The poor outlook of the Internet service providers (ISPs) sub-sector may not improve soon as subscriptions have dropped further.
  
This challenge has become more pronounced with leading players witnessing a drop in subscriptions.
 
The latest ISP data from the Nigerian Communications Commission (NCC) showed that total active customers across 127 ISPs dropped to 289,369 as of Q1 2025 from 307,946 recorded in Q3 2024.
 
Leading players, including Spectranet, Starlink and Priority have since seen their patronages dip as Nigerians slash Internet spending owing to the 50 per cent tariff hike.
 
Specifically, Starlink, which jumped to become the second-largest ISP in Nigeria last year, saw its customer base plunge from 65,564 in Q3 2024 to 59,509 in Q1 2025, resulting in the loss of about 6,000 subscribers.
 
Speaking to The Guardian on the challenges confronting the sector, Head of Regulatory and Public Relations, FibreOne, Kehinde Joda, said the ISP sub-sector is battling several issues.
 
Joda said one of the major challenges in the ISP sub-sector is that many operators still run traditional models, selling plain Internet access without building clear differentiators or value-added services.
 
He said innovation is more than just technology but about how “you design your packages, how you manage customers, and how you adapt to changing needs”.
 
Another key challenge, according to him, is infrastructure cost. He said deploying and maintaining robust networks, especially fibre, is capital-intensive.   
 
Joda said the above to say that not every operator has the structure or funding strength to keep pace, saying the result is that service quality suffers in some areas, which affects public trust and in turn slows down subscriptions.
 
From his perspective, the Founder and Chief Executive Officer of Wave5 Wireless, Ayọ‌wándé Adálémọ, blamed the sub-sector problem on the stagnant business model adopted by nearly all of the players.
 
“It is a kick-and-follow model; I buy bandwidth from a provider like MainOne or Globacom and then I resell it, typically as fiber-to-the-home. We largely copy and paste European or American standards without adapting them to our unique environment. This same business model has been in use for the last 30 years and nothing has changed. Some ISPs will not even consider deploying to a street unless they can sign up 20 subscribers first. They are not being innovative enough,” he stated.
 
Adalemo tasked the players with changing times, saying people are mobile and nomadic: “They don’t want to be tied to their homes. ISPs need to redefine what an “Internet service” is and who their customer is.
 
According to him, the definition of an SME has evolved from a brick-and-mortar shop to a woman selling hair on Instagram. “She is an SME, and she needs to access the Internet. The question for an ISP should be: What solutions can I deliver to that SME? Where can she reach me, and what value-added services can I provide to enable her business?
 
“For Wave5 Wireless, we think from the customer back to the network, not the other way around. Others build a network for an estate and stop there. We ask what the customer wants and where they are — in the market, at the bus stop, in a restaurant — and we aim to be waiting there for them. But we don’t just offer the Internet; we offer a service they can’t refuse. We partner with companies like ShowMax, which struggle because users must first buy expensive data to watch their content. Through integration, their customers become our customers, and we solve a major pain point for both.”
 
Adalemo stressed that the lack of innovation is compounded by other issues, including vandalism, the high cost of equipment, difficult access to funding, and multiple layers of regulation and taxation.
 
While noting that there is no ISP in Nigeria with a million subscribers, he described it as a sad reality, the Wave5 Wireless boss said the key is for ISPs to embrace collaboration and the shared economy as strengths instead of viewing everyone as a competitor.

With the operators not immune from the struggling economy, the Innovation and Technology Policy Advisor and the Founder of Jidaw.com, Jide Awe, said the ISPs are also feeling the impacts of the economic realities in Nigeria, which have forced Nigerians to cut costs.
 
“The rising cost of data, equipment, and power supply means many families and small businesses have to cut costs and focus strictly on essentials.
“Maintaining subscriptions isn’t as much of a priority for many. Starlink, in particular, is more expensive in terms of device and subscription costs,” he said.

According to him, while ISP customers are predominantly business, unlike mobile networks that cater mostly to individuals, he pointed out that many businesses may also be switching to mobile networks due to their affordability and flexibility compared to fixed ISPs.