New Reports Synopsis: Nigeria 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. TABLE OF CONTENTS: Investment Opportunities in the ICT Sector in Nigeria: 2010 EXECUTIVE SUMMARY I INTRODUCTION I BACKGROUND 1 OBJECTIVES OF THE STUDY 2 RESEARCH METHODOLOGY 3 A NOTE ON FORECASTS 3 CURRENCY 4 ACKNOWLEDGEMENTS 4 INVESTMENT OPPORTUNITIES IN THE ICT SECTOR IN NIGERIA 6 RATIONALE FOR SELECTING NIGERIA 7 OVERVIEW OF THE NIGERIAN ECONOMY 7 OIL DEPENDENCE 8 REGIONALISM 10 CORRUPTION 10 VISION 2020 12 PROSPECTS FOR THE NIGERIAN ECONOMY 14 ICT’S IN NIGERIA 15 THE FIXED LINE MARKET 17 UNDERSEA CABLE 18 THE MOBILE MARKET 19 INTERNET 22 CHALLENGES IN NIGERIAN ICT MARKETS 23 KEY PLAYERS 24 NITEL 24 MTN NIGERIA 26 GLOBACOM NIGERIA 27 ZAIN (FORMERLY CELTEL) 28 EMTS 29 MAINONE CABLE COMPANY (NIGERIA) LTD 29 VISAFONE COMMUNICATIONS LTD 30 STARCOMMS NIGERIA PLC 30 G-CELL WIRELESS LTD (GICELL OR G-CELL) 31 HELIOS TOWERS 32 NIGCOMSAT 32 IPNX 33 REGULATORY CONTEXT AND PROGNOSIS 33 OVERVIEW OF ICT LEGISLATION 33 LICENSING FRAMEWORK 34 INVESTMENT ENVIRONMENT 37 FOREIGN INVESTMENT 37 BANKING SECTOR 39 PRIVATE EQUITY 40 INVESTMENT PROSPECTS 42 HISTORICAL INVESTMENT IN THE ICT SECTOR 42 MARKET GROWTH PROSPECTS AND FORECAST 43 THE FIXED LINE/FIXED WIRELESS ACCESS MARKET 43 MOBILE MARKET FORECAST 45 INTERNET MARKET FORECAST 46 GOVERNMENT INVESTMENT PROMOTION INITIATIVES 48 INVESTMENT OPPORTUNITIES IN THE FIXED LINE NETWORK AND BACKBONE 50 INVESTMENT OPPORTUNITIES IN MOBILE NETWORKS 50 OTHER INVESTMENT OPPORTUNITIES 51 INVESTMENT IN NIGERIA IN PERSPECTIVE 52 APPENDIX 1: KEY CONTACTS A-1 LIST OF FIGURES NIGERIA: REAL ANNUAL GDP GROWTH RATE 8 TELEDENSITY IN AFRICA (NIGERIA) 16 NIGERIA: FIXED LINES IN SERVICES (2000 – 2009) 17 NIGERIA: MOBILE SUBSCRIBERS (2000 – 2009) 19 NIGERIA: INTERNET USERS (2000 – 2009) 23 NIGERIA: CUMULATIVE PRIVATE SECTOR INVESTMENT (2000 – 2008) 43 NIGERIA: FIXED LINE FORECAST (2000 – 2014) 44 NIGERIA: MOBILE SUBSCRIBER FORECAST (2000 – 2014) 45 NIGERIA: INTERNET USAGE FORECAST (2000 – 2014) 47 NIGERIA: INTERNET SUBSCRIBER FORECAST (2000 – 2014) 47 LIST OF TABLES NIGERIA: KEY STATISTICS 7 ICT USAGE IN NIGERIA (2008 AND 2009 ESTIMATES) 15 NIGERIA: MOBILE MARKET SHARE BY SERVICE PROVIDER (SEPTEMBER 2009) 20 NIGERIA: MOBILE MARKET GROWTH BY SERVICE PROVIDER (Q1 TO Q3 2009) 21 MTN NIGERIA FINANCIAL DATA 27 ZAIN NIGERIA FINANCIAL DATA 28 STARCOMMS FINANCIAL DATA 31 REGISTERED FINANCIAL INSTITUTIONS IN NIGERIA 40 INVESTMENT COMPANIES AND FUNDS ACTIVE IN NIGERIA AND SUB-SAHARAN AFRICA 41 Report Price: GBP 1495 SINGLE / 1595 CORPORATE Order   New Report – Investment Opportunities in the ICT Sector in Africa – 2010   Investment Opportunities in the ICT Sector in Ethiopia   Investment Opportunities in the ICT Sector in Nigeria   Investment Opportunities in the ICT Sector in Zimbabwe   Syrian 3rd Mobile Licence   Privatisation of Nitel   Privatisation of Zamtel   Mozambique third mobile licence