Nigeria mobile market growing, revenues tailing off

By Chijioke Ohuocha

ABUJA, June 18 (Reuters) - Nigeria's mobile subscriber base is growing at around the fastest pace since the advent of GSM technology at the start of the decade, but average revenue per user is tailing off, industry analysts said on Wednesday.

The number of mobile subscribers in Africa's most populous nation rose to 68 million by the end of the first quarter, five million more than at the end of last year, said Thecla Mbongue, senior research analyst at Informa Telecom and Media.

Nigerian operators added 7 million new subscribers in the last quarter of 2008 alone, the highest number of net additions since GSM was introduced in 2001, according to Informa data.

But Mbongue said average revenue per user (ARPU), a key gauge of telecoms firms' competitiveness as well as of consumer spending trends, had started to decline.

"ARPU going down is a normal trend. Once you connect the high-end users and you begin to connect people who spend less, it dilutes ARPU," Mbongue said at an industry conference in the Nigerian capital Abuja.

She said the increase in subscribers was partly due to Nigerians buying SIM cards from multiple operators and to flexible disconnection policies, which meant subscriptions remained active even if users stopped making calls.

That implied that the real penetration rate in Nigeria, a country of 140 million people and the continent's biggest mobile telecoms market, was below the 42 percent figure usually quoted by the industry.