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GSM Business in Nigeria - How viable for new entrants?

GSM in Nigeria

The right of excusivity given to current operators expires in January 2006, do you think the Nigerian market is saturated? Would it make business sense for anyone to vie for a new licence?

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A large chunk of Nigeria's 120 million population lives in rural places. The incumbent operators had made an eloquent statement that they intended covering ONLY the cities. NCC had to force them to spread their coverage by stipulating that they must cover at least 5% of each geo-political regions in their licences.  Even at that, the vast majority of Nigerians living in rural areas are still waiting to be served.

I foresee a robust market for rural telephone next year, infact, i have a feeling that NCC will issue about 3 Licences for rural coverage by next year. The world bank is eager to provide telephone service to rural areas thinking that this will be the only panacea for poverty. World bank is even going a step further to provide loan facilities for people who want to start some kind of phone related business in rural areas at zero interest rate.

I think that there is still enough room for new entrants in the GSM biz especially in rural coverage.

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I think it will be viable for a new entrant considering the fact that unified licensing will be adopted in February 2006.

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The issue is this, taking the stats, of the 120 million Nigerians, many are in the aged (very aged bracket) that they dont need or even know how to use, there are also the children below use age, this is apart from the fact that within the use age there are some that can not afford it. Now, the 12million total we talk about now is also inclusive of operator marketing hypes, and many people have 2,3 or even 4 lines. The market is still open and unsaturated, but is it truly as unsaturated as we always make it out to be?

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The market is not saturated of course. At its stand we have 12 million lines, the potential is 50-80 million conservative estimates. So that means the industry can abhor at least 2-3 more GSM provders and at least one more national carrier to join Nitel and Globacom.

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Doubt if a market of over 100 million Nigerians will ever be saturated. And the service is still not as mature as in other countries there is stil room for a provider that is customer first and not profit first

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