THE FEDERAL GOVERNMENT OF NIGERIA

FEDERAL MINISTRY OF COMMUNICATION TECHNOLOGY

INVESTMENT OPPORTUNITIES
IN THE NIGERIAN ICT SECTOR
presentation made at the:

HIGH LEVEL INVESTMENT SUMMIT (HLIS)

MRS OMOBOLA JOHNSON

HONOURABLE MINISTER FOR COMMUNICATION
TECHNOLOGY
Tuesday July 31, 2012

Outline
Nigerias Infrastructure Gap
The Nigerian ICT Industry
FGN Priorities for the ICT Industry
Investment Opportunities

Broadband
End-user Devices
Value-Added Services
Innovation
Broadcast Infrastructure and Devices
Postal Services

Conclusion
2012 Federal Ministry of Communication Technology

Slide 2

Infrastructure drives growth

Investment in infrastructure positively correlated with

economic development (especially in developing

countries)
Significant gaps exist in physical infrastructure [transport,
power, ports, ICT etc.] and social infrastructure
[education, health, security etc.]
Resulting in significant investment opportunities

Investment requirement for first National Implementation

Plan (2010-2013) is approx N32trn (US$212bn)1

FDI projects in Africa have grown at a compound rate of
nearly 20% since 2007; grew by 27% from 2010 to 20112
About US$72bn (46bn) invested in new infrastructure per year
by African governments and private sources
Telecom-related infrastructure accounts for about 30% of this
US$21bn (13bn)
2012 Federal Ministry of Communication Technology

Slide 3

The Nigerian ICT Industry:

fastest growing sector in the economy
In the first quarter of 2012, the Telecommunication & Postal sector
was the primary driver of growth of the Nigerian economy. The sector
is the fourth highest contributor to the nations GDP
SECTOR

CONTRIBUTION
TO GDP (Q1
2012)
Rank

Percentag
e

Agriculture

35.14

Wholesale &
Retail Trade

22.92

Crude petroleum
& Natural Gas

17.18

Drivers of the Nigerian Economy as at

Telecommunicatio
4
5.83
n & Post
5.83% equates to N75.52bn (US$0.47bn)

2012 Federal Ministry of Communication Technology

Source: Q1 2012 GDP Report National Bureau

of Statistics.
See
http://www.nigerianstat.gov.ng/pages/download/6
Slide 4

The Nigerian ICT Industry:

estimated size by category
US$18bn
of which

Converged Services
(Data, voice & media)
Transaction
Services

US$615m

spent on Services

US$16bn invested inUS$1.6bn

mobile

Value
Added
Services

Mobile
Network
Operator
s

Device Assembly

Device Sales
& Distribution
Access Provision

Internet Service
Providers

Satellite Operators

Device Maintenance
& Repairs

Annual Maintenance & Support

(servers & storage)

Fixed Wire-line
Operators
Call Center Operations

Fixed Wireless
Operators

Software Maintenance & Support

Software
Installation &
Customization

spent on Hardware

Infrastructure
Service Providers

Training & Education

Research &
Development

invested in telecoms sector

Software
Sales &
Distribution

Equipment Equipment
Sales &
Assembly
Distribution
Equipment Maintenance
& Repairs

Support Services

Infrastructure Services

Business Process
Outsourcing

US$412m

Software Development

spent on Software

2012 Federal Ministry of Communication Technology

Slide 5

The Nigerian ICT Industry:

growth prospects by category
Legen
d
Converged Services
(Data, voice & media)
Transaction
Services

High growth
Medium growth
Low growth

Infrastructure
Service Providers

Value Added
Services

Training & Education

Mobile
Network
Operators

Access Provision

Device Assembly

Device
Sales &
Device Maintenance
Distribution& Repairs

Satellite Operators
Internet Service
Providers
Research &
Development

Annual Maintenance & Support

(servers & storage)

Fixed Wire-line
Operators
Call Center Operations

Equipment
Sales &
Distribution

Fixed Wireless
Operators

Software Maintenance & Support

Software
Sales &
Software
Installation & Distributi
on
Customization

Equipment
Assembly
Equipment Maintenance
& Repairs

Support Services

Infrastructure Services

Business Process
Outsourcing

Software Development

2012 Federal Ministry of Communication Technology

Slide 6

FGN Priorities for the ICT Industry

INFRASTRUCTURE
INCLUSIVE
DEVELOPMENT
JOB CREATION

E-GOVERNMENT

Connecting Nigeria
Speed and Quality of
Service (QoS)
Connecting Nigerians
Bridging the Digital Divide
Local Value Added

Domestic Participation in the New

Economy

Transparency & Efficiency in

Governance & Citizen
Engagement

SUSTAINING A SOUND REGULATORY ENVIRONMENT

2012 Federal Ministry of Communication Technology

Slide 7

Investment Opportunities:
Broadband
FGN Policy Focus and Priority:
Accelerated roll-out of robust, reliable, and cost effective ICT
infrastructure to increase citizen access to ICTs.
Market Indicators:
Four undersea fibre-optic cables with combined design capacity of
approx 10 TBps
<100,000km of terrestrial fibre-optic cable
20,000 base transceiver stations
Average download speed of 3.09MBps
About 52 million Internet users; internet penetration of 33%;
Broadband penetration of 6%
Opportunities exist for entities active in:
Deployment of terrestrial fibre-optic networks (including fibre-overpowerline)
Deployment of wireless broadband infrastructure
Satellite networks (in particular those providing connectivity to rural
areas)
2012 Federal Ministry of Communication Technology

Slide 8

Investment Opportunities:
End-user Devices
FGN Policy Focus and Priority:
Increasing adoption of ICT tools by the population and increasing
local participation in relevant sub-sectors of the ICT industry.
Market Indicators:
Consumer spending in 2010 was US$115bn; projected to increase
to US$167bn by 2020
PC penetration of 4.5%
Four PC assembly plants in country; producing an average total of
130,000units. Of all PCs sold in Nigeria in 2011, 30% were
assembled/manufactured in the country
Average cost of low-end laptop is N50,000 (US$310); average cost
of low-end mobile phone is N5,000 (US$31)
All mobile phones used in Nigeria are imported
Opportunities exist for entities active in:
Assembly and manufacturing of personal computers, laptops and
mobile devices (tablets, phones etc.)
After-sales support (Digital Service Centre)
2012 Federal Ministry of Communication Technology

Note: 1Nokia 1616 classic

Slide 9

Investment Opportunities:
Value-Added Services
FGN Policy Focus and Priority:
Contribute to the scale and scope of the domestic Information
Technology Enabled Services (ITES) market (and facilitate its
growth)
Market Indicators:
Growing domestic data centre market and emerging position as
regional hub for data centre services in West Africa
Outsourcing market estimated at US$1bn in 2011
Increase in eGovernment services establishment of Government
Contact Centres
Pilot of Central Banks Cashless Nigeria initiative
16 Mobile Money Operators licensed
Opportunities exist for entities active in:
Data centre deployment and management
Application hosting / Cloud computing
Business Continuity / Disaster Recovery
Internet Service Provision
2012 Federal Ministry of Communication Technology

Slide 10

Investment Opportunities:
Innovation and Entrepreneurship
FGN Policy Focus and Priority:
Promote and support innovation and entrepreneurship in the ICT sector
Stimulate and support domestic value-added

Market Indicator:
Market for software in Nigeria estimated to be worth US$6bn
Most new jobs in Nigeria will be created at the intersection of ICTs and
services
ICT businesses represented the second largest number of YouWIN
awardees

Otigba Computer Village (Lagos State) is largest cluster of ICT traders

Increasing adoption of innovative ICT solutions: Growth Empowerment
Scheme (GES) for distribution of seeds and fertilizers; Mobile
Authentication Service (MAS) for verifying authenticity of drugs

Opportunities exist for entities active in:

Incubators/Innovation Hubs
Software Development
Venture Capital/Private Equity Investments
2012 Federal Ministry of Communication Technology

Slide 11

Investment Opportunities:
Broadcast Infrastructure and Devices
FGN Policy Focus and Priority:
Partner with the private-sector to ensure that the transition to digital
broadcasting is completed within the specified time frame and with
minimal disruption to the viewing public.
Market Indicators:
20 million households estimated to have at least one television set
Current subscription to pay TV is low (<2million); high demand for
low-cost packages aimed at less affluent households
Global timetable and acceptance of the migration presents a captive
market, and the need to secure the rights of citizens to information
increases Governments commitment to the transition
Opportunities exist for entities active in:
Signal distribution
Broadcast equipment suppliers
End-user device manufacturers, installers and after-sale support
Content aggregators, producers, distributors etc.
2012 Federal Ministry of Communication Technology

Slide 12

Investment Opportunities:
Postal Services
FGN Policy Focus and Priority:
Reform the postal sector and utilise the Public Postal Operator in
achieving social, financial and digital inclusion

Market Indicators:
National Postal infrastructure provides geographic spread and
accessibility that are not matched by any other single public or
private institution
Comprised of over 3,000 physical locations spread across over two
thirds of LGAs

Annual turnover of the courier industry is estimated to be over

N350billion (about US$2.2bn)

Opportunities exist for entities active in:

Postal operations
Retail financial services (Post Banks)
Digital inclusion through public access venues
2012 Federal Ministry of Communication Technology

Slide 13

Conclusion:
current investments
and expressions of interest
MoU signed with the world's leading mobile phone supplier.
Partnership includes establishment of an mLab

Silicon-valley firm to invest in Innovation Fund specifically targeting

technology start-ups
Global IT companies to establish (engineer) certification labs in the
country to boost high-end skill development
Large multinational technology company to establish Skill
Development and Research Institute
Digital TV Company to invest US$2bn in transition to digital
broadcasting (total investment in Nigeria to reach US$10bn)
Continued investment by mobile operators to expand reach and
improve quality of networks; over US$10bn invested so far by the
largest mobile operator
Private equity firm finalising acquisition of three CDMA operators
Various ICT services and solutions companies seeking to establish in
Nigeria including one of Europes leading provider of ICT services

2012 Federal Ministry of Communication Technology

Slide 14

THE FEDERAL GOVERNMENT OF NIGERIA

FEDERAL MINISTRY OF COMMUNICATION TECHNOLOGY

INVESTMENT OPPORTUNITIES
IN THE NIGERIAN ICT SECTOR
presentation made at the:

HIGH LEVEL INVESTMENT SUMMIT (HLIS)

MRS OMOBOLA JOHNSON

HONOURABLE MINISTER FOR COMMUNICATION
TECHNOLOGY
Tuesday July 31, 2012