• Tuesday, July 23, 2024
businessday logo

BusinessDay

Nigerian smartphone boom challenges Nokia Africa dominance

businessday-icon

 Agbaje Olushola stares longingly at the Samsung Galaxy S4 and Tecno N7 smartphones on display in the Banex Plaza technology market in Abuja.

The 32-year-old engineer already owns three handsets, yet said he is prepared to pay N100,000 to N150,000 for a smartphone to add to his collection, according to Bloomberg.

“I’m a phone freak,” said Olushola, clutching a BlackBerry in his left hand while a black Nokia Oyj (NOK1V) N73 peeps out of his jeans pocket. “If you don’t have those smartphones you look less trendy in society.”

Soon Olushola, whose second Nokia — an N900 — is charging in his car, will be spoiled for choice as Microsoft Inc. (MSFT) and China’s Lenovo Group Ltd. (992) try to grab a slice of a market already occupied by BlackBerry, Samsung Electronics Co. (005930) and Tecno Telecom. Both will introduce devices to a country where the number of smartphone users is expected to increase to more than 35 million in 2017 from 5.6 million at the end of last year, according to research by Informa Telecoms & Media.

Nigeria, with more than 160 million people, is projected to grow its economy by 7.2 percent this year, above the 5.6 percent average for sub-Saharan Africa, according to the International Monetary Fund (IMF). Mobile phone companies see it as a particularly attractive market because many Nigerians own more than one device, allowing them to take advantage of cheap tariff deals and overcome patchy network coverage.

MTN Group Ltd., the largest mobile phone operator in Nigeria with 51.3 million subscribers at the end of March, increased revenue from data services in the country by about 64 percent in the first quarter partly because of increased use of smartphones, according to Brett Goschen, chief executive officer of the company’s Nigerian unit.

“The biggest driver is the devices, particularly the smartphones,” which appeal to those who need to access the Internet at work, Goschen said in an interview in Lagos. “Once he can do that and use applications on smartphones that really drives the data usage, that’s really where the increase is coming from.”

MTN has 195 million subscribers across more than 20 countries including Nigeria. The company’s shares fell on Tuesday after Bloomberg News reported that it is exploring a potential acquisition in India, according to four people familiar with the matter. The stock declined 0.9 percent to 180.38 rand by 2:26 p.m. in Johannesburg, valuing the company at 340.65 billion rand.

Chike Maduegbuna was among the first to see the growth in Nigeria’s smartphone market when his company FansConnectOnline Ltd. created Afrinolly, an application that allows users to view trailers and read news about the country’s film industry, known as Nollywood.

Afrinolly has been downloaded more than 2.3 million times since it was introduced last year, about 90 percent onto smartphones, Maduegbuna said in an interview. The app is preloaded on some MTN devices and Maduegbuna hopes to strike a similar deal with Lenovo.

“The smartphone culture is growing across Nigeria and other African nations,” Maduegbuna said. “People are becoming conscious of what they can do with smartphones and they’re getting cheaper.”

Both Lenovo, the world’s second-biggest maker of personal computers, and Redmond, Washington-based Microsoft have recognised that price is crucial to expanding in Africa, particularly in Nigeria where 63 percent of the population in 2010 were considered poor, according to the World Bank.