Nigeria telecom industry is buzzing with cash at the moment. Loads of money to be made.

Press Release From the Presidential Research and Communications Unit:

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Gains of telecom investment
May 24, 2005, 17:00

The Federal Government on 23 May in Abuja declared that investments in the Nigerian telecommunications industry have witnessed phenomenal growth with a 50 percent increase from four billion dollars in 2003 to eight billion dollars at the end of 2004.

Minister for Communications, Chief Cornelius Adebayo, who stated this at his ministerial media briefing, also disclosed that his Ministry generated N294.5 million within the last two years, which has been remitted into the Federal Government treasury.

He attributed such growth to the current policy of deregulation and liberalisation, which continues to attract foreign investment and accelerate private sector development.

This has subsequently led to a remarkable increase in mobile telephone and NITEL lines, which currently stand at approximately 1.1 million and 11 million respectively.

Adebayo praised all the parastatals under his Ministry for their efficiency, especially the Nigeria Communications Commission (NCC) which he said will continue to compel all operators to improve on the quality of their services.

He restated his desire to roll out additional 10 million telephone lines before the end of the year.

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Source: http://www.nigeriafirst.org/article_4046.shtml

That translates to about 110 trillion naira. Man, how are we going to make money out of this, apart from selling recharge cards and making phone calls?

How much of that money went into the pockets of private individuals who have no interest in contributing to the economy? (I'm talking about bribery and corruption here ...)

For a country the size of nigeria thats not that much so alot more money can be made

For instance telstra (main aussie telco) is partly (51%) owned by the government who wants to sell and it is currently valued at a price of just over 36 billion dollars, which is a lot of money for not even a whole company.
Add that to the fafct they share top spot with another company (optus) worth similar values combined with alot of other providors (smaller but still large) you can see just how much money can be made off it (also we have a population of 20 million)
So perhaps if everything goes well they can make a lot of money off telecommunications and see that it can be profitable which will eventually bring reliable infastructure in (hopefully)

I agree with Hidden Hunter's analysis there's still a lot to be made from the Nigerian telecoms industry considering the fact that we have about 12 million mobile lines and 500,000 fixed lines for a population of about 120 million.

Money can be made from this sector when people get acquainted with the latest technology and modes of deployment which means that Nigerians abroad who are experienced in this sector should endeavour to come home and impart thier knowledge on others by investing.

The money 'to be made' in the Telecom sector being made off Nigerians ...

This article, however, refers to investments and not returns.

Seun there are lots of peripheral of telcom industry where ordinary Nigerians with little ingenuity can make money. For instance, in Europe and America ringtones and logos sector of the mobile industry is several million dollar worth by itself. But we tend to wait until some south african will come to show us the way.

Why are ordinary Nigerians contented with selling recharge cards only? Why not lease some dedicated imbound number for sms messages from the telcoms and then you can provide services like instant news, competition, ringtones & logos etc with a reverse billing method. Even you can help people carry out technical setting for their mobile (e.g setting up Wap) by letting them send an SMS to a dedicated number and you can have the settings send back to them.

At any rate for investment to hit $8billion it means the investors are expecting to make back their money. They are not throwing it down the drain. And definitly it affect everybody as it means more employment from building more infrastructure to staffing call centers etc.

Why not lease some dedicated imbound number for sms messages from the telcoms and then you can provide services like instant news, competition, ringtones and logos etc.

I have considered it in the past. You should too.

The networks, particularly MTN and Globacom, seem have conspired to make what you're describing an extremely expensive venture. MTN demands up to 80% or more of your revenue while Vmobile demands 'just' 60%. In addition, you are responsible for advertising costs and you'll pay a set-up fee and monthly rental fee.

For MTN and Vmobile, see:
http://www.vmobile-nigeria.com/wasp.htm ("Wanna be a content provider?"
http://www.mtnonline.com/csp/index.asp ("Be a content service provider?"

For Glo and MTel, well, I guess it depends on who you know.

I think that cellular phones and accessories should be manufactured within Nigeria and not just imported. Comments?

When the opportunities for investment exist as we have Nigeria, more companies will be encouraged to invest. Some companies from the Asian countires are planning to invest in the manufacture of handset and accessories considering the fact that many people are yet to own them.

@ Seun: Return on investment can only be achieved after investment so the 'money to be made' is after investing in this sector.

Content providers are beginning to make more money than operators all over the world therefore MTN and Vmobile can only restrict people for a short while. we can come up with services where people can shop and pay bills through the internet because people want to do more things with their phones than just to make and receive calls.

A time will come when people will prefer to subscribe to an operator because of the services he has to offer rather than ridiculous offers on low tariffs when the quality of service is poor

[size=13pt]Nigeria: S. African Telkom to Buy 75% Stake in Multilinks[/size]


This Day (Lagos)

March 21, 2007
Posted to the web March 21, 2007

Shina Badaru Contributing Editor
Lagos

South Africa's fixed line operator, Telkom would soon close an acquisition deal in which it will pay $200 million for 75 per cent stake in Multilinks, Nigeria's pioneer private telecoms operator (PTO).

Investigations reveal that both parties are tying up the final details of the sale, having been granted regulatory approval by the Nigerian Communications Commission (NCC), for the proposed change in ownership structure of Multilinks.

Telkom's talk with Multilinks is coming after MTN Nigeria acquired another PTO, VGC Commu-nications Limited, for $65 million.

Executive Director, Multilinks, Chief Ezekiel Fatoye, confirmed on phone yesterday that NCC has granted an "anticipatory approval" for both parties to proceed with the proposed sale.

Based on licensing stipulations, operators have to obtain clearance from NCC when they plan to change ownership structure of their business.

According to him, "we have already obtained an anticipatory approval from NCC to proceed with our discussions with Telkom of South Africa."

Although did not volunteer additional information on the depth of shareholding to be acquired by Telkom but said both parties hope to conclude talks, "within the next two months."

According to him, "what has happened is that they (Telkom) have expressed interest but we have not concluded yet."

Asked the volume of shares being unbundled by the current investors in the telecoms business, Ezekiel stated that, "if you say they are taking 75 per cent, it means that everybody here will be affected."

Speculations have been rife that Vodacom, South Africa's top mobile operator, has been in talks with some Nigerian operators including Multilinks.

This followed a botched acquisition of controlling stakes in Vmobile (now Celtel Nigeria) and lately, emerging indications that it offered $150 million for the sector's last GSM licence that was sold to Mubadala of the United Arab Emirates (UAE) in January.

Multilinks' confirmation of the proposed deal with Telkom may have put paid to industry speculations that it was in discussions with Vodacom. Telkom and UK's Vodafone, have substantial stakes in Vodacom which is exploring emerging stakes in new markets beyond South Africa.

Multilinks, which was started by an Indian businessman, C.K. Ramani, who also doubles as Managing Director/CEO of the company is chaired by industrialist, Lema Jibrilu.

It flagged off commercial service in December 1997 to compete with the then monopoly of the Nigerian Telecommunication Limited (NITEL) in the fixed-line service arena.

It is the pioneer private sector telephony service to emerge in the Nigerian telecoms market in following the liberalisation of the sector in 1992 by the military administration of General Ibrahim Babangida.

In June 2006, Multilinks announced that it had obtained a Unified Access Service Licence (UASL) allowing operators offer a bouquet of services ranging from voice, internet and data.

UASL, which was introduced by NCC after the expiration of the five-year market exclusivity granted mobile operators that emerged in the telecoms market after the January 2001 GSM licence auctions is making a profound impact on the competitive telecoms market as it allows former fixed-line operators to extend their limited mobility and explore technological advancements to deploy services across the country.

Multilinks, the first operator to introduce the CDMA 2000 1X technology supporting wireless telephony and internet services, said last year that it has recorded over 100,000 subscribers and projected to grow the number to over 500,000 by the end of 2006.

While the company's current subscriber base was yet to be confirmed, NCC said over 34 million combined fixed and mobile lines have been connected at the end of January, this year.

Competition has since stepped up in the Nigerian market with four national mobile GSM providers by user base: MTN, Glomobile, Celtel Nigeria and M-tel. A fifth GSM and UASL licences was in January sold to the Mubadala for $400 million.

In addition to the two national carriers, NITEL and its competitor, Globacom, there are over 20 operators offering fixed telephone services, including Fixed Wireless Access (FWA) and CDMA-based fixed and mobile service providers.

Telkom holds South Africa's dominance in fixed-line service as well as international connections to and from the country on the SAT3 and SAFE cables accounting for the majority of the country's international bandwidth.

The company is currently the largest provider of broadband in South Africa, with over 120,000 subscribers at last count in 2005.

They won't stop until they buy out every company

The Government needs to intervene into these affairs and instate "GOLDEN SHARES".

Call me naive, but I don't think S.Africa would welcome such investments by Nigerian companies

Call me naive, but I don't think S.Africa would welcome such investments by Nigerian companies

Nigerian companies are not strong enough(or their managers are not smart enough) to buy out companies in other parts of the world! they need govt help

remember Nigeria is open for business its a good thing (except for defence)

My problem, is that Nigerian companies aren't as good as they should be, and that S.A companies are taking advantage of this weakness. This isn't a bad thing but it
is when the investor is more interested in making money for the home branch than in improving services in the country of operation(Nigeria)
They can choose to invest as you said (Nigeria is open for business) but they should be rady to focus the needsand wants of the consumers.
If users of MTN for example aren't satisfied with the service then what was the benefit of the company coming into the Nigerian market?

Also, even if the companny is ready to up the standards, the government should be ready to accept the consequences of a Private or Government owned sector, controlled by "Foreign Investors"

This is not some stupid opinion, the fact is Nigerian companies need to step up immediately and the Government needs to build centers that can instruct people
on business ethics and so on

Just wait and see. In the few years from now all the companies will come back to Nigeria owned.

If you notice Nigerian operators are slow when it comes to technology improvement. All the people investing in those area in the early days, should I say they know little or they know the right things to do but they are scared of investing and loosing.

After the 3G upggrade, every other investments are cheap till they get beyond WiMAX. And before then I believe the techy thinkers might have grown and ready to take over.

It is good to know the best about what you want to do. And I believe all is coming down to one file. Take a look at UK & America, there are foreign investor over there too and after the government realises that they can handle the biz they give out an offer in other to regain there property.

So just chill for a while.