Spectrum policy key to unlocking USD5 billion value of mobile broadband in Nigeria
LONDON, UK, 10 June 2011: Analysys Mason’s latest study calls on the Nigerian government to support the roll-out of mobile broadband and unlock a potential NGN862 billion (USD5 billion) of additional GDP by 2015.
According to the Assessment of economic impact of wireless broadband in Nigeria, only 6% of all Nigerians currently have access to broadband services, and 74% of those do so through mobile broadband. There is little fixed broadband connectivity outside of Lagos, and even in Nigerian cities, most cyber cafes now connect to the Internet using wireless services. As a result, mass-market broadband is heavily dependent on mobile technologies.
The report highlights key steps the Nigerian government must take to promote mobile broadband growth including:
- Releasing the 2.6GHz spectrum band quickly to support the high demand for mobile broadband in urban areas
- Freeing up the digital dividend spectrum to deliver broadband services to rural areas
- Reducing the 35% tax level faced by Nigerian mobile operators – a tax which is double the global average.
“Without proper spectrum allocation in line with internationally harmonised band plans and broader government support, it will not be possible to realise the full potential of mobile broadband,” comments report author Robert Schumann, Manager at Analysys Mason.
Policy support for mobile broadband services in Nigeria could help deliver significant advantages to the wider wireless ecosystem and meet the demand from consumers and business.
The report found that although mobile broadband would continue to grow through private sector efforts, potentially more than 20% of that benefit – NGN190 billion – may be lost if a supporting policy environment is not created by the government and regulator.
The Analysys Mason study found that mobile broadband will facilitate much needed diversification of the economy, including through the growth of an ecosystem of online services:
- 55% annual growth would be seen from the online retail industry, growing from NGN4.5 billion in 2010 to NGN44.9 billion in 2015
- The financial services industry’s benefit from broadband would grow by 95% CAGR, as a result of mobile access to bank accounts and money transfer services, from NGN0.6 billion in 2010 to NGN16.8 billion in 2015
- The use of the Internet and mobile to deliver social services, including healthcare and education, would generate growth of 70% CAGR, from NGN2.2 billion to NGN30.3 billion in 2015
- The revenue from online corporate services, especially agriculture and utilities, would experience a 55% annual growth rate from NGN3.6 billion in 2010 to NGN32.1 billion in 2015.
Wider availability of mobile broadband could also substantially improve overall industrial productivity through improvements in business processes. Productivity increases as workers increasingly use email and electronic file exchange, have quicker access to business critical information and can access more distant customers and suppliers. A 73% annual increase in the working population with access to mobile broadband, reaching 5.2 million users by 2015, is expected to deliver an additional NGN140 billion to the Nigerian economy each year.
Commenting on the report, Ross Bateson, Special Government Advisor, GSMA, said: “It is essential that the new Nigerian government acts quickly to support Mobile broadband expansion, as failure to do so could hinder the country’s social and economic growth. Not only could the country realise as much as NGN862 billion of incremental GDP, but people of all ages and livelihoods would benefit from the vast amount of information and opportunities mobile broadband can unlock.”
While access to more radio spectrum for the provision of mobile broadband was identified as a key issue, the report also found that action should be taken in other areas. The tax and administrative burden on the mobile industry in Nigeria is a constraint on wider adoption of broadband, and the digital divide which keeps rural citizens and women disconnected also requires policy action.
“With a young and entrepreneurial society, Nigeria is well positioned to benefit from the social and economic uplift associated with broadband connectivity,” concludes Schumann.
To download the Analysys Mason’s assessment of economic impact of wireless broadband in Nigeria, please visit: http://www.analysysmason.com/forms/Wireless_Broadband_In_Nigeria/
Link to press release: http://www.analysysmason.com/About-Us/News/Press-releases/Spectrum-policy-key-to-unlocking-USD5-billion-value-of-mobile-broadband-in-Nigeria-finds-Analysys-Mason-study/