Recently, similar to their global counterparts, businesses and individuals in Nigeria have been forced to dance to the unpleasant beat of the COVID-19 outbreak. Notably, businesses in major commercial hubs of the country – Abuja, Lagos and Ogun state – have been forced to scale down their operations amid the recently announced lockdown by the Federal Government. Likewise, schools and religious gatherings have been put on hold.
Similarly, the shut down in economic activities has forced businesses, schools and religious bodies to promptly activate back-up digital transformation plan to ensure business continuity and engagement. More so, individuals and households are also heavily relying on social media and telephone conversations to stay in touch with family members and loved ones.
Consequent on the above, the services of telecommunication companies have become a necessity for businesses, religious organizations and households for connectivity. Before now, the industry’s outlook in Nigeria was largely positive amid the low but rapidly growing internet penetration rate (38.47% as at Jan-2020) and the high level of teledensity (97.45% as at Jan-2020).
Accordingly, with the already strong mobile phone penetration and growing broadband take-up among households, we expect the industry to report stronger growth in 2020 as revenue from data usage and voice calls are expected to spike. Notably, this presents retail investors an opportunity to tap into these gains by investing in some of the industry players that are listed on the Nigerian Stock Exchange.
United Capital Research