Data Centres & Networks

LTE transitions allow tier 2 operators to compete in Nigeria

After a wave of regulatory penalties, including fines and a ban on promotions, Nigeria's mobile operators have announced plans to expand and upgrade their networks to cope with strong subscriptions growth and increasing data usage.

Business Monitor reports that this trend is expected to continue over the medium term, as the market is forecast to add around 45mn new subscribers in the five years to 2017.

Meanwhile, consolidation and, subsequently, transition to LTE technology appears to be a growing trend among tier two telecoms service providers in Nigeria. This can be seen as a positive development, as through consolidation tier-two operators are able to gain scale for bigger network deployments while the transition to LTE should enable them to compete better with 3G HSPA+ offerings from the GSM operators. 

Mobile subscription growth slowed to 2.7% quarter-on-quarter (q-o-q) in Q213 due to the large net loss reported by third largest operator Airtel. The same period saw mobile ARPU decline following cuts to mobile termination rates in April 2013. The fixed-line sector contracted by 5.7% in Q113 and 27.6% in the 12 months to June 2013.

In recent months the regulator NCC has implemented several measures expected to benefit consumers in the mobile market including mobile number portability, SIM registration and quality of service requirements. Most recently, in April 2013 cuts to mobile termination rates were implemented, which should reduce the cost of voice services, particularly off-net calls.

Meanwhile, in May 2013 the NCC published the National Broadband Plan, 2013 - 2018, which is a framework for a five-fold increase in broadband penetration by 2017. As part of the plan, in July 2013, Phase3 Telecom partnered with the NCC to extend its fibre infrastructure to rural communities as part of the government's Backbone Transmission Infrastructure Project. The project, delivered under the Universal Service Provision Fund, will roll out 10,000km of fibre backbone infrastructure to all local government areas of Nigeria.

The broadband market is set to receive an injection of competition as Main One Cable Company transitioned to become a fully-fledged communications services provider, including rebranding to become Main One, in May 2013. The Nigerian company intends to broaden its services from the wholesale of broadband connectivity to a suite of data centre and connectivity services throughout West and sub-Saharan Africa. It is building a metro Ethernet network to offer more than 200km of fibre optic access through Lagos' business districts and a 2.5MW, 600 rack data centre to be completed by March 2014. The company is also expanding its terrestrial fibre optic network, establishing points of presence in Abuja and Port Harcourt.

 



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