NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, May 4, 2005

In the world’s fastest growing mobile market, the ride has just begun
Nigeria hit the mobile headlines in late 2003 when the ITU published its global subscriber growth rates for the year to June 2003, showing the country leading the world with a growth rate of 143% — a figure that could have been even greater were it not for the fact that SIM card sales were suspended for 20 weeks due to too much customer demand. Yet, even now, with an active subscriber base of around 5.5 million, the penetration rate is only around 4%.
The market research firms clearly see Nigeria as continuing to show strong growth. For example, Yankee Group is predicting 16m subscribers by the end of 2008, while Gartner Group believes that Nigeria may overtake South Africa as the largest mobile market in Africa by then.
However, they are seriously underestimating the potential of the Nigerian market. One reason is applying European and American models to usage in Nigeria and the rest of Africa. Take Yankee Group, which tries to neatly divide African countries into either nascent, adolescent, growth or maturing markets. Secondly, they underestimate the saturation level of Nigeria. Most research companies work this out on a combination of a GDP per capita figure with a GINI coefficient (a statistical tool to measure inequality). This clearly misses the way that mobile phones are used and perceived in Nigeria.
Storu found here.