INVESTMENT OPPORTUNITIES IN THE NIGERIAN ICT SECTOR presentation made at the: HIGH LEVEL INVESTMENT SUMMIT (HLIS)

1. INVESTMENT OPPORTUNITIESIN THE NIGERIAN ICT SECTORpresentation made at the: HIGH LEVEL INVESTMENT SUMMIT (HLIS) THE FEDERAL GOVERNMENT OF NIGERIA FEDERAL MINISTRY OF COMMUNICATION TECHNOLOGY MRS OMOBOLA JOHNSON HONOURABLE MINISTER FOR COMMUNICATION TECHNOLOGY Tuesday July 31, 2012

2. Outline • Nigeria’s Infrastructure Gap • The Nigerian ICT Industry • FGN Priorities for the ICT Industry • Investment Opportunities • Broadband • End-user Devices • Value-Added Services • Innovation • Broadcast Infrastructure and Devices • Postal Services • Conclusion © 2012 Federal Ministry of Communication Technology

3. Infrastructure drives growth • Investment in infrastructure positively correlated with economic development (especially in developing countries) • Significant gaps exist in physical infrastructure [transport, power, ports, ICT etc.] and social infrastructure [education, health, security etc.] • Resulting in significant investment opportunities • Investment requirement for first National Implementation Plan (2010-2013) is approx N32trn (US$212bn)1 • FDI projects in Africa have grown at a compound rate of nearly 20% since 2007; grew by 27% from 2010 to 20112 • About US$72bn (£46bn) invested in new infrastructure per year by African governments and private sources • Telecom-related infrastructure accounts for about 30% of this US$21bn (£13bn) © 2012 Federal Ministry of Communication Technology

4. The Nigerian ICT Industry:fastest growing sector in the economy In the first quarter of 2012, the Telecommunication & Postal sector was the primary driver of growth of the Nigerian economy. The sector is the fourth highest contributor to the nation’s GDP Drivers of the Nigerian Economy as at Q1 2012 5.83% equates to N75.52bn (US$0.47bn) Source: “Q1 2012 GDP Report “National Bureau of Statistics. See http://www.nigerianstat.gov.ng/pages/download/69 © 2012 Federal Ministry of Communication Technology

5. The Nigerian ICT Industry: estimated size by category US$18bn invested in telecoms sector of which US$16bn invested in mobile US$1.6bn spent on Hardware Converged Services (Data, voice & media) Mobile Network Operators Infrastructure Service Providers Device Assembly Transaction Services US$615m spent on Services Value Added Services Device Sales & Distribution Device Maintenance & Repairs Access Provision Training & Education Internet Service Providers Satellite Operators Annual Maintenance & Support (servers & storage) Fixed Wire-line Operators Research & Development Call Center Operations Equipment Sales & Distribution Fixed Wireless Operators Equipment Assembly Software Maintenance & Support Equipment Maintenance & Repairs Software Sales & Distribution Software Installation & Customization Support Services Infrastructure Services Business Process Outsourcing US$412m spent on Software Software Development © 2012 Federal Ministry of Communication Technology

6. The Nigerian ICT Industry: growth prospects by category Legend High growth Medium growth Converged Services (Data, voice & media) Low growth Mobile Network Operators Infrastructure Service Providers Device Assembly Transaction Services Value Added Services Device Sales & Distribution Device Maintenance & Repairs Access Provision Training & Education Satellite Operators Internet Service Providers Annual Maintenance & Support (servers & storage) Fixed Wire-line Operators Research & Development Call Center Operations Equipment Sales & Distribution Fixed Wireless Operators Equipment Assembly Software Maintenance & Support Equipment Maintenance & Repairs Software Sales & Distribution Support Services Software Installation & Customization Infrastructure Services Business Process Outsourcing Software Development © 2012 Federal Ministry of Communication Technology

7. FGN Priorities for the ICT Industry INFRASTRUCTURE • Connecting Nigeria • Speed and Quality of Service (QoS) INCLUSIVE DEVELOPMENT • Connecting Nigerians • Bridging the Digital Divide JOB CREATION • Local Value Added • Domestic Participation in the New Economy • Transparency & Efficiency in Governance & Citizen Engagement E-GOVERNMENT SUSTAINING A SOUND REGULATORY ENVIRONMENT © 2012 Federal Ministry of Communication Technology

8. Investment Opportunities:Broadband • FGN Policy Focus and Priority: • Accelerated roll-out of robust, reliable, and cost effective ICT infrastructure to increase citizen access to ICTs. • Market Indicators: • Four undersea fibre-optic cables with combined design capacity of approx 10 TBps • <100,000km of terrestrial fibre-optic cable • 20,000 base transceiver stations • Average download speed of 3.09MBps • About 52 million Internet users; internet penetration of 33%; • Broadband penetration of 6% • Opportunities exist for entities active in: • Deployment of terrestrial fibre-optic networks (including fibre-over-powerline) • Deployment of wireless broadband infrastructure • Satellite networks (in particular those providing connectivity to rural areas) © 2012 Federal Ministry of Communication Technology

9. Investment Opportunities:End-user Devices • FGN Policy Focus and Priority: • Increasing adoption of ICT tools by the population and increasing local participation in relevant sub-sectors of the ICT industry. • Market Indicators: • Consumer spending in 2010 was US$115bn; projected to increase to US$167bn by 2020 • PC penetration of 4.5% • Four PC assembly plants in country; producing an average total of 130,000units. Of all PCs sold in Nigeria in 2011, 30% were assembled/manufactured in the country • Average cost of low-end laptop is N50,000 (US$310); average cost of low-end mobile phone is N5,000 (US$31) • All mobile phones used in Nigeria are imported • Opportunities exist for entities active in: • Assembly and manufacturing of personal computers, laptops and mobile devices (tablets, phones etc.) • After-sales support (Digital Service Centre) Note: 1Nokia 1616 classic © 2012 Federal Ministry of Communication Technology

10. Investment Opportunities:Value-Added Services • FGN Policy Focus and Priority: • Contribute to the scale and scope of the domestic Information Technology Enabled Services (ITES) market (and facilitate its growth) • Market Indicators: • Growing domestic data centre market and emerging position as regional hub for data centre services in West Africa • Outsourcing market estimated at US$1bn in 2011 • Increase in eGovernment services – establishment of Government Contact Centres • Pilot of Central Bank’s Cashless Nigeria initiative • 16 Mobile Money Operators licensed • Opportunities exist for entities active in: • Data centre deployment and management • Application hosting / Cloud computing • Business Continuity / Disaster Recovery • Internet Service Provision © 2012 Federal Ministry of Communication Technology

11. Investment Opportunities:Innovation and Entrepreneurship • FGN Policy Focus and Priority: • Promote and support innovation and entrepreneurship in the ICT sector • Stimulate and support domestic value-added • Market Indicator: • Market for software in Nigeria estimated to be worth US$6bn • Most new jobs in Nigeria will be created at the intersection of ICTs and services • ICT businesses represented the second largest number of YouWIN awardees • Otigba Computer Village (Lagos State) is largest cluster of ICT traders • Increasing adoption of innovative ICT solutions: Growth Empowerment Scheme (GES) for distribution of seeds and fertilizers; Mobile Authentication Service (MAS) for verifying authenticity of drugs • Opportunities exist for entities active in: • Incubators/Innovation Hubs • Software Development • Venture Capital/Private Equity Investments © 2012 Federal Ministry of Communication Technology

12. Investment Opportunities:Broadcast Infrastructure and Devices • FGN Policy Focus and Priority: • Partner with the private-sector to ensure that the transition to digital broadcasting is completed within the specified time frame and with minimal disruption to the viewing public. • Market Indicators: • 20 million households estimated to have at least one television set • Current subscription to pay TV is low (<2million); high demand for low-cost packages aimed at less affluent households • Global timetable and acceptance of the migration presents a captive market, and the need to secure the rights of citizens to information increases Government’s commitment to the transition • Opportunities exist for entities active in: • Signal distribution • Broadcast equipment suppliers • End-user device manufacturers, installers and after-sale support • Content aggregators, producers, distributors etc. © 2012 Federal Ministry of Communication Technology

13. Investment Opportunities:Postal Services • FGN Policy Focus and Priority: • Reform the postal sector and utilise the Public Postal Operator in achieving social, financial and digital inclusion • Market Indicators: • National Postal infrastructure provides geographic spread and accessibility that are not matched by any other single public or private institution • Comprised of over 3,000 physical locations spread across over two thirds of LGAs • Annual turnover of the courier industry is estimated to be over N350billion (about US$2.2bn) • Opportunities exist for entities active in: • Postal operations • Retail financial services (Post Banks) • Digital inclusion through public access venues © 2012 Federal Ministry of Communication Technology

14. Conclusion:current investments and expressions of interest • MoU signed with the world's leading mobile phone supplier. • Partnership includes establishment of an mLab • Silicon-valley firm to invest in Innovation Fund specifically targeting technology start-ups • Global IT companies to establish (engineer) certification labs in the country to boost high-end skill development • Large multinational technology company to establish Skill Development and Research Institute • Digital TV Company to invest US$2bn in transition to digital broadcasting (total investment in Nigeria to reach US$10bn) • Continued investment by mobile operators to expand reach and improve quality of networks; over US$10bn invested so far by the largest mobile operator • Private equity firm finalising acquisition of three CDMA operators • Various ICT services and solutions companies seeking to establish in Nigeria – including one of Europe’s leading provider of ICT services © 2012 Federal Ministry of Communication Technology

15. INVESTMENT OPPORTUNITIESIN THE NIGERIAN ICT SECTORpresentation made at the: HIGH LEVEL INVESTMENT SUMMIT (HLIS) THE FEDERAL GOVERNMENT OF NIGERIA FEDERAL MINISTRY OF COMMUNICATION TECHNOLOGY MRS OMOBOLA JOHNSON HONOURABLE MINISTER FOR COMMUNICATION TECHNOLOGY Tuesday July 31, 2012