Nigeria Has 'Massive Telecoms Opportunities'

ITWeb (Johannesburg)

May 7, 2004
Posted to the web May 7, 2004

Tracy Burrows
Johannesburg

Market analyst firm BMI-TechKnowledge says in its Nigerian Telecommunications Market Report that the country's telecommunications market has "massive" untapped potential.

"New telecoms infrastructure spending reached a record level of more than US$1.5 billion in 2003, and cumulative investment is expected to top US$7.8 billion for the seven-year period 2001 through 2007," says Brian Neilson, research director at BMI-T.

"We expect the country's mobile subscriber base to grow from 2.4 million in 2003 to 4.2 million by the end of 2004, representing a year-on-year growth of 75%. The GSM mobile market is expected to continue an aggressive growth path to reach over 8 million subscribers by the year 2007 as mobile operators attempt to keep up with the almost unstoppable demand for service. This forecast may be conservative, given that the ultimate addressable market is generally believed to be between 14 million and 20 million," adds Neilson.

"Although the mobile market has received the most media attention, and certainly has the greatest potential, the fact is that the entire Nigerian telecommunications sector is set for further dramatic growth, and has probably achieved less than a quarter of its ultimate potential, as at the end of 2003."

The country's international bandwidth has also received a boost with the linking to the SAT-3 undersea cable. VSAT operators are also expected to increase their existing capacity on transponders as customers continue to demand higher bandwidth with greater reliability.

According to BMI-T, the arrival of Globacom as a new entrant into the GSM mobile space is expected to see MTN Nigeria and Econet Wireless Nigeria (now Vodacom) begin sacrificing a small portion of their existing market shares. Mtel, the mobile subsidiary of national network operator Nitel, is expected to grow its market share from 5% to 8% in the coming year, and Globacom's Glo Mobile is expected to achieve a similar share of the mobile market.