchandise landscape.

“The plan is to start selling through our sites and agents in Nigeria this month, and then Kenya,” he shared with Bloomberg.

At the moment, the only countries in Africa where it is licensed to operate are Nigeria, Mauritius, Mozambique, Sierra Leone, Rwanda, and Kenya. It is set to be rolled out in more countries before the end of the year.

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It took Wuraola Onyeku about three weeks to realise that her partner was logged in to her WhatsApp account on his desktop. The first time she opened her WhatsApp after a night out with her friends to find herself in the middle of a conversation she couldn’t remember typing, she blamed the alcohol. The second time it happened, she blamed her poor memory on fatigue as she didn’t drink any alcohol. 

“I was always getting responses to messages I couldn’t remember sending, and at a point, I strongly believed I had a health condition that made me forget things easily,” she shared. 

Two years ago, WhatsApp made the news as thousands of accounts were compromised in a worldwide hack incident facilitated by WhatsApp calls. In recent months, WhatsApp hacks have resurfaced as hackers are discovering more insidious ways to infiltrate the app’s security. Tons of people have complained about their accounts being hacked and the Nigerian Communications Commission(NCC) has put out an advisory for users to be more careful with the platform as it has become the “main” target for hackers.

There are several new methods that hackers are deploying to gain access to accounts. Some of the most popular methods include malware embedded in spam messages and links, as well as a call-forwarding hack. The victims can range from close friends and family to random people they find in WhatsApp groups. 

According to Adesola, a cybersecurity expert, the call-forwarding method involves calling victims and tricking them into calling certain man-machine interface (MMI) codes, which instruct your devices to perform specific actions.

“They essentially want to forward calls from the victim’s number to their own number,  so when they try to re-register the WhatsApp account using their target’s phone number, they choose the option of a phone call to verify the phone number instead of choosing the OTP option,” he shared.

Other methods are more straightforward, like in the case of Onyeku. In April 2023, WhatsApp rolled out a new feature that allows users to operate one account on four devices. This feature means that malicious people can use your phone to scan a code on their laptops and will be logged into your account. Unlike other methods where the main owners are logged out, this allows you to use the account simultaneously.

According to Onyeku, she didn’t think about the possibility of someone else sending it because it didn’t feel like a hack as she was still logged in to her account, and she lived alone.

“I would have never suspected that someone else was using my account with me, much less my partner if he hadn’t confessed to it,” she shared.

One evening, Ganiu Oloruntade, a reporter living in Lagos received a call from a strange number asking if he belonged to a particular WhatsApp group which he confirmed. They further asked him to call out a certain number, which he refused to do. Seconds after he ended the call, he realised that he couldn’t access his WhatsApp account. In the two hours it took for him to recover his account, he kept receiving calls from friends informing him that he was distributing a broadcast message and requesting money.

“It was easier to recover it because I had the 2-factor authentication set up, but they already sent messages to all the groups I was a part of and received money from some people. I think they pick numbers from WhatsApp groups and call you to get your voice and send you a code,” he said.

Meta has been committed to expanding WhatsApp from an intimate messaging platform to a wider messaging app with “communities” and “channels” features, which puts more users at risk as it exposes phone numbers to a larger group. While the 2-FA can protect users from some hacks, there are more advanced ones that it fails to guard against. According to Adesola, there have been a lot of vulnerabilities on the platform in the past years and some still exist.

“When discovered, WhatsApp patches the vulnerability and sends a prompt to users to update their WhatsApp so that the changes they have made to curb the vulnerability can be effected,” he shared.

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