9 December 2012

Nigeria: Telecommunications Market Is Still Fertile


Mr. Lars Lindén is the Head of Ericsson sub-Saharan Africa, over seeing 43 countries in the region. He spoke to CHIMA AKWAJA on the challenges ahead of telecoms service providers in the country and the coming of 4G technology.

Just recently, the CEO of Ericsson stated that you will be looking towards creating more revenue for the company in Sub-Saharan Africa. What has been your experience?

Ericsson entered the African market 100 years ago; as a matter of fact, Cape Town was one of the first places that we actually started doing business. Now, a hundred years later, of the 45 countries in Sub-Saharan Africa, we are doing business in 43. When we entered Africa during the fixed line era, it was very poor, not much was invested, only one per cent of the population had fixed telephony.

Then with the mobile era that started in the early 1990s, Ericsson came in and made a difference because we are a company that provides mobile infrastructure and with a continent with no fixed telephony, it was such a good thing to introduce mobility and mobile telephony to the people. We have been working in South Africa since 1994 when the market opened up.

Competition is hard but we are leading not only from a global level but I think that we are ahead even in the African environment.

Let's look at Nigeria where Ericsson is a major player with most of the operators. What do you foresee is the future of the Nigerian mobile market? For instance, MTN says they are working towards LTE, Starcomms is working on a new merger and everyone is talking about 4G, what exactly are the opportunities you predict for Nigeria particularly?

I think that there are a number of opportunities emerging in Nigeria. First of all, let me say that the NITEL story is dead. I don't think they will be able to revive that one, so that opportunity is just disappearing. However, this means that all the private players have to sit up. I think from technology point of view, most of the operators; Etisalat, Airtel, MTN are doing GSM and 3G. For the CDMA players, they are joining forces, unfortunately that's a technology that didn't become what they thought it will be in the beginning, but for sure the GSM, 3G and consequently 4G is absolutely what will happen in Nigeria.

People tell me there are 180million inhabitants but the efficient number is 160 million and I know the penetration level is around 45 per cent. This means that there are still a lot of things to do and I think that given the fact that the journey in Nigeria has gone relatively quickly, if you look back 10 years, we didn't have much and now it has boomed in the last decade in the mobile subscriptions, there is a lot to look forward to.

As you know, telecoms is a journey from one technology to the next and to the next for example, we started at 1G, then 2G, 3G and now even 4G. Of course, 4G will happen in Nigeria, I hear that none-existing operators will be able to obtain 4G licenses, so that means that there will be pure 4G players in Nigeria. Of course, for the existing operators its more competition and they have to figure out what to do about that.

On the other hand, the existing operators have the upper hand in the sense that they are sitting on some subscribers that they can hold but the new players will have to find subscribers from the unconnected ones and even from the existing operators but definitely there will be investment in Nigeria in telecoms like never before. Nigeria is such a big market having 160 million people, that's big, very big and the number of players for such a big market is still relatively low. If you exclude the CDMA operators, we only have four big ones, on a population that is big and that's really small.

Hence, you get the scale factor, you can get good quality, good cost levels, and there are a number of advantages to that. There are some countries in Africa that have 2-3million inhabitants and they have about 5-7 operators, there, it's tough, but in Nigeria, the market is open for so many good things.

For the consumers what services will LTE offer them?

The same questions were asked when 3G was launched, "what are we going to do with this" but as you have seen now, every new technology provides more speed and capacity. That's what's happening, you can transmit more bytes per second with every new technology and what we say at Ericsson is that in the future-world, connectivity and bandwidth will be unlimited.

So LTE will not only provide connectivity where you can use your Smartphone or you can connect your computer that we think is the normal way today, but with LTE when you can get connectivity and unlimited bandwidth; this will enable services that you perhaps can't understand today. Go back before 3G was invented, the Smartphone and tablets were not there, now look at all the things you can do with them, you couldn't even dream of the things you can do now.

It's the same thing with LTE, you can't understand the things you can do with it but if you have this connectivity, capacity is not an issue and you can get the speeds you want at any point, anywhere, it opens enormous opportunities. Take such a simple thing as downloading videos and movies, today even with 3D you have to wait three or four minutes but with LTE you drag and click and it's there.

For Ericsson what is your outlook for 2013 in Sub Saharan Africa? In the area of broadband, what are the specific things Ericsson is doing in Nigeria?

In Nigeria, the name of the game with broadband is of course to ensure that everyone gets access to a broadband service, that's what we want to do everywhere. I mean broadband increases GDP growth in any given economy, there is a direct correlation between broadband and the increase in GDP and growth in any country. It's like getting electricity or water, everyone should have it.

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