Top Story

As far as we know, no-one thus far has produced a publicly available report looking at the state of the mobile handset market in any Sub-Saharan African country: what their users feel about them; how many they have; and what brands they use and why. e-Shekels has put together a sample of 20,000 users using Nigerian omnibus surveys which give the results some robustness in the context of a country with such a large population. It has also surveyed non-phone users and mobile phone distributors.

As with technologies elsewhere in Africa, the growth of mobiles appears in large part to have been driven by the comparatively young (18-34) and its users are predominantly (67%) though not exclusively male. Interestingly, younger women are more likely to have a phone and therefore usage will increase as existing users grow older. Also women are more likely to download polyphonic ringtones than men. Reflecting their age, 74% of all those surveyed earn under N25,000 a year.

Because of the unreliability of networks, 23% of the sample own two or more handsets for different networks. The sight of individuals pulling out another handset when one network is congested is a familiar sight. 1% claim to own a staggering four handsets which must require extremely large pockets. So although there are 13 million mobile subscribers, they may only be 9.1 million users when one allows for this multiple ownership. If network capacity is increased some of this handset ownership will disappear but its loss will be more than balanced by overall growth.

Those questioned for the survey were asked to rate their usage and the status of a number of different devices including ranking the mobile phone alongside radio, TV, the Internet and newspapers. The interesting thing about the responses is that the mobile phone was ranked as most used by half of those interviewed.

In a society where television and newspapers are a minority media, the mobile has become almost a form of media in itself with people using it to keep ahead of what is happening in their world. 33% of respondents would be interested in news delivered to their phone and at least 20% were interested in sport. And at least half of the sample were willing to pay for content of this kind to be delivered to their mobile phone.

Again perhaps reflecting the age of the sample size, the reasons given for having a mobile are largely about keeping informed, saving time and money and organising their social life. Only 4% of the sample saw the mobile as a device that would help them earn more income. No doubt this proportion will increase as the current generation of mobile owners grows older.

Nigeria, like the rest of Africa, is a price-driven market. Over 60% of mobile distributors surveyed put cheapness as the factor that made people buy a phone. After this but all at a much lower level came ruggedness, clarity of calls, elegance and simplicity.

15% of the mobile phone owners in sample were PC owners which is larger than the national average of 7%. They are also owners of a wide range of home electronics including video or DVD; a digital camera and a PDA. Around 15% were subscribers to DSTV.

The two main barriers to mobile phone growth amongst non-users are the linked factors of insufficient income (41%) and the high price of handsets (27%). This finding is in line with research by the global GSM Association that pinpointed the cost of handsets as the single biggest obstacle to affordability in emerging markets. It is working with handset manufacturers (particularly Motorola) to pioneer what will initial be a US$50 handset that over time as demand increases will fall to US$40.

Not surprisingly given these cost issues, 80% of distribution in Nigeria is in the so-called “grey market” where dealers seek to maximise price reductions. The report’s authors’ have estimated that for every appointed dealer there are 30 grey market dealers. Whilst such an anarchic market structure often makes it frustrating for manufacturers in this field to increase sales, it does ensure that competition brings down prices. Doubtless many of the phones sold are either secondhand and refurbished and their sellers have mostly avoided paying import tariffs.