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Investment Opportunities in the ICT Sector in Nigeria

  • ID: 1369549
  • Report
  • March 2010
  • Region: Nigeria
  • 53 Pages
  • BroadGroup TMT Ventures
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The report provides analysis of Africa's largest market where the government has established a number investment promotion initiatives whereby it will provide funding support to investors that address certain types of investments, most notably those aimed at providing broadband access to specific stakeholder groups or communities. Analysis includes private equity and banking sectors and Investment funds active in infrastructure and related ICT investing as well as existing telecom players, new entrants and upcoming government and private projects

Nigeria is one of Africa's largest markets, with a population exceeding 150 million people. It has enjoyed a GDP growth rate averaging more than 6% per year over the past eight years. The market is fully liberalized, with competition allowed in virtually all segments. And there is a unified licensing regime in place, which allows operators to offer converged services. The total number of fixed lines (including fixed wireless access) was as paltry 1.4 million at the end of 2009. The failed sale of Nitel, the state-owned fixed line operator, resulted in the operator experiencing numerous problems, including loss of 90% of its subscribers. The Nigerian government is once again looking for a private sector partner to take control of the troubled Nitel. And while, overall, fixed wireless access has grown, there is a great deal of volatility amongst the fourteen licensed operators.

There are more than 70 million mobile subscribers in Nigeria and it has the largest mobile subscriber base in Africa. Five GSM operators are active in the Nigerian mobile market and four CDMA network operators. The Mobile penetration rate at the end of 2009 was 48%. With the mobile subscriber penetration potential being more than 100%, there is ample room for growth in the market. National backbone coverage is limited and, in keeping with the government's Vision 2020 initiative, there are plans underway to extend the backbone, which will provide additional opportunities for investors. The imminent lighting up of the MainOne and Glo-1 undersea cables connecting to the country is also likely to yield a wide range of growth opportunities in making international bandwidth more readily available. The number of fixed line/fixed wireless access subscribers in Nigeria is expected to increase to a modest 2.9 million by 2014, indicating that the access mode of preference will continue to be by mobile phone. The number of mobile subscribers is expected to grow at 10% per year over the period, reaching almost 114 million by 2014, and representing net additions of almost 42 million subscribers. Mobile teledensity will approach 66% over this period. The number of internet users is set to increase to 36 million.

The Nigerian government has established a number investment promotion initiatives whereby it will provide funding support to investors that address certain types of investments, most notably those aimed at providing broadband access to specific stakeholder groups or communities. The government is also actively promoting electronics manufacturing in Nigeria on the basis that Nigerian ICT markets are big enough to support local manufacture. Nigeria thus offers a wide range of investment opportunities in a rapidly growing market. Whilst this market is currently somewhat exposed to the price for oil and exchange rate fluctuations, the diversification efforts of the Nigerian government are certain to reduce this dependence – leading to enhanced opportunities. The risks are higher than in more established markets but so are the potential returns in what is likely to be a very lucrative telecoms market for many years to come.
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EXECUTIVE SUMMARY

INTRODUCTION

Background
- Objectives Of The Study
- Research Methodology
- A Note On Forecasts
- Currency
- Acknowledgements

INVESTMENT OPPORTUNITIES IN THE ICT SECTOR IN NIGERIA

Rationale For Selecting Nigeria

Overview Of The Nigerian Economy
- Oil Dependence
- Regionalism
- Corruption
- Vision 2020
- Prospects For The Nigerian Economy

Ict'S In Nigeria
- The Fixed Line Market
- Undersea Cable
- The Mobile Market
- Internet
- Challenges In Nigerian Ict Markets

Key Players
- Nitel
- Mtn Nigeria
- Globacom Nigeria
- Zain (Formerly Celtel)
- Emts
- Mainone Cable Company (Nigeria) Ltd
- Visafone Communications Ltd
- Starcomms Nigeria Plc
- G-Cell Wireless Ltd (Gicell Or G-Cell)
- Helios Towers
- Nigcomsat
- Ipnx

Regulatory Context And Prognosis
- Overview Of Ict Legislation
- Licensing Framework

Investment Environment
- Foreign Investment
- Banking Sector
- Private Equity

Investment Prospects
- Historical Investment In The Ict Sector
- Market Growth Prospects And Forecast
- The Fixed Line/ Fixed Wireless Access Market
- Mobile Market Forecast
- Internet Market Forecast
- Government Investment Promotion Initiatives
- Investment Opportunities In The Fixed Line Network And Backbone
- Investment Opportunities In Mobile Networks
- Other Investment Opportunities
- Investment In Nigeria In Perspective

Appendix 1: Key Contacts

LIST OF FIGURES:

NIGERIA
Nigeria: Real Annual Gdp Growth Rate
Teledensity In Africa (Nigeria)
Nigeria: Fixed Lines In Services (2000 – 2009)
Nigeria: Mobile Subscribers (2000 – 2009)
Nigeria: Internet Users (2000 – 2009)
Nigeria: Cumulative Private Sector Investment (2000 – 2008)
Nigeria: Fixed Line Forecast (2000 – 2014)
Nigeria: Mobile Subscriber Forecast (2000 – 2014)
Nigeria: Internet Usage Forecast (2000 – 2014)
Nigeria: Internet Subscriber Forecast (2000 – 2014)

LIST OF TABLES:

NIGERIA
Nigeria: Key Statistics
Ict Usage In Nigeria (2008 And 2009 Estimates)
Nigeria: Mobile Market Share By Service Provider (September 2009)
Nigeria: Mobile Market Growth By Service Provider (Q1 To Q3 2009)
Mtn Nigeria Financial Data
Zain Nigeria Financial Data
Starcomms Financial Data
Registered Financial Institutions In Nigeria
Investment Companies And Funds Active In Nigeria And Sub-Saharan Africa
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