Technology | Media | Telecommunications

Tuesday, February 24, 2015

African Mobile Telecom Investment Boosts the Economy

A positive economic growth outlook for Africa is strongly dependent on improved institutional performance and better governance. GDP growth in Africa in 2015 is forecast at 4.4 percent.

Nigeria will be the strongest performer at 6.7 percent growth in 2015, but heavily dependent on natural resources and vulnerable to global demand. Telecom services, and mobile internet access in particular, could help boost the economy.

That said, the Nigerian telecommunications market is expected to generate $10.9 billion in 2019, that's up from a total of $9.2 billion in 2013, according to the latest market study by Pyramid Research.

Although growth in the market will be slightly reduced in 2015, as the market recovers from the large number of fixed-line disconnections, long-term growth of the telecommunications sector will not to be affected.

Nigerian Telecom Market Outlook

The telecoms market will grow at a Compound Annual Growth Rate (CAGR) of 2 percent over the next five years, with mobile data increasing at 16 percent up until 2019.

"Political instability and low oil prices have led to a depreciation of the Naira against the U.S. Dollar, but the telecommunications market will remain an integral part of the country’s efforts to diversify its sources of growth," said Severin Luebke, analyst at Pyramid Research.

Although currency devaluations are likely to result in slower U.S. Dollar growth rates, in local currency terms, the Nigerian telecommunications market offers strong growth rates of around 6.8 percent per year for the period between 2014 and 2019.

Nigeria is the Largest Mobile Market in Africa

With an expected 182 million subscribers at the end of 2019, Nigeria will remain the biggest market for mobile communication subscription on the African continent, according to the Pyramid assessment.

Nigeria is the largest economy in Africa and therefore will play an important role in defining future mobile trends.

"Other countries in Africa are likely to follow Nigeria when it comes to mobile technology developments. The increasing demand for mobile data will offer service providers, as well as new entrants to the market, ample opportunity to test and grow their service offerings in Nigeria," concludes Luebke.