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Nigeria - Telecoms, Mobile and Broadband - Market Insights

  • April 2015
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 123 pages

Nigerian telcos looking for post-election stability in northern states
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.

Key developments:
National telco Nitel and M-Tel subsidiary sold at fourth attempt, for $252.2 million;
Government proposes reduction in telcos taxes to boost sector investment;
Lagos State agrees to abolish arbitrary charges on telcos;
Regulator cracks down on poor quality of service;
Auction for spectrum in the 2.6GHz band postponed for a second time;
Airtel Nigeria sells 4,800 mobile towers to AMC;
Smile Communications extends LTE; CDMA operators stop trading shop following financial difficulties;
Government suggests that NigComSat be privatised;
Etisalat sells its 2,136 tower infrastructure;
Phase 3 Telecom begins building fibre link to Niger;
Two InfraCos named to provide wholesale fibre-based internet access to ISPs;
Government devising strategy to increase broadband penetration to 36% by 2018;
Report updates include operator data to Q4 2014, regulator’s market data updates to January 2015, recent market developments.

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)

Table Of Contents

Nigeria - Telecoms, Mobile and Broadband - Market Insights
1. Key Statistics
2. Telecommunications Market
2.1 Background
2.2 Mobile market
2.3 Fixed-line and fixed-wireless market
2.4 Internet and broadband market
2.5 Telecom investments
3. Regulatory Environment
3.1 Nigerian Communications Commission Decree (NCCD)
3.2 National Telecommunications Policy (NTP)
3.3 Nigerian Communications Act
3.4 West African common regulatory framework
3.5 Class Licence policy extension
3.6 Regulatory authority
3.6.1 Nigerian Communications Commission (NCC)
3.7 Key regulatory issues
3.7.1 Interconnection
3.7.2 Quality of service (QoS)
3.7.3 Environmental impact of telecom towers
3.7.4 Infrastructure sharing
3.7.5 No regulation on state level
3.7.6 Universal service
3.7.7 National emergency numbers
3.7.8 Foreign ownership
3.7.9 Mandatory NSE listing
3.7.10 Dominant market players
3.8 Telecom sector liberalisation
3.8.1 Globacom's SNO licence
3.8.2 Regional fixed-wireless access (FWA) licences
3.8.3 International gateway licences
3.8.4 Unified licensing regime
3.8.5 Regional broadband infrastructure licences
3.9 Privatisation of Nitel
3.9.1 IPO
3.9.2 Liquidation
4. Fixed Network Market
4.1 Fixed-line market overview
4.1.1 Fixed-line statistics
4.1.2 Unified licensing regime
4.1.3 Regional broadband infrastructure licences
4.2 Fixed network operators in Nigeria
4.2.1 Nigerian Telecommunications (Nitel, defunct)
4.2.2 Globacom
4.2.3 VGC Communications, MTN
4.2.4 National Long-Distance Operators (NLDO)
4.2.5 Fixed-wireless network operators
5. Telecommunications Infrastructure
5.1 National fibre optic infrastructure
5.1.1 Backbone networks
5.1.2 Fibre-to-the-Premises (FttP)
5.2 International infrastructure
5.2.1 Submarine fibre
5.2.2 Terrestrial fibre
5.2.3 Satellite
6. Internet Market
6.1 Overview
6.2 Government measures
6.3 Internet statistics
6.4 Limited availability of PCs
6.4.1 Stimulus programs
6.5 Public Internet access locations
6.5.1 Mobile Internet Units (MIUs)
6.6 Internet Exchange Points (IXP)
6.7 Country code top level domain (ccTLD) administration
6.8 ISP market
6.8.1 Internet Service Providers Association of Nigeria (ISPAN)
6.8.2 Selected ISPs
6.9 VoIP Internet telephony
6.9.1 Nitel
6.9.2 Globacom
6.9.3 Starcomms
6.9.4 Adesemi Nigeria
6.9.5 MWEB Nigeria
6.9.6 Accelon
6.9.7 Linkserve
6.9.8 Layer3
6.9.9 Swift Networks
7. Broadband Market
7.1 Overview
7.1.1 National Broadband Plan
7.2 ADSL
7.3 Wireless broadband
7.3.1 Odu'a Telecom
7.3.2 Swift Networks
7.3.3 Startech Connection
7.3.4 Nitel
7.3.5 Netcom Africa
7.3.6 MWEB Nigeria
7.3.7 Gateway Communications
7.3.8 2.3GHz auction
7.3.9 2.5GHz auction
7.4 WiFi
7.4.1 Accelon, Internet Solutions
7.4.2 Jigawa Broadband Access Network
7.4.3 Polestar/5G WiFi network in Lagos
7.4.4 NaijaWiFi
7.4.5 Abuja WiFi, WiMAX
7.4.6 Enugu
7.4.7 Bharti Airtel
7.5 WiMAX
7.6 Mobile broadband
7.7 Internet via satellite
7.7.1 Direct-on-PC
7.7.2 BroadbandDirect
7.7.3 IP Direct
7.7.4 MWEB Nigeria
7.7.5 Other services
7.8 Broadband over Powerlines (BPL)
7.9 Fibre-to-the-Premises (FttP)
8. Digital Economy/Digital Media
8.1 Digital Economy
8.1.1 E-commerce, e-payments
8.1.2 E-government
8.1.3 E-health
8.1.4 E-learning
8.1.5 Electronic Crimes Bill
8.2 Digital media
8.2.1 Cable TV
8.2.2 Internet TV
8.2.3 Triple-play, NGN
8.2.4 Digital TV
8.2.5 Blogs
8.2.6 Facebook
9. Mobile Communications
9.1 Overview of Nigeria's mobile market
9.1.1 General statistics
9.1.2 Mobile broadband/data
9.1.3 Forecasts mobile subscribers 2015; 2018
9.2 Regulatory issues
9.2.1 GSM licence terms
9.2.2 Spectrum
9.2.3 Interconnection
9.2.4 Mobile tariffs
9.2.5 Unified licensing regime
9.2.6 Universal service
9.2.7 Mobile Number Portability (MNP)
9.2.8 Central equipment identity register
9.2.9 Quality of Service
9.2.10 SIM card registration
9.2.11 Equal access for mobile content providers
9.2.12 Consumer protection against billing irregularities
9.3 Mobile infrastructure
9.3.1 International gateways
9.3.2 National mobile infrastructure plan
9.3.3 Tower infrastructure
9.3.4 Analogue networks
9.3.5 Digital networks
9.3.6 Other infrastructure developments
9.4 Major GSM mobile operators
9.4.1 MTN Nigeria
9.4.2 Bharti Airtel (formerly Zain/Celtel Nigeria)
9.4.3 Globacom
9.4.4 Etisalat Nigeria (EMTS, Mubadala)
9.4.5 M-Tel
9.5 Major CDMA mobile operators
9.5.1 Multi-Links Telkom
9.5.2 Reliance Telecommunications Ltd (Reltel, Zoom)
9.5.3 Starcomms (Capcom)
9.5.4 Intercellular Nigeria
9.5.5 Visafone
9.6 Mobile content and applications
9.6.1 Mobile money transfer, m-banking
9.6.2 M-health
9.6.3 Mobile TV
9.7 Mobile handsets
Table 1 Country statistics 2014
Table 2 Fixed-line network statistics 2014
Table 3 Internet provider statistics 2014
Table 4 Internet user statistics 2014
Table 5 Mobile statistics 2015
Table 6 National telecommunications authority
Table 7 Financial bids for Nitel/M-Tel, first and second round 2010
Table 8 Historic - Fixed lines in service and teledensity in Nigeria 1999 - 2004
Table 9 Fixed lines in service and teledensity in Nigeria 2005 - 2015
Table 10 Fixed and fixed-wireless lines in Nigeria by operator, market share December 2013
Table 11 Internet users and penetration rate in Nigeria 2000 - 2015
Table 12 International internet bandwidth in Nigeria 2001 - 2013
Table 13 Fixed-line broadband subscribers 2007 - 2014
Table 14 Active fixed-wireless broadband lines 2007 - 2014
Table 15 Mobile internet subscribers in Nigeria by operator (GSM) 2012 - 2015
Table 16 Active mobile broadband subscribers 2010 - 2013
Table 17 Historic - Mobile subscribers and penetration rate in Nigeria 1998 - 2004
Table 18 Mobile subscribers (active) and penetration rate in Nigeria 2005 - 2015
Table 19 Mobile market share of subscribers by operator 2011 - 2015
Table 20 Mobile subscribers (GSM) by operator, technology 2014
Table 21 Mobile subscribers (CDMA) by operator, technology 2014
Table 22 Forecast mobile subscribers in Nigeria 2015; 2018
Table 23 GSM mobile internet subscribers by operator 2014
Table 24 Glo Mobile Nigeria 3G HSPA pricing 2013
Table 25 MTN Nigeria data plan pricing 2015
Table 26 Visafone Nigeria CDMA-2000 1x and EV-DO pricing 2015
Table 27 MTN mobile subscribers 2011 - 2014
Table 28 MTN Nigeria financial data 2010 - 2014
Table 29 MTN Nigeria ARPU 2002 - 2014
Table 30 Zain Nigeria ARPU 2006 - 2009
Table 31 Airtel mobile subscribers 2011 - 2014
Table 32 Globacom mobile subscribers 2011 - 2014
Table 33 Etisalat mobile subscribers 2011 - 2014
Table 34 Etisalat mobile revenue 2013 - 2014
Table 35 CDMA subscribers by operator 2011 - 2014
Table 36 Starcomms Nigeria total and mobility/mobile subscribers 2005 2014
Table 37 Visafone mobile subscribers 2013 - 2014
Chart 1 Fixed lines in service and teledensity in Nigeria 2005 - 2015
Chart 2 - Internet users and penetration rate in Nigeria 2000 - 2015
Chart 3 Mobile subscribers and penetration 2005 - 2015
Exhibit 1 Number of telecom licences by category 2013
Exhibit 2 Regional FWA licensees
Exhibit 3 Regional FWA licensees in Nigeria
Exhibit 4 Ownership battle from EWN to Vee Networks to V-Mobile to Zain to Bharti Airtel

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