Boston, MA -- (SBWIRE) -- 09/21/2012 -- BMI's Q312 update on Nigeria's telecommunications market is based on regulatory data from the Nigeria Communications Commission relating to the end of March 2012 and market data from the mobile market leader MTN Nigeria. It contains the latest five-year forecasts depicting the development of the country's mobile, fixed-line telephony and internet markets as well as mobile average revenue per user forecast through to the end of 2016.

Nigeria's mobile market grew by 3.8% in Q112 to reach 98.547mn subscribers, according to market data published by the telecoms regulator. This is in line with our growth expectations for 2012, which projects the mobile subscriber base to cross the 100mn market by the end of the year. We also expect the mobile penetration rate to exceed 60% by YE12. Over the next five years through to 2016, we expect robust growth in the mobile market despite the expected the implementation of number portability and the completion of the mandatory SIM registration exercise. By the end of 2016, we forecast mobile subscriptions in Nigeria to reach 130mn, equivalent of a penetration rate of around 70.7%.

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As in recent quarters, the GSM segment continues to be the main growth driver in the mobile market as the regulator's data showed continued subscriber losses in the CDMA segment. The challenges facing the CDMA segment in Nigeria were demonstrated by the decision of the management of one of the four CDMA operators - Reliance Telecoms (rebranded to Zoom) - to significantly scale down its operations amid mounting financial and subscriber losses. The firm is understood to be in discussions with prospective new investors in the company and notes it may be possible to call on its Chinese technology partners for a capital infusion. Despite the operators' lack of competiveness in the wireless voice market, BMI notes there are considerable growth potentials for the operators in the data market. We believe the long-term survival of the CDMA operators depends on their ability to develop and implement successful strategies to capture a considerable proportion of the budding market for data services.

We have revised down our fixed-line forecast in this quarter's update to our telecoms market report to reflect the sharp drop (16.7% quarter-on-quarter) in fixed-line connections during Q112 to bring the fixed-line subscriber base to just under 600,000 at the end of March 2012. We expect this trend to continue during our forecast period, boosted by fixed to mobile substitution and underinvestment in fixed network infrastructure.

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