New Market Research Report: Nigeria Telecommunications Report Q2 2013

From: Fast Market Research, Inc.
Published: Thu May 09 2013

The lowering on mobile termination rates (MTRs) and the implementation of the much-awaited mobile number portability (MNP) during H113 will boost competition in the mobile sector. We expect this to increase the downward pressure on voice ARPUs, a situation that supports our view of revenue stream diversification by network operators in order to remain competitive in the mobile market. To this end, we retain our view that data services, especially on mobile networks, will grow rapidly over the next few years on the back of strong demand from consumers and increasing investment in network infrastructure by operators.

Key Data

* The mobile market grew 5.6% in Q412 to bring total growth in 2012 to 18.51%
* Market weighted blended ARPU fell by 10.2% in 2012.
* The fixed-line sector contracted by 11.8% in Q312 to bring total decline in 2012 to 41.9%.

Full Report Details at

Risk/Reward Ratings

Nigeria is ranked first on BMI's Q213 Risk/Reward ratings (RRR) table for Sub-Saharan Africa. Nigeria scores above the regional average in all four categories of our ratings, although a high rate of unemployment, weak social infrastructure and relatively low GDP per capita contribute to a weak Country Rewards score. Nigeria's population and rapid subscriber growth contribute to a high score in the Industry Rewards category but this is counterbalanced by a weak subscriber mix and declining ARPUs. Meanwhile, a positive private consumption growth outlook, based on strong macroeconomic fundamentals, was a major boost to Nigeria's Country Risk rating in this quarter's update.

Key Trends And Developments

The Nigerian Communications Commission (NCC) took notable steps during H113 to boost competition in the mobile market as well as improve the overall quality of service (QoS) in the telecoms sector. On January 3 2013, the regulator set a price cap for Short Message Service (SMS) across all networks. The new price cap of NGN4 (US$0.0252) per SMS applies to all domestic off-net SMSs and took effect from February 5. The SMS price cap is a 60% reduction from the former price cap set at NGN10 per SMS for off-net messages. On-net messages are also expected to drop by at least 20% from the previous cap of NGN5 per SMS.

In March 2013, the NCC announced plans to launch MNP before the end of H113, and also reduced revealed new interconnection rates to take effect from April 1. We believe MTR cuts and the introduction of MNP will have long-term positive effects on the Nigerian mobile market, bringing prices down and encouraging operators to meet customer needs. This will support our already-strong growth expectations for the market and enable more Nigerians to gain access to mobile services. Both regulatory developments put greater power in the hands of consumers, forcing operators to ensure their services are improved so they can retain subscribers.

About Fast Market Research

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For more information about these or related research reports, please visit our website at or call us at 1.800.844.8156.

You may also be interested in these related reports:

- Singapore Telecommunications Report Q2 2013
- Vietnam Telecommunications Report Q2 2013
- Poland Telecommunications Report Q2 2013
- West & Central Africa Telecommunications Report Q2 2013
- France Telecommunications Report Q2 2013

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Contact Name: Bill Thompson
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