Information Technology Market in Sub Saharan Africa

Nigeria Is Open For BusinessU.S. Commercial Service Nigeria

Hannah KamenetskyActing SCO

www.buyusa.gov/nigeria

Presentation Overview

• Nigeria at a Glance

• Telecom Growth

• Opportunities

• Challenges

• CS Nigeria Services

Gateway to West Africa

Nigeria at a Glance

• Africa’s largest population – 140 million•Language of Business: English• World’s 10th largest oil reserves • World’s 8th largest oil exporter• World’s 7th largest natural gas reserves• Ambitious privatization programs• Vast infrastructure needs• Positive perception of U.S. technology• New government elected April 2007

Nigeria’s Economy

• Currency: Naira 128/$1

• GDP growth: 5.3% (2006) 8.2% est. (2007)

• GDP per capita: $769 (2006) $827 est. (2007)

• Unemployment Rate: 5.8% (2006)

• Inflation Rate: 8.3% (2006) 7.9% est. (2007)

• Paris Club debt forgiveness 2005 ($12.4 bln/$18.6 bln)

• Most London Club debts cleared 2006/07

• Banking system consolidation: 89 25 stronger capitalization

ICT Sector: Room for Growth

Telecom Sector # of Users Teledensity

Fixed Line 1.6 million 1.1%

Mobile 37 million 26%

Internet 5 million 3.5%

Mobile Telecom Sector: “0 to 60”

• Telecom market liberalized in 1998; cell phone license sold off in 2001

• NCC introduced unified licenses in 2006• Explosive growth in mobile sector• Investment: est. $8.5 billion• 2001: <500,000 wireless & fixed lines• 2006: 37 million wireless and fixed lines• Teledensity: 50 million+ in next 3 years

Privatization = Opportunities

• NITEL sold to private firm – Transcorp Plc• Trancorp agreement with Vodacom will inject

$1.2 billion over next 2-3 years to upgrade/expand• Needs: equipment and services to rebuild

decaying infrastructure and buildout new networks nationwide

• But: China often offers more favorable financing terms than U.S. firms

Nigerian Communications Commission (NCC)

• Plans to auction 3G networks covering spectrums in the range of 1800 MHZ, 3G and 450MHZ

• Needs: License purchasers will need technology, equipment and technical services/partners to launch new services

Nigerian Communications Commission

• Partnership initiative with Celtel Nigeria, Ericsson, Huawei launching pilot test in Abuja, Lagos, Port Harcourt

• Project assessing potential for 3G/HSDPA networks and services

• Needs: mobile phones, PCs, TV and video services for growth and development nationwide

Major Cellular Players

Mobile Provider Technology Coverage

MTN Nigeria GSM 900/ GPRS

Nationwide

GloMobile GSM 900/ GPRS

Nationwide

CelTel GSM 900/ GPRS

Major cities, limited rural

M-Tel (NITEL) GSM 900/ GPRS

Nationwide

MDC (UAE) * GSM 900/ GPRS

Nationwide

Big Four +1 Opportunities

• MTN: using new fiber optic transmission network, plans nationwide expansion

• M-Tel: plans to increase capacity by 2.5 million lines, build 800 additional base stations with Vodacom

• Glo-Mobile: ready to launch 3G technology; spend $3 billion over next to years to upgrade/expand network

• Celtel: 3G test trials in Lagos, Abuja, Port Harcourt

• MDB: paid $400 million in Jan 07 for unified telecom license to provide national & international telecom services using fixed & wireless technologies

Nigerian Elections

• Alhaji Umaru Musa Yar’Adua won presidential election April 21

• PDP continues political domination• Likelihood of continuing the reforms

of Obasanjo• Official transfer of power: May 29

Nigeria: Challenges

• Advance-fee fraud, aka “419” scams

• Corruption

• Basic infrastructure lacking

• Power outages

CS Nigeria Services

• NUSA - ~ 4,000 members

• International Company Profile

• Market Research

• International Partner Search

• Gold Key Service

• Trade Show Delegations - U.S.