Niger Telecommunications Report 2016
BMI View: We hold a positive and favourable outlook for the Nigerian mobile market and thetelecommunications sector as a whole. Mobile penetration topped 82% in Q315 and broadband penetrationstill remains very low. There remains significant demand for traditional voice and data services that hasgone thus far untapped. A rapidly maturing tower market will enable operators to extend networks into ruralareas more cost effectively, while allocation of wholesale Infraco licences will ensure investment into nextgeneration broadband networks. However, there are important industry and external risks to smooth growth.
Nigeria's government has twice postponed 4G spectrum auctions and has requested a report investigatingthe sale of incumbent telecoms operator NITEL, which will delay investment into wireline and mobile datanetworks. Meanwhile, power shortages, a weaker economic outlook amid lower oil prices and ongoingterrorist attacks all pose additional operational challenges and downside risk to our growth outlook.
Latest Updates & Industry Developments
The market posted significant growth in 9M15 and ended Q315 with a total of 150.5mn mobilesubscribers, a penetration rate of over 82.5%.
A total of 11.57mn new subscribers were added in 9M15, beating our initial estimates. We believe theoverall mobile figure is likely to jump to 168.2mn by the end of 2016 before ending our forecast periodwith an impressive 196.2mn in 2019. We do nevertheless caution that there could still exist a significantamount of inactive connections in the market that could pose a downside risk to our forecast.
The mandatory registration process enforced by the government has spelled significant trouble for marketleader, MTN. MTN failed to deactivate around 5mn unregistered accounts by the August 2015 deadline.
MTN was originally fine USD5.2bn, a sum which was later reduced to USD3.9bn.
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