Nigeria Telecommunications Report Q2 2012

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					Nigeria Telecommunications Report Q2 2012
Published : June 2012             No. of Pages : 97                Price:US$1175




BMI’s Q212 update on Nigeria’s telecommunications market is based on 2011 regulatory data from the
Nigeria Communications Commission (NCC) and market data from the mobile market leader MTN
Nigeria. It contains the latest five-year forecasts depicting the development of the country’s mobile, fixed-
line telephony and internet markets as well as mobile ARPU forecast through to the end of 2016.
Nigeria’s mobile market grew by 2.7% in Q411 and 9% in 2011 to reach 95.167mn subscribers, according
to market data published by the telecoms regulator. As a result, mobile penetration stood at 58.5% at the
end of December 2011, up from 55.2% at the end of 2010. As in recent quarters, the GSM segment
accounted for 2011 growth as the regulator’s data showed continued subscriber losses in the CDMA
segment. We expect robust growth in the mobile market over the next five years despite the expected
disconnection of unregistered SIMs at the end of the SIM registration exercise and the implementation of
number portability. By the end of 2016, we forecast mobile subscriptions in Nigeria to reach 130mn,
equivalent of a penetration rate of around 70.7%.
On March 1 2012, the Nigerian government, through the National Council on Privatisation (NCP), adopted
a 'guided liquidation' strategy for the privatisation of state-owned incumbent operator Nigeria
Telecommunications Ltd (NITEL) and its mobile unit M-Tel. This decision follows numerous failed
privatisation attempts during the past 11 years. According to the NCP, the recommendation for the guided
liquidation as the preferred strategy for the privatisation of NITEL/M-Tel is in view of the huge financial
liabilities of both companies and the inability of the current management of the company to provide a
viable financial alternate to revive the company. NITEL's debt portfolio, which includes bank loans, unpaid
utility bills, and staff salary and pensions, is estimated at NGN300-400bn (US$1.87-2.49bn).
Although M-Tel's mobile network infrastructure is limited in quality and coverage compared with that of
other GSM operators, the company's operating licence will prove attractive to other non-GSM telecoms
service providers. BMI notes that the GSM segment has outperformed the CDMA segment in the voice
market, while 3G and, potentially, LTE services pose significant threats to CDMA and WiMAX-based
operators in the wireless data market. We would not be surprised if one of the leading local CDMA
operators or an international investor keen on entering the Nigerian mobile market outbids the existing
mobile operators for M-Tel's operating licence and network infrastructure. This scenario will result in the
emergence of a fifth GSM operator to challenge the dominance of incumbent operators MTN, Glo and
Etisalat.
Also in March, Pagatech (Paga), a start-up mobile money transfer service provider, received a US$2mn
grant from Enhancing Financial Innovation and Access (EFInA). Nigeria is one the late adopters of mobile
money services with operating licences issued in late 2010, more than three years after the service took
off in the region. Paga is keen to take advantage of the significant growth prospects in Nigeria.

Nigeria Telecommunications IndustryQ2 2012

Table of Content

Executive Summary . 5
SWOT Analysis . 6
Nigeria Mobile SWOT ... 6
Nigeria Fixed-Line And Broadband SWOT ... 7
Nigeria Political SWOT . 8
Nigeria Economic SWOT ... 8
Nigeria Business Environment SWOT 9
Business Environment Analysis .. 10
Sub-Saharan Africa ... 10
Sub-Saharan Africa Risk/Reward Ratings, Q212 . 14
Nigeria .. 15
Industry Forecast Scenario ... 16
Mobile ... 16
Table: Telecoms Sector – Mobile – Historical Data & Forecasts 16
ARPU 18
Table: Telecoms Sector – Mobile ARPU – Historical Data & Forecasts (NGN) . 18
Fixed Line . 19
Table: Telecoms Sector – Fixed Line – Historical Data & Forecasts, 2009-2016 ... 19
Internet . 20
Table: Telecoms Sector – Internet – Historical Data & Forecasts, 2009-2016 ... 20
Market Data Analysis . 22
Mobile ... 22
Table: Nigeria Mobile Market, December 2011 .. 24
Table: Wireless Net Additions Market, Q411 ... 25
Table: Nigeria CDMA Mobile Market, December 2011 .. 27
3G 31
LTE (4G) .. 33
Mobile Contract Wins .. 34
Table: Mobile Contract Wins ... 34
Mobile Content . 36
Regional Outlook . 36
Table: Major Players Leverage Footprint In VAS Development .. 38
Country Outlook .. 41
Value-Added Services Timeline 43
Table: Selected VAS Services ... 43
Mobile Operator Data .. 44
Nigeria Mobile Market Overview 44
Table: MTN . 45
Table: Globacom . 45
Airtel (formerly Zain)* . 46
Table: EMTS 46
Table: Starcomms & other CDMA operators .. 47
Fixed Line . 48
Table: Nigeria Fixed-Line Data 2010-2011. 49
Internet . 51
Table: Fixed-Line And Broadband Contract Wins And Developments 56
Regulatory Environment & Industry Developments ... 58
Competition .. 60
Licensing ... 61
Industry Developments.. 62
Competitive Landscape . 65
Key Players ... 65
Table: Key Players – Nigeria Telecoms Sector 65
Table: Selected Operators’ Financial Indicators, 2004-2010 .. 65
Company Monitor ... 66
Vendor Profile: Aviat Networks 66
Aviat Networks Quarterly Financial Results (US$mn) . 68
Company Profiles ... 70
NITEL .. 70
MTN . 73
Airtel (formerly Zain) ... 77
Globacom 80
Regional Telecommunications Penetration Overview ... 83
Fixed-Line 83
Table: Regional Fixed-Line Penetration Overview .. 83
Mobile .. 84
Table: Regional Mobile Penetration Overview 85
Internet 85
Table: Regional Internet Use Penetration Overview ... 86
Country Snapshot: Nigeria Demographic Data ... 88
Section 1: Population 88
Table: Demographic Indicators, 2005-2030 88
Table: Rural/Urban Breakdown, 2005-2030 ... 89
Section 2: Education And Healthcare ... 89
Table: Education, 2002-2005 .. 89
Table: Vital Statistics, 2005-2030 89
Section 3: Labour Market And Spending Power ... 90
Table: Consumer Expenditure, 2000-2012 (US$) 90
Glossary Of Terms . 91
Table: Glossary Of Terms 91
BMI Methodology ... 92
How We Generate Our Industry Forecasts ... 92
Table: Key Indicators For Telecommunications Industry Forecasts 92
Telecoms Business Environment Ratings .. 94
Risk/Reward Ratings Methodology .. 94
Table: Ratings Indicators 95
Weighting . 96
Table: Weighting Of Indicators ... 96
Sources 96
Table: Telecoms Sector – Mobile – Historical Data & Forecasts . 16
Table: Telecoms Sector – Mobile ARPU – Historical Data & Forecasts (NGN) . 18
Table: Telecoms Sector – Fixed Line – Historical Data & Forecasts, 2009-2016 . 19
 Table: Telecoms Sector – Internet – Historical Data & Forecasts, 2009-2016 . 20
Table: Nigeria Mobile Market, December 2011 . 24
Table: Wireless Net Additions Market, Q411 . 25
Table: Nigeria CDMA Mobile Market, December 2011 . 27
Table: Mobile Contract Wins . 34
Table: Major Players Leverage Footprint In VAS Development . 38
Table: Selected VAS Services . 43
Table: MTN . 45
Table: Globacom . 45
Table: EMTS . 46
Table: Starcomms & other CDMA operators . 47
Table: Nigeria Fixed-Line Data 2010-2011. 49
Table: Fixed-Line And Broadband Contract Wins And Developments . 56
Table: Key Players – Nigeria Telecoms Sector . 65
Table: Selected Operators' Financial Indicators, 2004-2010 . 65
Table: Regional Fixed-Line Penetration Overview . 83
Table: Regional Mobile Penetration Overview . 85
Table: Regional Internet Use Penetration Overview . 86
Table: Demographic Indicators, 2005-2030 . 88
Table: Rural/Urban Breakdown, 2005-2030 . 89
Table: Education, 2002-2005 . 89
Table: Vital Statistics, 2005-2030 . 89
Table: Consumer Expenditure, 2000-2012 (US$) . 90
Table: Glossary Of Terms . 91
Table: Key Indicators For Telecommunications Industry Forecasts . 92
Table: Ratings Indicators . 95
Table: Weighting Of Indicators . 96

				
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Description: BMI’s Q212 update on Nigeria’s telecommunications market is based on 2011 regulatory data from the Nigeria Communications Commission (NCC) and market data from the mobile market leader MTN Nigeria. It contains the latest five-year forecasts depicting the development of the country’s mobile, fixed-line telephony and internet markets as well as mobile ARPU forecast through to the end of 2016. Nigeria’s mobile market grew by 2.7% in Q411 and 9% in 2011 to reach 95.167mn subscribers, according to market data published by the telecoms regulator.