Professional Documents
Culture Documents
Abuja, Nigeria
March 16, 2010
Mobile Services in Nigeria
Table of Contents
Executive Summary
Pyramid Perspective
2
Mobile Services in Nigeria Executive Summary
Mobile communications are having a positive impact in Nigeria by attracting investment
and developing various commercial activities…
Pyramid analyzed mobile adoption trends, examples of mobile applications as well as the
perspectives of key players and 1,500 Nigerian end users. The top five conclusions of our study are as
follows:
1. Mobile services have ample reach in Nigeria and will continue to post rapid growth.
Mobile subscriptions surpassed 72.6m at YE2009 resulting in a penetration rate of 50% of
the
h population.
l i
Pyramid projects subscriptions will surpass 128m by 2014, creating a substantial user base
for the development of the mobile applications market.
3
Mobile Services in Nigeria Executive Summary
…Nigerian end users agree that mobile services have favorably influenced every aspect of
their lives
3. Nigerian end users agree that mobile services have positively influenced every aspect of
their lives,
lives enabling them to connect with different people,
people access information,
information create
business opportunities, lower transaction costs and enhancing social interaction.
4. Around the world, Pyramid has identified numerous examples of initiatives using public and
private
i ffunding
di that
h lleverage mobile
bil services
i in
i social
i l programs, iimprove the
h operation
i off
various vertical industries and foster connectivity in remote areas.
4
Mobile Services in Nigeria
Table of Contents
Executive Summary
Pyramid Perspective
5
Mobile Services in Nigeria Transformational Role of Mobile Services
The evolution of the mobile services market around the world is driven by advances in the
areas of access networks, devices and applications
Key Aspects:
•Intense competition among vendors brings device
prices downwards
•Improvement in key features (size, definition, battery
life, camera, etc)
Key Aspects:
•Wider availability of embedded modules (WiMax, 3G)
•Declining prices for connectivity services
•Operators
Operators promoting bundled services MOBILE
Variety of Applications
•Evolution towards 3G and beyond MARKET
•Shared access and coverage of rural population
•Governments and NGOs supporting programs to
connect schools,
h l medical
di l centers, etc Key Aspects:
•Development of User-Generated Content (UGC)
•Virtual communities and cloud computing
•Changing
g gppatterns in entertainment drive advertising
g
investment towards mobile platforms
6
Mobile Services in Nigeria Transformational Role of Mobile Services
The global telecom market continues to grow at rapid pace, particularly in the area of
mobile services with subscriptions
p surpassing
p g 4.5bn in 2009 and veryy important
p potential
p
going forward in the area of mobile broadband (ie. Internet) services
10
9
8
Accesss lines (bn)
Pay-TV 1%
7
VoIP 20%
6
5 Fixed circuit-switched voice -3%
7
Mobile Services in Nigeria Transformational Role of Mobile Services
Pyramid forecasts that over 55% of mobile subscriptions in the world will be using 3G+
in the next three years
8
Mobile Services in Nigeria Transformational Role of Mobile Services
In Nigeria, the mobile industry has developed over the past decade driven by a successful
liberalization program and the overall potential of the market
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
b
•New telecom •February: •June: •Telecommun •October/ •November: •February: •January: •September: •May:
policy was Digital First national ications Act November: Two national NCC A national Gateway NCC awarded
enacted. mobile long‐distance 2003 was Three long‐distance introduced carrier Telecoms licenses in
licenses license was enacted. national operator unified license was Integrated the 2.3GHz
were offered to long‐distance licenses access awarded to Services’ band to four
•December:
awarded to
awarded to MTS First
MTS First operator
t b
became li
licenses. P t C bl & national
Prest Cable & ti l operators,
t
Auctions for
MTN, Mtel Wireless. licenses operative. These were Satellite TV long‐distance but
GSM
and Econet became granted to 13 Systems license discussions
licenses.
Wireless operative. companies in became are still
•September:
(later total, operative. ongoing to
Fourth GSM •March:
Vmobile, license and
license and including g finalize the
Celtel and •December: NCC issued
NCC issued
national All operators MTN, Zain, 3G UMTS •October: issue
now Zain). Multi‐Links
carrier had licenses to Etisalat
license introduced and MTN, Zain, launched
awarded to per‐second Starcomms. GloMobile services
GloMobile. g
billing. The earliest and Alheri
operative
ti Engineering
date for the
•November:
licenses was
Nitel’s •July:
July 2006.
national NCC awarded
carrier and fixed‐
i t
international
ti l •July: wireless
gateway Transcorp licenses
license buys 75%
became stake in Nitel
operative.
Source: NCC,
NCC Pyramid Research
9
Mobile Services in Nigeria Transformational Role of Mobile Services
Pyramid estimates that the Nigerian mobile services market has grown from 422,000 in
2001 to roughly 73m at the end of 2009
ubscriptions (millions)
Penettration of populaation
40%
60
•Intense competition, the 35%
50
proliferation of prepaid plans, low- 30%
cost handsets and the rapid 40 25%
expansion of mobile networks to
20%
different parts of the country are 30
Mobile su
the main drivers of growth in 15%
20
mobile subscriptions. 10%
10
5%
•The expansion of coverage to 0 0%
underserved areas by the smaller 2001 2002 2003 2004 2005 2006 2007 2008 2009
CDMA operators has also led to
increased competition, bringing •Going forward, due to intense competition and constant innovation
overall communication prices from mobile service providers, a greater number of people will see
down
down. value
l iin anddbbe iin a position
iti tto use mobile
bil services.
i P
Pyramid
id projects
j t
that Nigeria’s mobile subscriptions will surpass 128m by 2014, creating
a substantial user base for the development of the mobile applications
market.
Source Pyramid Research,
Research 4Q09 Mobile Forecasts
10
Mobile Services in Nigeria Transformational Role of Mobile Services
The availability of prepaid services has been a key driver of the expansion of Nigeria’s
mobile market; data services are only beginning to take off
ARPS (US$) $48.21 $47.56 $41.55 $29.94 $17.80 $13.65 $12.12 $11.26 $7.66
Data ARPS as
0.5% 0.7% 0.9% 1.1% 2.0% 3.0% 3.5% 5.7% 8.3%
percentage of total ARPS
Monthly minutes of use
223 162 136 119 89 70 53 51 46
((MOU))
Annual churn rate 2.0% 8.7% 18.5% 18.6% 26.8% 27.9% 48.4% 44.0% 41.8%
11
Mobile Services in Nigeria Transformational Role of Mobile Services
In US-dollar based revenue terms, the Nigerian mobile services market expanded at one of
the fastest rates in Africa for the past decade and is the second largest in the region
Size of the mobile market, nominal GDP per capita and mobile service revenue
CAGR, 2001-
2001-2009, Select African markets
80%
Nigeria
1-2009
Algeria
70% $6,235
$3,101
Mobille service reve nue CAGR 2001
60%
Ghana Senegal
50% $1,093 $716
0%
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000
GDP per capita
it (US$)
12
Mobile Services in Nigeria Transformational Role of Mobile Services
The explosion of the mobile industry in Nigeria has resulted in a series of positive effects
across the economy ranging from investment in networks to the creation of employment
Mobile services have multiple positive effects in an economy, most notably in emerging markets. Their
economic benefits extend beyond
y the investment that network operators
p allocate to license fees,, taxes
and network equipment and include the following factors:
End user spend money on mobile telecom services and devices allows a new industry to
flourish
Mobile operators create employment, both direct and indirectly, and invest in the
development of the labor force.
Mobile services have a wide economic impact in a country, since they enable end users to
conduct their daily business in a more effective manner, reducing the time and cost of
transactions, improving access to markets, commoditizing information and generally allowing
businesses to operate more efficiently.
13
Mobile Services in Nigeria Transformational Role of Mobile Services
According to Pyramid’s estimates, the annual revenue from mobile services represents
between 2% and 7% of African countries’ Nominal GDP; in Nigeria this ratio is close to 4%
Ghana
DRC
Senegal
Cote d'Ivoire
Nigeria
Cameroon
Tanzania
South Africa
Kenya
Botswana
Algeria
0% 1% 2% 3% 4% 5% 6% 7%
14
Mobile Services in Nigeria Transformational Role of Mobile Services
Mobile operators also contribute to the economy by directly and indirectly creating jobs to
provide and distribute their services; in Nigeria, we estimate there are as many as 3m
jobs related to this industry
15
Mobile Services in Nigeria Transformational Role of Mobile Services
In addition, the sale of airtime and SIM cards has driven various forms of entrepreneurship
Distribution on the streets and MTN and Glo points of sale, Nigeria
S
Source: P
Pyramid
id Research,
R h NCC
16
Mobile Services in Nigeria Transformational Role of Mobile Services
Pyramid Research estimates that capital investments in mobile networks and operations have accounted
for 80% of total telecommunications foreign capital investments (a total of more than $12bn by the
middle of 2008) since the Nigerian government successfully liberalized the industry in 2001.
As of March 2010, the NCC reported $18bn in telecom sector CAPEX, $16bn of which is invested by
mobile operators.
Source: Pyramid Research,
Research NCC
17
Mobile Services in Nigeria Transformational Role of Mobile Services
Mobile networks in Nigeria are in constant evolution; operators such as MTN, Zain and Glo,
have undergone a technological migration from 2G to 2.5G and are working towards 3G
100%
90%
80%
Total Terminals
70%
60%
3G+
50%
2.5G
40%
2G
% of T
30%
20%
10%
0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Note: For the purposes of this exhibit, the following categories apply:
•2G = GSM, TDMA, and CDMA One technologies
•2 5G = GPRS
•2.5G GPRS, EDGE
EDGE, and CDMA 1X 1X, technologies
•3G+ r= CDMA 200, UMTS, HSPA, Mobile WiMAX, and LTE technologies
18
Mobile Services in Nigeria Transformational Role of Mobile Services
Additional areas where mobile services can have an important impact include rural connectivity
projects, education, health, finance, agriculture, transport and entertainment applications
R
Rural
l Connectivity
C ti it Rural Telephony Program-
Program Uganda: Village Phone
Phone- train
train and support local and support local villagers to
villagers to provide mobile provide mobile based pay-
based pay-phone services phone services
19
Mobile Services in Nigeria Transformational Role of Mobile Services
Additional areas where mobile services can have an important impact include rural connectivity
projects, education, health, finance, agriculture, transport and entertainment applications
A i lt
Agriculture Cassava Growers Project-
Project Uganda: Grameen Market
disseminates market Information- disseminates
information in conjunction market information through
with information points and SMS, supported by Community
trade agents Knowledge Workers
Entertainment DSTV and MTN Mobile TV South Africa: Mxit: WAP based
Service- broadcasts content instant messaging and social
over a mobile network networking program
20
Mobile Services in Nigeria
Table of Contents
Executive Summary
Pyramid Perspective
21
Mobile Services in Nigeria Nigerian End Users’ Perception of Mobile Services
During 2009, Pyramid conducted a survey of over 1,500 mobile end users in Nigeria to
analyze the impact of mobile services in their daily lives
22
Mobile Services in Nigeria Nigerian End Users’ Perception of Mobile Services
60% of interviewees agreed that mobile services have positively influenced every aspect
of their lives including 35% who claim that a mobile phone has “dramatically improved all
aspects of their lives”
Q. What option
p best describes the impact
p of mobile services in your
y
daily life? Nigeria, 2009
100%
Having a mobile phone has
90% negatively impacted my life
80% Neutral
70%
Respondents
30%
Having a mobile phone has
20% dramatically improved all aspects
of my life
10%
0%
Male Female
23
Mobile Services in Nigeria Nigerian End Users’ Perception of Mobile Services
Furthermore, more than 80% of our sample has seen financial gains from using mobile
services through
g a combination of saving
g on communications expenses
p and generating
g g
additional income by way of staying connected
Q. Have you
Q y seen a positive
p financial impact
p on your
y life from the use
of mobile services? Nigeria, 2009
100%
No financial benefit
90%
80%
60%
50%
Benefited from additional
40% income
30%
Benefited both from
20% savings and additional
income
10%
0%
Metropolitan South East North
24
Mobile Services in Nigeria Nigerian End Users’ Perception of Mobile Services
End users from different age groups point out the positive financial impact of using a
mobile phone ranges from increased opportunities to find jobs to savings in transportation
and better access to information
Q. What type of financial benefits do you derive from mobile phone use? Nigeria, 2009
Age 46-69 Age 36-45
Age 26-35 Age 16-25
Job opportunity
25
Mobile Services in Nigeria Nigerian End Users’ Perception of Mobile Services
Nigerians also rely on mobile services to conduct activities related to education, health
and entertainment activities
Education
EMERGENCY/HEALTH
26
Mobile Services in Nigeria Nigerian End Users’ Perception of Mobile Services
In the area of work related activities, mobile services are leveraged by individuals living in
both rural and urban areas
Q. For which of the following activities do you leverage your mobile phone?
Nigeria, 2009
Rural
Mobile as modem for PC Internet access Urban
Personall organiser
i ((calendar,
l d alarms,
l contacts))
Email access
Accessing information
Speaking to colleagues
Source: Pyramid Research survey of 1,500 mobile service users in Nigeria, 2009
27
Mobile Services in Nigeria Example of Social Initiatives
In fact, for individuals based out of remote areas, mobile services are often the sole media
of communication and a source of added income
Rural Telephony Project startup package and a Key Aspects of the Rural Telephony Project in
phone lady on the outskirts of Suleja
Suleja,, a city of Nigeria
105,000 inhabitants north of Abuja
The program is a cooperation between the Growing
Businesses Foundation (GBF), a Nigerian NGO, MTN
Foundation (MTNF), which is the CSR arm of MTN
Nigeria,
g , the International Finance Corporation
p ((IFC))
and a group of small communal microfinance
institutions (MFIs).
A startup package, provided by MTNF, includes loans
that range between N14,200 and N21,400 ($95 and
$140) depending on optional material in the package
$140), package,
payable over a six-month period, and carry a 15%
annual interest rate.
The startup packages include a Nokia phone, an MTN
SIM card,, an optional
p antenna to boost the wireless
signal, a solar charger, subsidized MTN airtime,
promotional material. The promotional material is
comprised of a table, an umbrella, chairs, banners
showcasing call rates, a hat and a T-shirt.
To date,
date the program has benefited 1,500
1 500 Phone Ladies
in rural and semirural Nigeria. These beneficiaries
operate in 21 of the country’s 36 states.
S
Source: Pyramid
P id Research,
R h 2009
28
Mobile Services in Nigeria Example of Social Initiatives
Source: GBF,
GBF Pyramid Research
29
Mobile Services in Nigeria
Table of Contents
Executive Summary
Pyramid Perspective
30
Mobile Services in Nigeria Pyramid Perspective
Going forward, Nigerian end users expect to see a wider variety of data-based applications
in the market; in the agriculture sector, for instance, we identified interest in a
combination of information and transactional services
Q. W
What
at new
ew mobile
ob le appl
applications
cat o s would you like
l e to use in the
t e future?
utu e?
Nigeria’s rural users
Agriculture-related information
Source: Pyramid Research survey of 1,500 mobile service users in Nigeria, 2009
31
Mobile Services in Nigeria Pyramid Perspective
Overall, the future development of the mobile market in Nigeria will be driven by
collaboration among industry players, the local government and international organizations
32
Mobile Services in Nigeria
THANK YOU.
Gabriela Baez
Managing Director
Email: gbaez@pyr.com
Badii Kechiche
Sr. Analyst
Email: bkechiche@pyr.com
bkechiche@pyr com
PYRAMID RESEARCH UK
Tel: +44-20-7560 4471
Fax: +44-20-7560 4485
PYRAMID RESEARCH US
Tel.: + 1 617 871 1900
Fax: + 1 617 871 1933
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