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Nigeria Telecommunications Report Q4 2011
Business Monitor International, Nov 2011, Pages: 96
BMI's Q411 update on Nigeria's telecommunications market is based on regulatory data from the Nigeria Communications Commission (NCC) and market data from the mobile market leader MTN Nigeria relating to the end of June 2011. It contains the latest five-year forecasts depicting the development of the country's mobile, fixed-line telephony and internet markets through to the end of 2015.
The most notable development in Nigeria's mobile market this quarter is the surprise contraction of the mobile subscriber base during the three months to June 30 2011. According to subscriber figures published by the NCC, the mobile market recorded net losses of 333,000 subscribers or contraction of 0.4% q-o-q in Q211 to reach 89.653mn. The decline was driven by significant subscriber losses by the country's four CDMA operators as well as second- and third-ranked Globacom and Airtel in the GSM segment.
Meanwhile, MTN and Etisalat recorded considerably fewer net additions in Q211 than in the previous quarters. BMI notes that subscribers net losses in Q211 is not a sign the market is approaching saturation, considering mobile penetration was just 55.2% at the end of June 2011. However, we believe the development supports our view that most urban areas are saturated and operators will need to extend their networks into underserved areas to achieve future subscriber growth.
We have revised down our mobile forecast for Nigeria this quarter to reflect the contraction in Q211 and the likelihood of slower growth in H211 because of mobile saturation in urban areas and disconnection of unregistered SIMs. BMI notes that the NCC extended the deadline for mandatory SIM registration after the original deadline of September 2011. Our latest forecast shows weaker subscriber growth during our forecast period than previously expected. We now expect mobile penetration in Nigeria to reach 58.5% by the end of 2011 and just over 70% or 125.3mn subscribers by 2015. BMI notes that rapid network expansion and lower tariffs due to competition pose upside risks to our forecast.
However, the possibility of operators opting to roll out higher value services to the expanding middle class in urban areas as opposed to basic voice and SMS services to low value rural dwellers poses a downside risk to our forecast.
The broadband market received a boost with the commercial launch of Spectranet's WiMAX network in October 2011. Spectranet, along with Mobitel and Multilinks, won spectrum in the 2.3GHz auction in May 2009. Meanwhile, fourth-ranked mobile operator Etisalat launched a 3.75G/HSPA+ service in Lagos and other major cities, with transmission speeds of up to 42Mbps.
These developments bode well for broadband penetration in Nigeria and are in line with our existing internet and broadband growth forecast. Meanwhile, the contraction of the fixed line telephony market accelerated in Q211 as the market decline by 11.6%. This brings total decline in H111 to 18%, a situation that is in line with our forecast that the market will decline by 31% in 2011.
Business Monitor International's Nigeria Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Nigeria's telecommunications industry.
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