This report provides a comprehensive overview of trends and developments in Nigeria’s telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:
Researcher:- Henry Lancaster
Current publication date:- April 2015 (14th Edition)
Given its potential for further growth, Nigeria’s large and fast growing telecom markets continues to attract considerable foreign investment. Far reaching liberalisation has enabled hundreds of companies, operating under a unified licensing regime, to provide a full range of telecom and value-added services. Mobile and broadband services are being rolled out rapidly, backed by new national and international fibre links. Competition has eroded the dominance of the incumbent national telco Nitel, and after a decade of failed privatisation attempts the troubled and indebted telco has been sold.
Despite the pace of change in telecom infrastructure development, many areas remain underserved. In some regions of the predominantly Muslim north of the country where the Boko Haram group is active there has been disruption to telecom services, largely caused by the destruction of equipment and the difficulties faced by operators in accessing plant and repairing damage.
The broadband sector has seen some consolidation among players, though there remain more than 100 ISPs active. Most broadband accesses are through mobile networks, though there are a number of WiMAX operators which have found niche markets. The landing of international submarine cables since 2009 broke the monopoly on fibre access held by Nitel. Additional capacity has revolutionised the market: the 90% reduction in the cost of international bandwidth, coupled with improved domestic infrastructure, has brought broadband affordability to a greater proportion of the population in recent years.
Supported by the expansion of competing national fibre backbone networks, applications such as e-commerce, online banking and e-payments, e-health, e-learning and e-government are rapidly evolving. The government in early 2015 also committed to increasing broadband penetration from about 8% to 36% by 2018.
Nigeria is Africa’s largest mobile market, with some 140 million subscribers and a market penetration above 100%. The rapid growth has led to problems with network congestion and quality of service, prompting the telecom regulator to impose fines and sanctions. Network operators invest billions of dollars in base stations and fibre optic transmission infrastructure to support the ever increasing demand for bandwidth.
Efforts are also being made to encourage infrastructure sharing and to outsource the management of towers to third parties. Much of the remaining addressable market is in rural areas where providing network infrastructure and operations is expensive. In combination with falling ARPU, this is forcing network operators to streamline and to develop new revenue streams from mobile broadband and data services such as m-payments and m-banking.
Nigeria also has a competitive fixed-line market, with a second national operator, Globacom, competing with Nitel and over 80 other licensed fixed-telephony providers. Combined, these alternative carriers provide around 85% of all fixed connections.
Companies mentioned in this report:
Nigerian Telecommunications (Nitel, M-Tel); Glo Mobile (Globacom); Bharti Airtel (formerly Zain, Celtel); Etisalat Nigeria (EMTS, Mubadala); Visafone; Starcomms; Multi-Links; Gicell Wireless; Mobitel, Spectranet, Smile Communications, MTN Nigeria; Reliance; Intercellular; Megatech Engineering (Zoda Fones); Telkom; Econet Wireless; Vodacom; VGC Communications; Nepskom Communications; MTS First Wireless; Suburban Telecom; Backbone Connectivity Network (BCN); Traffic Network Services; Fibre Tech West Africa; Phase3 Telecom; Alheri Engineering; Gateway Telecoms Integrated Services; Mobitel Nigeria; Prestel (O-Mobile); Galaxy Backbone; 21st Century Technologies; Main One (Mainstreet Technologies); Brymedia; NigComSat; O3b Networks, WASACE; Cyberspace; Hyperia; Linkserve; 21st Century Technologies; PINET Informatics; Odu’a Telecom; Swift Networks; Startech Connection; Netcom Africa; MWEB Nigeria; Gateway Communications; Accelon (Internet Solutions); Galaxy Information Technology and Telecommunication; Polestar; Naija WiFi; Suburban Telecom; Zinox; Direct-on-PC; IP Direct; Communication Trends Nigeria; Entertainment Highway (HiTV)
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