the federal government of nigeria federal ministry of communication technology investment...

THE FEDERAL GOVERNMENT OF NIGERIA FEDERAL MINISTRY OF COMMUNICATION TECHNOLOGY

INVESTMENT OPPORTUNITIESIN THE NIGERIAN ICT SECTOR

presentation made at the: HIGH LEVEL INVESTMENT SUMMIT (HLIS)

Tuesday July 31, 2012

MRS OMOBOLA JOHNSONHONOURABLE MINISTER FOR COMMUNICATION TECHNOLOGY

Outline

Nigeria’s 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

Slide 2© 2012 Federal Ministry of Communication Technology

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

SECTOR CONTRIBUTION TO GDP (Q1 2012)

Rank Percentage

Agriculture 1 35.14

Wholesale & Retail Trade

2 22.92

Crude petroleum & Natural Gas

3 17.18

Telecommunication & Post

4 5.83

Source: “Q1 2012 GDP Report “National Bureau of Statistics. See http://www.nigerianstat.gov.ng/pages/download/69

Drivers of the Nigerian Economy as at Q1 2012

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 nation’s GDP

5.83% equates to N75.52bn (US$0.47bn)

http://www.nigerianstat.gov.ng/pages/download/69

The Nigerian ICT Industry: estimated size by category


Mobile Network

Operators

Satellite Operators

Fixed WirelessOperators

Fixed Wire-lineOperators

Internet Service Providers

Device Sales & Distribution

Device Maintenance & Repairs

Device Assembly

Infrastructure Services

Value Added Services

Training & Education

Transaction Services

Equipment Maintenance & Repairs

Equipment Sales &

Distribution

Equipment Assembly

Call Center Operations

Research & Development

Support Services

Software Sales &

Distribution

Software Development

Access Provision

Business Process Outsourcing

Converged Services (Data, voice & media)

Annual Maintenance & Support (servers & storage)

Software Maintenance & Support

SoftwareInstallation & Customization

Infrastructure Service Providers

US$1.6bnspent on Hardware

US$412mspent on Software

US$615mspent on Services

US$18bn invested in telecoms sector

of which US$16bn invested in mobile

The Nigerian ICT Industry: growth prospects by category


Legend High growth

Medium growth

Low growth

Mobile Network

Operators

Satellite Operators

Fixed WirelessOperators

Fixed Wire-lineOperators

Internet Service Providers

Device Maintenance & Repairs

Device Assembly

Infrastructure Services

Training & Education

Transaction Services

Equipment Maintenance & Repairs

Equipment Sales &

Distribution

Equipment Assembly

Call Center Operations

Research & Development

Support Services

Software Development

Access Provision

Business Process Outsourcing

Converged Services (Data, voice & media)

Annual Maintenance & Support (servers & storage)

Software Maintenance & Support

SoftwareInstallation & Customization

Software Sales &

Distribution

Value Added Services

Infrastructure Service Providers

Device Sales & Distribution

FGN Priorities for the ICT Industry


INFRASTRUCTURE

INCLUSIVEDEVELOPMENT

JOB CREATION

E-GOVERNMENT

SUSTAINING A SOUND REGULATORY ENVIRONMENT

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

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-over-

powerline)– Deployment of wireless broadband infrastructure– Satellite networks (in particular those providing connectivity to rural

areas)


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 Slide 9Note: 1Nokia 1616 classic

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 Bank’s 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


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


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 Government’s 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.


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


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 Europe’s leading provider of ICT services


THE FEDERAL GOVERNMENT OF NIGERIA FEDERAL MINISTRY OF COMMUNICATION TECHNOLOGY

INVESTMENT OPPORTUNITIESIN THE NIGERIAN ICT SECTOR

presentation made at the: HIGH LEVEL INVESTMENT SUMMIT (HLIS)

Tuesday July 31, 2012

MRS OMOBOLA JOHNSONHONOURABLE MINISTER FOR COMMUNICATION TECHNOLOGY

the federal government of nigeria federal ministry of communication technology investment...

Documents

bn slide

services us

software us

mobile slide

new infrastructure

growth investment

nigerian economy

hardware us