BMI-T: Nigeria a massive telecommunications opportunity

BMI-TechKnowledge Group has announced the publication of its Nigerian Telecommunications Market Report, offering an in-depth investigation into what has been hailed as one of the biggest telecommunications markets in Africa and the world.

Brian Neilson, research director at BMI-T, says that Nigeria represents a telecommunications market of, as yet, almost untapped potential.

“New telecoms infrastructure spending reached a record level of more than US$1.5 billion in 2003, and cumulative investment is expected to top $7.8 billion for the period 2001 – 2007,” says Nielson.

The report tracks the development and growth of the Nigerian telecoms sector from a scenario where the industry had been dogged by poor service and the lack of infrastructure and funds, with the incumbent network Nitel being the country’s only carrier since 1993. However, the arrival of Global System for Mobile Communications (GSM) network operators in August 2001 was regarded as a major step in the evolution of communications in the country.

In early 2003 additional impetus was added to the already growing market with the licensing of the country’s second national operator (SNO), in the form of Globacom Ltd., and a new generation of fixed wireless network operators (local exchange carriers) in both urban and rural areas. A wide variety of private telephony operators (PTOs) are making major strides in various segments of the market, including fibre and satellite backbone provisioning, and a wide range of voice, data and Internet services.

“We expect the country’s mobile subscriber base to grow from 2.4 million in 2003 to 4.2 million by the end of 2004, representing a year-on-year growth of 75 per cent. The GSM mobile market is expected to continue an aggressive growth path to reach over 8 million subscribers by 2007, as mobile operators attempt to keep up with the almost unstoppable demand for service. This forecast may be conservative, given that the ultimate addressable market is generally believed to be between 14 million and 20 million,” adds Neilson.

The Nigerian Telecommunications Market Report also highlights additional telecommunications opportunities emerging in the data, wholesale provisioning and Internet access sectors of the market driven by the steady growth anticipated for the fixed-line and fixed wireless sector of the market, with the arrival of competition in the form of the Fixed Wireless Access (FWA) operators and the SNO Globacom also driving into this space. In addition the country’s international bandwidth has received a massive boost, with the linking to the SAT-3 undersea cable. VSAT operators are also expected to increase their existing capacity on transponders, as customers continue to demand higher bandwidth with greater reliability.

“Although the mobile market has received the most media attention, and certainly has the greatest potential, the fact is that the entire Nigerian telecommunications sector is set for further dramatic growth, and has probably achieved less than a quarter of its ultimate potential, as at the end of 2003,” concludes Neilson.

The arrival of Globacom as a new entrant into the GSM mobile space is expected to see MTN Nigeria Communications Ltd. and Econet Wireless Nigeria (now Vodacom) begin to sacrifice a small portion of their existing market shares. Mtel, the mobile subsidiary of national network operator, Nitel, is expected to grow its market share from five per cent to eight per cent in the coming year, and Globacom’s Glo Mobile is expected to achieve a similar share of the mobile market.

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