Mobile phone: How forecasts are driving investments into Nigeria

A major global study about the behaviour of mobile consumers has revealed why the Nigerian market is attracting fresh investments from existing and new phone manufacturers, writes DAYO OKETOLA

The phenomenal growth of the Nigerian telecommunications industry has not only been backed by huge investments but it has also translated into a very large subscriber base of over 85 million customers.

Many of the customers, according to several studies, will be accessing the Internet for the first time ever via their mobile devices.

Due to the expense and lack of fixed line infrastructure, for many Nigerians, mobile devices offer the most affordable way to access the Internet.

Therefore, more mobile phones, including tablets, are expected to be shipped into the emerging markets in 2011 with Nigeria being in a central position because of its huge population and revenue potential.

TNS, in a global research on mobile consumer behaviour, found that 25 per cent of Nigerians consider the ability to take and share pictures plus video as a major influence on their decisions to pick up their next mobile devices.

The study, known as TNS Mobile Life, which is the result of more than 25,000 hours of interviews with over 34,000 respondents in 43 countries, shows that about 76 per cent of consumers in Nigeria, are interested in video calling, despite not yet using the service.

Growth in the mobile device market, according to the findings, will be driven by increased demand for social functionality, video calling, streaming and sharing services.

Commenting on the study, which focuses on Nigeria as a key investment destination in the emerging markets, the Chief Executive Officer, TNS-RMS West Africa, Mr. Aggrey Maposa, said, “With mobiles increasingly becoming the primary device for Internet access and communication, particularly in emerging markets, entertainment and multimedia features are a key requirement for engaging with consumers.

Handset manufacturers need to ensure that entertainment offers, particularly mobile music, gaming, pictures, video and social networking are available and easy to access. Many are missing a trick in not bringing more smartphones to the market in high-growth countries like Nigeria.”

According to him, the study also revealed that mobile web users visiting social networking sites grew from 30 per cent to 46 per cent globally while it grew from 26 per cent to 50 per cent in the emerging markets. Meanwhile, it grew from 48 per cent to 74 per cent in Nigeria.

Maposa said only 18 per cent of consumers globally managed to upload photos or video directly to the web from their mobile devices during the same period, adding that another 44 per cent would be interested in doing so in the future.

Similarly, 39 per cent of Nigerians are already uploading photos via their mobile devices while 56 per cent are said to be interested in doing so in the future, according to the study.

The major challenge, Maposa noted, was that many of Nigeria’s over 85 million subscribers lacked the devices to video calls and other social networking functionality.

“Forty-nine per cent of consumers in the emerging markets are more likely to want to upload content, but more than half (55 per cent) do not have the ability to do so. While 81 per cent of Nigerians are likely to upload content online, 74 per cent do not have the required phone feature to do this,” he said.

Reacting to findings of the study, experts argued that the high cost of smart phones was a major reason 74 per cent of Nigerians still lacked the devices to do much on the go.

Aside from the fact that the scenario presents device manufacturers with huge opportunities to invest in Nigeria, experts said some investors were already taking advantage of this.

A mobile phone manufacturer, Zen Mobile, recently entered the Nigerian mobile phone market to take advantage of the expected boom in the uptake of smartphones in the country.

Zen Mobile, a member of the Tolaram Group with its root in Singapore, introduced six affordable smart phones into the country.

The General Manager, Zen Africa, Mr. Girish Sharma, said that the company entered the Nigerian market to offer best quality mobile phones at affordable prices.

He said in the last one decade, since the introduction of GSM in the country, “Nigerians have been made to pay more for less” as the cost of mobile phones was too high, noting that this was what Zen Mobile wanted to address.

He said, “Zen Mobile is here to offer Nigerians a double-edge advantage of quality phones made with best technology, which is comparable to any other leading brands in the world at unbelievably affordable prices.”

Barely two weeks after Zen Mobile inaugurated its presence in Nigeria, another mobile phone manufacturer, Zedd Mobile, also came into the market with similar range of affordable smartphones.

However, device manufacturers already established in the Nigerian market are not also resting on their oars, promising fresh investments ahead of a major mobile boom in the emerging markets, including Nigeria.

A number of mobile phone manufacturers such as Techno, LG, Sony Ericsson, and Blackberry maker, Research in Motion, are also making waves in the market.

Nokia, a major player in the country’s mobile phone market, has also said the emerging markets such as Nigeria are very critical to its growth plan.

Speaking recently in Dubai during a media roundtable with journalists drawn across the Middle East and Africa, the President and Chief Executive Officer, Nokia Corporation, Mr. Stephen Elop, said Nokia’s new smartphone strategy was the catalyst that would help the company penetrate the United States market and other markets where Nokia was not a dominant player.

The Nokia CEO, who expressed satisfaction with the contribution of the Middle East and the African market to Nokia’s overall corporate performance, promised that such contribution would be matched with appropriate investment.

Elop argued that the adoption of smartphones in the emerging market like Nigeria had been identified as one of the major stimulants expected to fuel growth in the mobile device industry in 2011.

According to him, the expected attractive mobile device industry revenue growth in 2011 and over the longer term will be driven by the further adoption of smartphones by consumers globally and the further adoption of mobile devices and services, particularly in emerging markets.

Another major mobile phone manufacturer in Nigeria, Samsung, has doubled the rates at which new and affordable smartphones are being introduced into the Nigerian market.

The phone maker recently entered into a data bundle partnership with MTN to enhance the penetration of its Galaxy 5, Samsung Galaxy S phones and Samsung Galaxy Tab.

The worldwide mobile phone market grew by 17.9 per cent in the fourth quarter of 2010, driven by smartphones, according to a study by IDC.

Vendors shipped 401.4 million units, compared to 340.5 million units in Q4 2009.

Vendors shipped a total of 1.39 billion units on a cumulative worldwide basis in 2010, up by 18.5 per cent from 1.17 billion in 2009.

ZTE, a company that sells primarily lower-cost feature phones in emerging markets, moved into the number four position worldwide in Q4.

Nokia, Samsung and LG remained the top three vendors, while Apple was in fifth place. IDC believed that the worldwide mobile phone market would be driven largely by smartphone growth through the end of 2014.

The market researcher estimated that the smartphone sub-market would grow by 43.7 per cent in 2011.

Experts argued that cheaper smartphones would enjoy deeper and faster penetration as well as patronage in Nigeria.

They, however, called on the Federal Government to curb the influx of substandard Chinese phones into the country.

source : Punch