Subscriber Losses for FibreOne Reach 42% in Nigeria, Concurrent Declines for Starlink and Spectranet Also Reported
Internet Service Providers (ISPs) in Nigeria are currently grappling with a host of challenges that are causing a decline in their subscriber base and market presence. These issues are rooted in economic pressures, high costs, and the increasing preference for mobile internet.
## Economic Pressures and Rising Costs
The economic climate in Nigeria is worsening, with rising inflation, currency volatility, and increasing operational costs. A 50% telecom tariff hike approved in February 2025 has further increased the cost of data and services, making them less affordable for consumers.
## High Hardware Costs and Steep Monthly Fees
ISPs like Starlink, which offer satellite internet, have seen significant increases in monthly fees, from ₦38,000 to ₦57,000. This high cost, combined with expensive hardware, is pushing customers to opt for more affordable mobile internet options.
## Preference for Mobile Internet
Mobile network operators (MNOs) are increasingly providing fiber-to-the-home (FTTH) services, which are more affordable and accessible to consumers. This shift towards mobile internet is further eroding the subscriber base of traditional ISPs.
## Infrastructure and Environmental Challenges
Small ISPs face additional challenges such as infrastructure maintenance and seasonal vulnerabilities like lightning strikes and flooding during the rainy season.
## Impact on Subscriber Base and Market Presence
Major ISPs like Starlink, Spectranet, and FibreOne have experienced a significant drop in subscribers. For example, Starlink lost over 6,000 subscribers between Q3 2024 and Q1 2025, while Spectranet saw a decline of over 2,100 users during the same period. The market has seen the exit of 18 companies between Q3 2024 and Q1 2025.
The number of licensed ISPs has decreased from 252 in Q4 2023 to 234 in Q1 2025, with only 127 operational. This indicates a contraction in the ISP market due to economic pressures and regulatory challenges.
The continued decline of ISPs risks creating a market imbalance and a developmental gap, particularly in powering e-learning, telemedicine, cloud computing, and remote work at scale. The downturn in the ISP market reflects a shift towards cheaper mobile internet, which is increasingly favored by Nigerians.
Solutions to these challenges are being proposed, such as consolidation, with ISPs merging, forming consortia, or seeking public investment to survive and scale. Nnamdi Richards suggests a solution similar to what was done with the banking sector: mergers, acquisitions, IPOs, and SEC listings to stabilize struggling ISPs financially. Isoun suggests redirecting a portion of cash-transfer programs or subsidy savings to fund broadband access in schools and health centers through vetted ISPs.
However, Nigeria lacks a coherent policy framework to support ISPs in delivering essential services due to limited funding and weak execution capacity. Agencies like the Universal Service Provision Fund (USPF) under the Nigerian Communications Commission (NCC) have struggled to meet growing demand.
In Q1 2025, Nigeria had 234 licensed ISPs, but only 127 had active users. The total number of fixed broadband users in Nigeria declined from 307,946 in Q3 2024 to 289,369 in Q1 2025. ISPs are critical to providing stable, high-capacity last-mile connectivity in environments such as universities, hospitals, industrial parks, and tech hubs.
[1] "Nigeria's ISP market: A dying breed?" Techpoint Africa, 15 April 2025, [2] "Nigeria's ISP market: Challenges and Opportunities" BusinessDay, 20 April 2025, [3] "Starlink's struggles in Nigeria: High costs and a saturated market" TechCrunch, 25 April 2025, [4] "The decline of Spectranet: What went wrong?" ITWeb Africa, 30 April 2025, [5] "Nigeria's ISP market: A dark future?" TechCabal, 1 May 2025,
Mobile network operators are investing in fiber-to-the-home (FTTH) services, which are funded by financing solutions such as public investment and Initial Public Offerings (IPOs), aiming to offer more affordable and accessible internet to consumers.
Given the economic pressures and rising costs in Nigeria, ISPs like Starlink have seen a shift towards mobile internet technology as consumers prefer more cost-effective mobile options.
The cloud-based services sector could potentially gain from the decline in traditional ISPs, as more consumers and businesses turn to mobile internet for their digital needs. Overall, these changes represent a significant shift in the general-news landscape of Nigeria's internet service industry.
