June 15, 2011 / 2:48 PM / in 6 years

Internet access set to triple in Nigeria

LAGOS (Reuters) - The number of people with internet access in Nigeria could triple over the next two years, mirroring the explosion in mobile phone usage in Africa’s most populous nation, an industry executive said on Wednesday.

<p>Craig Barrett (C), chairman of Intel and the world's biggest computer chip maker, looks on as a student of Gwarinpa secondary school uses a laptop computer in Abuja, October 31, 2007. REUTERS/Afolabi Sotunde</p>

Funke Opeke, chief executive of the Main One Cable Company which has laid a 7,000 km fibre optic cable linking West Africa to Europe, forecast at least one in three people in Nigeria could have direct internet access by 2013.

“We would say a number in the 35-40 percent for internet access penetration over the next 18-24 months would be a worthwhile objective,” Opeke said in an interview.

“We have a large young population. If you think of all our students in tertiary education, if you think about government migrating to e-government ... if you think of businesses which are not yet fully automated,” she said.

Current internet penetration in Nigeria, a country of more than 150 million people, is estimated at around 11 percent.

Main One’s cable, launched with U.S firm Tyco last year, runs from Portugal to Nigeria and Ghana, and also branches out to Morocco, the Canary Islands, Senegal and Ivory Coast.

Opeke said Main One had contracts with major telecoms providers in Nigeria including South African group MTN, Indian company Bharti Airtel and Abu Dhabi operator Etisalat as well as Tigo in Ghana, and was starting services in Togo.

Poor internet infrastructure is a major challenge for businesses operating in Nigeria, with firms that can afford it long forced to rely on expensive satellite links.

Main One says its cable can deliver more than ten times the broadband capacity of the South Atlantic Terminal (SAT-3), Nigeria’s sole existing undersea connection, and 20 times the entire satellite capacity of sub-Saharan Africa.

The $240 million cable, which has a capacity of 1.92 terabits, can accommodate 1 million MP3 downloads and 100 million voice calls per second.

South Africa’s capacity is 1.28 terabits.

Opeke said average revenue per user (ARPU) for voice telephony in Nigeria was around $5 per month and falling, suggesting affordability was less of an issue as people switch to broadband than delivering services to the end user.

It cost $600 per megabite to get connected from Lagos to London compared with $1,100 between Lagos and the Nigerian capital Abuja, because of the lack of a fully-developed fibre-optic network in the country.

“We are engaging policy makers on some of the policy guidelines we think will help ... so that the price of getting capacity from Lagos to Abuja for example no longer exceeds the price of getting it from Lagos to London,” Opeke said.

“We are still in a market where we are only scratching the surface and demand is insatiable,” she said.

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