For Nigeria, mobile phone businesses are the biggest opportunities of the century. Nigeria is now the world’s biggest and fastest growing mobile telephone market after China. Mobile penetration is growing at a staggering rate across the country and the number of mobile phones in use is expected to reach 10 million by 2020.
Mobile sector is churning out a new generation of homegrown millionaire entrepreneurs who serve this multi-billion Naira market. Mobile hardware and accessories, installation of telecom infrastructure, maintenance, services and repairs are a few of the avenues small businesses are exploiting to make money in this market. Despite all these benefits the cost of manufacturing this product in Nigeria is very high.
According the Managing Director of OMNI Nigeria Limited, Prince Nwigwe Chibueze Uzo, the import duties to bring in the raw materials are also very high. That is the reason why the cost of phone accessories are high in the market.
Why are mobile phones such a huge opportunity for Nigeria entrepreneurs
Mobile telecoms has attracted a lot of foreign and local investment to Africa (almost $15 billion annually over the
last five years) and rewarded investors quite handsomely.
In 2011 alone, Prince Uzo said the total revenues from the mobile tele-communication industry on the Nigeria exceeded $40 billion (excluding handset sales).
He says Nigeria have embraced mobile telephones across all social classes. Poor people in rural areas and the un-sophisticated have found popular use for cheap and very basic mobile phones (talk and text only).
The rich and educated middle class are at the top range of the market with all brands of 3G and 4G Smartphones.
Mobile phone sales on the country have continued to soar every year even as manufacturers bombard consumers with newer and more interesting models. Every day, more Nigerians are getting on the internet for the first time in their lives through a simple mobile phone.
However, this is only the first wave of the mobile phone revolution in Nigeria. He stated that up to 70 percent of mobile telephone use is still dominated by voice (talk) and text messaging through GSM or 2.5G technology.
In less than a decade from now, he says a digital (data) revolution will usher in the second wave of Nigeria ’s mobile revolution as the cost of internet access falls across the continent. Over the next decade, more Africans will be able to access the internet (many for the first time) through mobile phones.
The wide presence of mobile phones has also kick started a lot of related businesses, big and small. From the production and sale of pre-paid call (recharge) cards to the repair and maintenance of telecom facilities and equipment.
Other opportunities in this market include: Mobile Money payment systems and mobile applications (commonly known as mobile apps used in healthcare, agriculture and advertising. The opportunities in this space are as astonishing as they are endless. Mobile telecoms will definitely play a very big and exciting role in Africa’s future.
Opportunities for entrepreneurs in mobile phone businesses in Nigeria
The beautiful thing about the mobile phone market is the abundance of space and opportunities it provides for both big and small businesses. While businesses that maintain telecom facilities and install communication masts/towers may require a lot of startup capital, there are quite a number of small-scale businesses for
entrepreneurs who are considering this market.
Manufacturing of Mobile phone accessories
As more Nigerians own mobile phones, the demand for accessories like chargers, earphones (wireless and wired), batteries, phone pouches, USB connectors and memory cards will remain on the rise.
Millions of these accessories (worth billions of naira) are imported from China every year. Nigeria’s Alaba International Market has become a key hub and supplier to countries in the West Africa region. Innovations such as solar – power devices for charging mobile phones are bound to be taken very well by the market because of Africa’s notorious electric power problems.
Entrepreneurs must learn to watch and follow the mobile phone trends very closely in order to exploit new opportunities for accessories in the local market.
The managing director said the only way for save foreign exchange for the country is the investors in this sector to established modern plant that will be producing phones accessories. “My plan is to establish phone Accessories plant in Nigeria very soon that will benefit Nigeria and Africa continent as whole. Very soon Nigeria will no longer import phone as we are going to enough accessories to us,” he said.
Sale of new and used mobile phones (including repairs)
Most people change their mobiles phones for newer models every other year. As a result, mobile phones have become the fastest selling devices everywhere in the world!
However, most Nigerians who would like to own new mobiles (especially smartphones) are usually disappointed because these devices are often too expensive to afford.
As a result, the trade in used mobile devices has become a multi-million naira market in Nigeria. For less than half the price of brand new phones, millions of Nigerians can afford high-end and multifunctional devices like smart
Many of these devices are imported from Europe and USA and sold in several informal open markets across Africa. Because of this booming second-hand market, more people are able to quickly sell off their phones and then buy a brand new one. Entrepreneurs who can get a reliable supply of used mobile phones have a niche market to exploit in Africa.
Since almost all the big mobile makers (Nokia, Samsung, Blackberry, Apple etc) now have storefronts in many African cities, it may be difficult to compete against them in the sale of ‘brand new’ mobiles. However, there is a growing and thriving market for used phones on the continent.
$200m Intervention fund needed
One of the major challenges facing the mobile phone industry is funding. This is because going into manufacturing of these accessories is capital intensive. We need government’s intervention fund of $200 million at single digit. If other sectors of the economy are be encouraged by the government with one intervention fund or the other, we think, this sector need intervention to grow.