ICT investment opportunities in nigeria - news release

News Release
March 12, 2010
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Nigerian ICT Market Gears Up for Massive Investment

(Oakville, Ontario – March 12, 2010) — The Nigerian ICT sector is poised for substantial growth, which will attract massive investment into the sector, according to a new study published by Technology Strategies International in partnership with BroadGroup TMT Ventures. The report, titled “Investment Opportunities in the ICT Sector in Nigeria: 2010”, says that even though Nigeria became the largest mobile market on the African continent in 2008, it still has a mobile penetration level of less than 50%, suggesting that there is ample room for expansion of the market. Penetration in the fixed line segment is dismal and there is a vast opportunity to improve internet penetration, the report points out.

“One of the things fuelling the growth in the Nigerian ICT sector is the imminent illumination of two undersea cables, which will increase international bandwidth dramatically”, says Christie Christelis, President of Technology Strategies International.  “The improvement in international connectivity will have a major impact on business in Nigeria.”

At the other end of the spectrum, there is still huge latent demand for mobile phone services, says Christelis. Operators in Nigeria are experiencing similar challenges to operators in other emerging economies, with declining ARPUs as the subscriber base broadens to include poorer segments. But companies such as MTN have demonstrated that even at ARPU levels of $12 – and declining – astute operators are able to make above superior margins, he says.

Christelis points out that the recent political crisis surrounding President Y’Ardua’s ill-health, and the instatement of Vice President Goodluck Jonathan as acting President, is a temporary setback for the country, and is bound to make investors jittery about the prospects of investing in Nigerian technology companies. But he says that, provided the political transition is well managed, it is unlikely to impede growth in the ICT sector in Nigeria. The Nigerian Government’s Vision 2020 initiative is creating an environment conducive to high growth.

“There is huge momentum behind the growth, and even through the recent global financial crisis investors have managed to source funds for good investment opportunities in Nigeria”, he says. “One example is the capitalization of the infrastructure sharing venture, Helios Towers. The Helios business model could well be rolled out across other emerging economies.”

Key opportunity areas identified in the report include expanding the reach of the undersea cables, building out mobile infrastructure, turning investments into fixed wireless infrastructure into sustainable businesses, expanding the retail network for mobile, fixed wireless and internet services, and in electronics manufacturing. Christelis says that the Nigerian Government is particularly keen to promote an indigenous electronics manufacturing and is doing much to attract investor interest.

Christelis warns, however, that the Nigerian ICT sector is complex and investors must give due consideration to the characteristics of the Nigerian market when evaluating business plans. The sensitivity of the economy to oil price fluctuations can result in a volatile foreign exchange. Regionalism has a big impact on the extent to which services can be rolled out. And corruption weighs heavily on investors’ minds, he says. The fact that the market is liberalized, and hence very competitive in certain segments, provides some safeguards to investors.

The 53 page report provides a comprehensive review, analysis and forecast of investment opportunities in the ICT sector in Nigeria. It analyses the investment environment in the country in the context of recent political and economic developments, and provides a balanced assessment of growth opportunities in the country. Detailed forecasts are presented for fixed line/fixed wireless communications, mobile communications and internet usage. Specific investment opportunities are identified and categorized in terms of scale of investment.

About Technology Strategies International
Technology Strategies International is a leading Canadian technology market analysis and strategy firm based in Oakville, Ontario.  Established in 1995, the company has been analysing emerging market investment opportunities for the past decade. For more information please see www.tsiglobalnet.com/reports.html.

About BroadGroup TMT Ventures
BroadGroup TMT Ventures is an international consulting firm specializing in providing professional advice, creating knowledge platforms through publishing and events and connecting information communities. It has practices in data centres, cloud computing, dark fibre, and TMT finance and investment, with offices in London, Singapore and Buenos Aires. For more information please see www.tmtfinance.com.

Media Contact Information:
For interviews please contact:
Christie Christelis,
President,
Technology Strategies International
Tel: +1 416 628 0796
e-mail: christie@tsiglobalnet.com
www.tsiglobalnet.com

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