Telecommunication, media and technology services in Nigeria

“It is expensive to be speculative about Nigeria, you need a well-researched and step-by-step approach to entering the market.” – Head of a Large TMT Business

Market overview Telecommunications is one of the success stories in Nigeria. Nigeria is increasingly connected and mobile. As a country it has the highest tele-density of 91.7 in Africa, 8 SIM cards for every 10 Nigerian and accounts for most shipments in smartphones in Africa in Q1 2015 according to the National Bureau of Statistics. On the media side, Nigeria has an established network of media channels but there is a demand for better quality intermediary services such as advertising.

Extracts from our interviews with companies Why Nigeria? There is a strong demand on the enterprise side for our services from multinational clients who seek quality on par with international standards. In the short run, lower oil prices and unpredictable regulation has created barriers for us to operate in Nigeria. But we’re generally optimistic about the longer term future. Ultimately, if you’re serious about operating across Africa, you need to be serious about operating in Nigeria, Kenya and South Africa.

What is your biggest business constraint? Nigerians like to do business with people they know and who can show commitment to the country. Therefore, serving the market remotely is not an option. However, changing regulation has been an obstacle to establishing local footprint with sufficient control over it. This has been the case particularly in the advertising industry – see box on right. Without reform of the regulatory landscape and protection of foreign interest, international companies will face much higher barriers to entry and operating.

How do you overcome these constraints? The uncertain regulatory environment and our consequent appetite to enter Nigeria limits the range and scale of services we are willing to offer to the market.

What advice would you give others in the industry? Having local knowledge and networks is key. Use the connections and local partners to enter the market with established networks. I wouldn’t adopt a big bang, capital-heavy, market approach in Nigeria without being 100% sure that our strategy will succeed.

Leave a Reply