Transcript INVESTMENT OPPORTUNITIES IN THE NIGERIAN ICT SECTOR

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
 Nigeria’s Infrastructure Gap
 The Nigerian ICT Industry
 FGN Priorities for the ICT Industry
 Investment Opportunities
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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 nation’s GDP
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
Drivers of the Nigerian Economy as at Q1 2012
5.83% equates to N75.52bn (US$0.47bn)
Source: “Q1 2012 GDP Report “National Bureau of Statistics.
See http://www.nigerianstat.gov.ng/pages/download/69
© 2012 Federal Ministry of Communication Technology
Slide 4
The Nigerian ICT Industry:
estimated size by category
US$18bn invested in telecoms sector
of which
Converged Services
(Data, voice & media)
US$615m
spent on Services
Transaction
Services
Device Assembly
Mobile
Network
Operators
Value Added
Services
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
Equipment
Sales &
Distribution
Fixed Wireless
Operators
Software Maintenance & Support
Software
Installation &
Customization
spent on Hardware
Infrastructure
Service Providers
Training & Education
Research &
Development
US$1.6bn
US$16bn invested in mobile
Software
Sales &
Distribution
Equipment
Assembly
Equipment Maintenance &
Repairs
Support Services
Software Development
Infrastructure Services
Business Process
Outsourcing
US$412m
spent on Software
© 2012 Federal Ministry of Communication Technology
Slide 5
The Nigerian ICT Industry:
growth prospects by category
Legend
High growth
Medium growth
Converged Services
(Data, voice & media)
Low growth
Infrastructure
Service Providers
Device Assembly
Transaction
Services
Value Added
Services
Training & Education
Mobile
Network
Operators
Device Sales &
Distribution
Access Provision
Device Maintenance
& Repairs
Satellite Operators
Internet Service
Providers
Research &
Development
Fixed Wire-line
Operators
Call Center Operations
Equipment
Sales &
Distribution
Fixed Wireless
Operators
Software Maintenance & Support
Software
Installation &
Customization
Annual Maintenance & Support
(servers & storage)
Software
Sales &
Distribution
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 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
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 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
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
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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
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