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Nigeria’s vision to roll out broadband services to all four corners of the country risks being derailed. That’s because the number of active internet service providers (ISPs) in Nigeria has fallen from 252 in May 2024 to 242 in July 2024.

Although new licences to ISPs continue to be issued, this drop-off may be attributed to those who’ve chosen not to renew their existing licences. The Nigerian Communications Commission (NCC) used figures to suggest that this is nothing new, with up to 568 inactive licensed ISPs in Nigeria as of March 2022. Fears are mounting that this decline could stifle competition in the marketplace, stunting the progress of the last-mile delivery of broadband to rural and underserved areas.

Earlier this year, the 2024 Worldwide Broadband Speed Report was published, showcasing average broadband speeds. Nigeria ranked as the seventh-fastest Sub-Saharan African nation for average download speeds, clocking in at 27.62Mbps. It represents a modest year-on-year improvement, moving up one place in the global rankings from 133^rd to 132^nd.

A typical download speed of 27.62Mbps should be sufficient to stream content on-demand, thereby driving Nigeria’s digital entertainment sector. We’re not just talking about streaming TV shows and Nollywood films. We’re also talking about the fast-growing world of iGaming. One of the fastest-growing niches in the iGaming scene is live dealer game shows. They have taken the industry by storm in burgeoning regulated iGaming markets like Canada and the U.S. These TV-style games require no skill or strategy, which is their undoubted appeal to casual players. They can tune into live dealer casino streams on any device, with these gameshows – often wheel-based – hosted 24/7 by various charismatic hosts.

Why is there a growing number of inactive ISPs in Nigeria?

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There are several issues that ISPs must overcome in Nigeria. One of the biggest challenges is the dominance of mobile network operators, all of whom provide 4G connectivity to supplement their voice call services. There’s some serious names in the Nigerian mobile marketplace, including Airtel, MTN and Globacom. Both Airtel and MTN launched 5G mobile connectivity last year too, with the former said to have been successful in enticing more enterprise-level clients from ISPs.

It’s also true that many Nigerian ISPs lack the resources to challenge the major mobile network operators. Most of these providers are considered small-and-medium enterprises (SMEs) on the commercial spectrum, so it’s difficult for them to grow and scale their services accordingly.

As of Q1 2024, Nigeria’s top 106 ISPs hold a customer base totalling just 262,206 clients. That’s compared with 163.8 million clients of mobile network operators. According to Swedish telecommunications giant, Ericsson, the transition from 4G to 5G is also happening already which is aiding mobile network operators. It estimates as many as 150 million 5G subscriptions being activated across Sub-Saharan Africa by 2028. These figures help to articulate the size of the task ISPs have on their hands to survive, let alone thrive.

The Nigerian Communications Commission (NCC) has been pressured about the issue from various industry executives. It has acknowledged the drop-off in active ISPs. The NCC’s research department believes data prices have been kept artificially low by mobile network operators due to the increased ISP competition. NCC researchers have subsequently urged regulators to increase the minimum price of mobile data to prevent ISPs from being rendered unnecessary.

Some professionals within the Nigerian broadband industry believe tweaks to licensing and regulatory processes could also prove the difference to encourage more ISPs to enter the market. Jide Awe, founder of Jidaw Systems Limited, said the simplification of licensing and regulatory frameworks would “encourage investment and growth in the sector”.

Awe also called for renewed investment in digital infrastructure projects from the Nigerian government. This includes the creation and expansion of fibre optic networks, levelling the playing field for ISPs and minimising their reliance on leasing infrastructure from the well-established players in the market.

Ultimately, the long-term success and sustainability of the country’s National Broadband Plan requires a joined-up approach involving all stakeholders to ensure a competitive telecommunications marketplace.