Resolution of MTN/NCC Feud Holds Key to Broadband Access

The resolution of the deadlock between the Nigeria Communications Commission (NCC) and MTN Nigeria, the mobile operator, is key to driving local broadband penetration, according to First Bank of Nigeria (FBN) Capital, a local market watcher.

It also noted that the recent acquisition of Visafone by MTN could drive broadband penetration towards the official 30 percent target by 2018.

“However, this depends on the resolution of the dispute between the operator and the regulator, which imposed a fine of US$5,9 billion equivalent (since reduced) on MTN,” FBN Capital stated.

The NCC last year slapped the fine, since reduced to $3,9 billion, on MTN Nigeria after the mobile network failed to disconnect 5 million subscriber identity module (SIM) cards in a timely manner.

Recently, a Lagos court adjourned MTN’s legal challenge to March 18 to give the parties a chance to settle the matter.

Meanwhile, FBN Capital noted data released by the NCC, the industry regulator, showed that internet subscriptions grew by 27 percent year-on-year to 97 million in December.

This represents a density of 57 percent, placing Nigeria well above the African average of around 16 percent as estimated by McKinsey.

The most recent data on broadband penetration available in the public domain is still very low, at 10 percent.

The deployment of broadband technology is key as it improves productivity in businesses by maximizing their reach to labour pools, and access to raw materials as well as consumers.