Nigeria’s internet service provider (ISP) market has witnessed its sharpest contraction in recent years, losing over 18,000 subscribers and seeing 18 companies exit the space between Q3 2024 and Q1 2025, according to the Nigerian Communications Commission (NCC). This steep decline is driven by rising operational costs and a consumer shift towards cheaper, more accessible mobile data services. Major providers like Spectranet and Starlink recorded subscriber losses of 2.08% and 9% respectively, while FibreOne saw a staggering 42.4% dip. The total number of fixed broadband users fell to 289,369 from 307,946.
Analysts say the affordability and convenience of mobile data have rendered fixed broadband unattractive for most Nigerian households, especially outside major cities. Despite being better suited for high-demand services like telemedicine, e-learning, and remote work, fixed internet services face barriers such as hardware costs, limited reach, and recurring bills. Starlink, which once held promise for transforming connectivity in remote areas, has also suffered from sluggish demand due to high subscription and equipment fees, mirroring its struggles in other African markets.
The decline is also evident in the dwindling number of active ISPs. By Q1 2025, only 127 out of 234 licensed ISPs had active users, compared to 106 out of 252 in Q4 2023. Smaller local providers are increasingly unable to compete with telcos or weather economic headwinds. Industry experts like Diseye Isoun warn that ISPs are wrongly seen as peripheral players, despite being vital for reliable internet in schools, hospitals, and businesses. He calls for a policy-led approach, similar to Brazil’s Telebras model, to ensure broadband access in strategic sectors through partnerships with private ISPs.
Despite the dominance of mobile broadband, experts stress that ISPs remain critical to Nigeria’s digital infrastructure. Their ability to provide high-capacity, stable connections is essential for institutional users. However, the lack of coherent policy support, limited funding through programs like the USPF, and the absence of structured investment plans continue to hamper ISP growth. Experts now advocate for consolidation, including mergers, IPOs, and public funding mechanisms, to help the sector survive. Without strategic intervention, Nigeria risks over-dependence on mobile networks and a digital divide that could stifle innovation and development.