Recent Study: Nigeria Telecommunications Report Q1 2013

Fast Market Research recommends "Nigeria Telecommunications Report Q1 2013" from Business Monitor International, now available

by Bill Thompson

(WireNews+Co) - Boston, MA - 27 February 2013

Executive Summary - BMI View: Increasing complaints from the telecoms regulator and mobile phone users over poor Q0S issues support our view that network quality and coverage, as opposed to price, will be a defining competitive factor in Nigeria's mobile market as it approaches saturation.

We therefore expect a significant proportion of mobile operators' capex in 2013 to go towards boosting existing network capacity to cope with expected increases in subscriptions and usage over the next few years. Meanwhile, the government has an ambitious broadband penetration target of 20% by 2017. Although this is not unattainable, we believe it could be missed by a wide margin if obstacles that presently hold back investments in broadband infrastructure are not dealt with.

Key Data

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/541244_nigeria_telecommunications_report_q1_2013.aspx?afid=201) (http://www.fastmr.com/prod/541244_nigeria_telecommunications_report_q1_2013.aspx?afid=201)

- The mobile market grew 4.8% in Q312 to bring total growth in 9M12 to 11.8%.
- Market weighted blended ARPU fell by 10.8% in Q312.
- The fixed-line sector contracted by 8.9% in Q312 to bring total decline in 9M12 to 34.1%.

Risk/Reward Ratings

Nigeria is ranked second on BMI's Q113 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 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

In December 2012, Airtel Nigeria successfully completed its first 4G LTE trial, according to the company's CEO, Rajan Swaroop. This is a significant step towards the commercial roll-out of the LTE technology. However, we do not expect LTE services to take off any time soon. Apart from the lack of sufficient spectrum to deploy 4G services on a commercial basis, we believe Airtel and its rivals - MTN, Globacom and Etisalat - are more likely to focus on fully utilising the capacity on their 3G/HSPA+ networks. That said, there is considerable risk to this view. The most notable risk is the plan by CAPCOM, the newly formed entity from the merger of CDMA operators Starcomms, MultiLinks and MTS Wireless, to refarm its existing spectrum for LTE services. If the firm is successful over the next few months, then we would expect the mobile operators to respond by stepping up their 4G plans to retain their competitive advantage in the wireless data market.

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