the federal government of nigeria federal ministry of communication technology investment...
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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
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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
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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
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© 2012 Federal Ministry of Communication Technology Slide 4
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)
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The Nigerian ICT Industry: estimated size by category
© 2012 Federal Ministry of Communication Technology Slide 5
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
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The Nigerian ICT Industry: growth prospects by category
© 2012 Federal Ministry of Communication Technology Slide 6
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
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FGN Priorities for the ICT Industry
© 2012 Federal Ministry of Communication Technology Slide 7
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
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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)
© 2012 Federal Ministry of Communication Technology Slide 8
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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
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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
© 2012 Federal Ministry of Communication Technology Slide 10
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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
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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.
© 2012 Federal Ministry of Communication Technology Slide 12
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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
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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
© 2012 Federal Ministry of Communication Technology Slide 14
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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