Data plays a greater profile in Africa’s largest telecoms market

Nigeria is Africa’s largest telecoms market and one of the fastest growing in the region. Over the year to June 2009, mobile subscriptions grew by 29% in Nigeria to exceed 66 million. The mobile market dominates the country’s telecommunication industry, which counted fewer than 60,000 PSTN lines and 1.3 million fixed wireless lines in 2Q09. Informa forecasts the mobile market will soar to 144 million by 2014 when the SIM-card penetration rate will exceed 80%, up from 43% in June 2009.

Nigeria subscriptions forcast by technology

As at 2Q09, nine companies offered mobile voice services in Nigeria at a national level and at least four other companies had pledged to launch by early 2010. The GSM networks have the largest market share helped by a wider coverage and, until recently, easier supply of GSM handsets.

Future growth will be fuelled by intense competition in both the voice and data segments leading to a high level of multiple SIM/connection usage. As at mid-2009, an entry tariff was less than US$2 in 2Q09 and handsets prices started from US$14 for CDMA devices (ZTE C310) and US$20 for GSM handsets (Motorola Motofone F3 and W156). In addition to this, operators are increasingly flexible on disconnection and activity policies and customers may remain considered active by keeping a balance of less than US$50 on their account for nearly a year.

Another segment favouring growth in multiple connections is the uptake of the data segment, namely mobile internet. The total number of data users over GPRS/EDGE, CDMA2000 1X and 3G increased by 47% to 2 million over the year to 1Q08. While GPRS/EDGE is mainly accessed over handsets, 3G data connections are essentially made via data cards and USB dongles.

Nigeria: total subscriptions vs unique subscribers

3G was first introduced in Nigeria in 1Q06 by Starcomms which launched EV-DOdata cards. The operator rapidly became the country’s largest ISP as its offering was more competitive than the VSAT and other fixed wireless offerings provided by the incumbent ISPs then. At the same time, state-owned fixed network Nitel did not (and still does not) provide broadband services and its PSTN coverage remains limited. Starcomms’ domination in the internet market has, however, beenchallenged by the introduction of 3G/HSPA by MTN and Globacom in 2008. The number of mobile broadband subscriptions soared by over 300% to nearly 300,000 between 1Q08 and 1Q09 with MTN holding over 50% of the market share in 1Q09. Informa forecasts Nigeria will have three million mobile broadband users in 2010.