New Telegraph

NCC: Internet service providers record N53.7bn revenue

Internet Service Providers (ISPs) in the country raked in N53.7 billion as revenue in 2019, New Telegraph has learnt. Industry data released by the Nigerian Communications Commission (NCC) showed that this was 23 per cent higher than N43.8 billion generated by the operators in the preceding year. According to the Commission, this amount was generated by 40 out of 104 active licensed ISPs at the end of 2019. The regulator said these 40 were those who made their revenue figures available. Analysis of the report showed that Spectranet, Vodacom Business Africa, Main One, and IS Internet Solutions were the biggest players in the industry for the year as they accounted for a large chunk of the revenue.

The report revealed that Spectranet generated N11.7 billion, thus accounting for 21.8 per cent of the total revenue while Vodacom Business Africa garnered N11.6 billion as revenue, representing 21.6 per cent of the total figure. MainOne and IS Internet Solutions generated N11.3 billion (21 per cent) and N3.2 billion (6 per cent) respectively.

Conversely, Comternet World Ltd. had the least revenue in 2019, with N1.8 million, representing 0.003 per cent of the total revenue generated by ISPs in 2019. NCC said operating costs for the service providers in the year increased from N25.3 billion in 2018 to 41.1 billion in 2019. This indicates an increase of 62 per cent.

“From the analysis of the submissions made, Vodacom recorded the highest operating cost in 2019, with N11 billion while Spectranet and IS Internet were second and third with N10.9 billion and N2.9 billion respectively. “The three operators together make up 60 per cent of the total operating cost for the 2019 financial year. The lowest in operating costs for the 2019 financial year came from Mobitel Limited with N2.9 million, making 0.007 per cent of the total figure,” NCC stated in the report.

In terms of speed of their services, the telecom regulator said access speed offered by the ISPs ranged from 250 kilobytes per second (kbps) to 95 Gigabytes per second (Gbps). Specifically, it noted that MainOne recorded access speeds of 95.2Gbps, while the most common access speed delivered to subscribers in the category ranged between 1mbps to 620mbps but less than 1GB. “From the analysis of the access speed offered by ISPs, Layer 3 has unlimited access speed while VDT ranged from 512kbps to 425mbps access speed. Operators like Cobranet, IS Internet Solutions, Juniper, CBC EMEA, and Hyperia fall under this group; while KHAL Communications provided access speeds in kbps,” NCC said.

The ISPs play critical roles in providing last-mile connectivity to people across cities, rural communities, and underserved communities and are key to achieving the country’s target of deepening broadband penetration However, there had been a slide in the number of active ISPs present in the market and the scope of services they offer, a situation that has raised serious concerns among industry stakeholders and the regulator.

A director at NCC, Ms. Funlola Akiode, had recently lamented that many of the ISPs, whose licences expired, were not renewing and that even applications for new licences were not forthcoming, thus leading to a steep decline in the number of companies providing internet services. According to her, between 1996 and 2001, over 170 ISPs were licensed to provide internet services to Nigerians, but from 2002 to date, the number of ISPs issued licences has dropped drastically and the number of licence renewal also dropped heavily. As of September this year, the number of active ISPs in the country stood at 136.

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