Boston, MA -- (SBWIRE) -- 03/13/2013 -- 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.

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Key Data

- 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.

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