Nigeria: new entrant sees big addressable market in under-served rural regions

On Tuesday this week Global Mobile Daily picked up a story from Nigeria's Daily Trust newspaper, drawn from an interview with the CEO of universal access provider Gicell. The company, founded in 2006 and was awarded a National Unified Access Service Licence by the Nigerian Communications Commissions (NCC), which includes digital mobile services, fixed telephony services, full international gateway services and national long distance services.

Gicell CEO Usman Abubakar Gumi told the Daily Trust that his company is rolling out a CDMA 450 network to provide voice and data services, making its market debut in the five states of Adamawa, Borno, Cross River, Kwara and Oyo, all regions which have been identified as un-served or under-served. Mr Gumi noted that this was a condition of securing funding from a World Bank supported programme. Also, Gumi stated that "as a Unified Access licensee we intend to cover the country within the shortest possible time."

Gumi was asked about the size of the genuinely addressable market and how effectively he expected his company to compete with established GSM MNOs Globacom, MTN Nigeria and Zain Nigeria. Gumi argues that "Nigeria, with a population of over 140 Million, is the most populated country in Africa... [and has] a young and rural–based population with youth under 35 years old occupying the main parts of the population, [which means that] despite the 50 million subscribers, according to the current statistics, there are still additional 55 million addressable markets" (sic).

At our recent GSM>3G Middle East event in Dubai, a notable segment of the exhibitors were from power supply companies keen to showcase solutions to the challenges of providing telecoms services in areas with underdeveloped infrastructure. In the case of Nigeria's rural regions, Gumi says "there are lots of challenges but we would do it the way others are doing it and also as much as possible maximize the use of alternative source of energy such solar panels."

World Bank involvement seems to be an important part of the Gicell funding mix because, as Gumi argues, "the Nigerian banks are short term lenders and the industry is very capital intensive." The role of the World Bank in the project, says Gumi, "is to cushion the cost of the deployment of services in those [rural] areas and to maintain the services for at least five years whether is profitable or not." Mr Gumi feels, however that "based on our study it will be profitable."

Rural communications, bridging the digitial divide, extending service availability to under-served population segments: these are all buzz terms which seem to be resonating ever more persistently at the many Com World Series events covering emerging markets. So I hope my colleagues are able to secure the involvement of Gicell at the Abuja, Nigeria-hosted West & Central Africa Com conference and exhibition in June this year. It is always refreshing to have the established players joined in the panel of speakers by new market entrants.

More on the optimism expressed at GSM>3G Middle East

After considerable quantities of roast Turkey, mince pies etc., it's time to round up some more of what was discussed at our recent GSM>3G Middle East event in Dubai. The focus here is on the second day's proceedings.

One thing we took away from both days' discussions was the widely expressed sense of optimism that the Middle East's telcos will weather the economic downturn relatively unscathed. Day two opened with a speech from Dr Marwan Alahmadi, CEO of Zain's Saudi operation, who described the new entrant's successes to date - and was bullish about the way ahead.

Great confidence was also expressed by speakers from both FRiENDi mobile and Majan Telecom, two companies looking to thrive as MVNOs on the Omani market. The afternoon saw a robust presentation from Mobinil on the ever more pressing necessity to provide a dashboard of VAS to both protect current and expand future revenues. Judging by the enthusiastic questions directed at the Egyptian cellco's Commercial VP Guillaume van Gaver, this presentation struck a chord with a receptive audience.

For my part, I moderated sessions whose broad theme was around extending the availability and improving the affordability of communications services in lower ARPU markets with less easily addressable demand. Among the speakers in this session, it was great to meet Khaled Khorshid, currently the Regional COO of Zain Sudan. After sharing useful insights about how to grow a successful mobile operator, Khaled mentioned that his personal journey is about to take him to another outpost of the Zain empire - he is being dispatched to the Nigerian operation. Khaled was kind enough to volunteer to join the panel of speakers at the Com World Series event which takes place in that country's capital so I have encouraged my colleague who covers Africa to take up the offer. So look out for Khaled among the speaker line-up for West & Central Africa Com in Abuja in June 2009.

The Dubai event was enjoyable and rewarding for me - and I am looking forward hopefully to reading positive feedback from delegates early in the new year. The work leading to the creation of the 2009 Middle East event begins now.

Russian telcos heading for Africa?

While I still have my hands full preparing for our GSM>3G Middle East conference in December, I will shortly be turning my attention more fully to Russia and the CIS. We host two gatherings in the first half of the year which are designed to draw together telecoms execs from markets across the former Soviet Union. The first, Eurasia Com, takes place in Istanbul in March, a natural travel and business hub for the Caspian and Central Asian regions the event serves. Further, Istanbul-headquartered Turkcell is a major player in these markets. The Turkish cellco is co-owner (with TeliaSonera) of Fintur Holdings, a company which manages MNOs in Azerbaijan, Georgia, Kazakhstan, Uzbekistan, Tajikistan as well as Moldova. It's therefore important for the event that we get high-level support from Turkcell. In 2008, the company's Chief Strategy Officer Tayfun Cataltepe was among our speakers - and has gone on to become a valued supporter of the wider Com World Series. The previous year, we welcomed Turkcell's Chief Investment Officer Ms. Tulin Karabuk.

Coming up in June, we have another CIS-focused meeting: Russia & CIS Com in Moscow. This gets a different crowd - delegates mainly from the Russian Federation itself, as well as from Ukraine and Belarus. Regarding the latter country, we really boosted the level of the participation. Belarus's incumbent carrier Beltelecom was represented by General Director Konstantin Tikar, who made some very kind comments abou the usefulness of the trip.

At the last two iterations of Russia & CIS Com, we've heard more and more about the plans of some Russian cellcos in terms of exploring the growth potential of markets outside their usual CIS footprint. Earlier this year, a delegation from Iran was very visible, clearly hoping to remind prospective strategic investors of the impending sale of a 3rd national mobile licence in the Islamic Republic. We've also seen Russian telco people showing up at a conference we used to run in Vietnam, clearly interested in that particular market.

It wasn't, therefore, a big surprise to see a news item this morning which indicates that Russian telecoms investment firm Altimo has expressed an interest in Nigerian operator M-Tel/NITEL. We'll encourage Altimo and other Russian groups to get involved at our huge annual pan-Africa event in November: www.ComWorldSeries.com/africa.