Is Nigeria telecoms industry saturated?

The telecommunications industry in Nigeria, with a market close to saturation, is facing significant challenges amidst the country's economic struggles. B. Or Lu Koya, senior analyst at Augusto, shared insights on the current state of Nigeria's telecom space in an interview with CNBC Africa. The forecast for growth in 2015 was estimated at about 5.5%, but the sector has been impacted by various factors such as delayed budgets, declining crude oil prices, and struggles in the private sector. This has led to a decline in the demand for telecom services and an expected further decrease in 2016. GSM mobile subscriptions still dominate the market, accounting for 99% of subscriptions, leaving little hope for growth in fixed lines. The deployment of fixed lines requires significant investment, making it an unattractive option for investors in the short term. While fixed broadband offers greater capacity and potential for business and government sectors, its availability is limited primarily to Lagos, with high costs hindering its expansion across the country. Despite Nigeria's large population of over 180 million, the telecom sector is nearing saturation, with active subscriptions fluctuating between 147 million and 149 million. Rural areas still lack access to proper communication networks, highlighting the need for further infrastructure development. The sector is also grappling with macroeconomic challenges, particularly in accessing foreign exchange for importing equipment and assets. Telecom companies are facing difficulties in obtaining dollars to pay vendors, leading to extended credit periods that strain both parties. The ongoing economic turmoil in Nigeria, compounded by FX shortages and rising costs, has put pressure on the telecom sector's margins and overall performance. As the industry navigates through these challenges, stakeholders are seeking solutions to sustain growth and innovation in a highly competitive and evolving market.