Telecommunication
Infrastructure and Regulations
Today, Nigeria is one of the fastest growing
telecommunications market in Africa.
Given the current political climate, the development of wireless technology,
and my personal experience, I suspect that the number of Nigerians using
wireless phones has grown exponentially and the number of Nigerians using
land-line phones has grown marginally. But even with anticipated growth in
mobile communications, the telecom industry is still not meeting the demand of
the people. Its large population and significant need for communication is a
catalyst for growth however its aging and inefficient telecommunications
infrastructure is a speed bump on the “information super highway”.
Telecommunications
at a quick glance:
|
|
Statistic
|
Source
|
|
Teledensity (1999)
|
0.38
|
UNECA
|
|
Telephone main lines
per 1,000 people (2000)
|
3.6
|
EIU
|
|
Mobile subscribers per 1,000 people (2000)
|
0.17
|
EIU
|
|
Mobile subscriber
percent of total telephone subscribers (1999)
|
5.7%
|
UNECA
|
|
Number of GSM
providers (2001)
|
3
|
EIU
|
Almost 120 years
ago, sub-marine cable was laid along the west coast of Africa linking Lagos (Nigeria), Ghana, Sierra Leone, and Gambia public telegraph services with England.
Today, in Nigeria, the domestic telecommunications
infrastructure is supported by coaxial cable; microwave radio relay; a domestic
communications satellite system with 19 earth stations; a coastal submarine
cable; and mobile cellular facilities.
Satellite earth stations – the Intelsat (2 Atlantic Ocean and 1 Indian Ocean) and coaxial submarine cable, SAFE
(South Africa Far East) support the international telecommunications system. Placing calls within Nigeria and internationally from Nigeria is still very difficult in many
locations. There are a limited number of operating telephone lines, less than
500,000 and those that are operational are not reliable. Calling to Nigeria
from the United States is extremely frustrating, often you hear a busy signal
(and the phone is not engaged); “all circuits to the county you are calling are
busy”; or “the wireless subscriber you are calling is either out of range or
has the phone off”!
Launched in October
1999, by 2002, the new telecommunications policy was in place and gaining wide
acceptance. Under the policy, the government
promotes competition, deregulation and
liberalization;
allows for flexible proactive regulated
telecom environment;
calls for an autonomous sector specific
regulator;
enables an environment for cost-effective
telecom services;
supports the participation in provision of
telecom services and manufacturing of telecom equipment;
provides quality standards and consumer
protection;
calls for the promotion of universal access
and service;
and frequent management and monitoring
systems.
The policy is
definitely a positive first step towards the revitalization of the
telecommunications environment but what is most important is the execution of
the policy. Several administrations have made attempts to advance
telecommunication in Nigeria but all have fallen short. This
administration has deregulated telecommunications however service providers are
offering services at a price that is not affordable to most people. The average
mobile call per minute is approximately US$ 0.36.
Nigeria’s telecommunications infrastructure is
currently operated by Nigerian Telecommunications, NITEL, with the government
controlling a 51% share in the company. Under the telecommunications policy the
government plans to sell its interest to the Nigerian public; foreign
investors, though foreign stock exchanges; and sell stock to NITEL employees.
The government recognizes that ownership in NITEL, as it exists today will only
be a hindrance to the recovery and continued development of Nigeria. Thy also feel that private investors
can better manage the investment needed to modernize the infrastructure and
increase communication nationally and internationally. Deregulation presents a tremendous
opportunity for investor and callers in Nigeria.
The most
significant opportunity in telecommunications in Nigeria is in mobile communications. In 2001,
three GSM operators were licensed, NITEL, MTN Nigeria Communications and Econet
Wireless. According to the Economist Intelligence Unit, NITEL lags behind its
mobile competitors due to the limited number of interconnectivity lines used to
connect GSM mobiles with fixed lines.
The introduction of GSM mobile services has increased the teledensity in Nigeria from less than 0.5 to 0.8 in six months.
Under the government-owned NITEL and before GSM, Nigeria has realized growth in the telecom
sector but it is significantly lagging. In 1960, Nigeria’s teledensity was at 0.4 telephones per
1,000 people; in
1998 they were at 11 per 1,000 people. Although previous growth has been slow,
projections for the future are optimistic.
Nigeria
Telecom Forecast
|
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
|
Telephone main line (’000)
|
600
|
800
|
1,080
|
1,536
|
2,077
|
2,632
|
|
Telephone main lines
(per 100 people)
|
0.5
|
0.7
|
0.9
|
1.3
|
1.7
|
2.1
|
|
Mobile subscribers (‘000)
|
295
|
1,405
|
2,999
|
4,915
|
7,590
|
9,180
|
|
Mobile subscribers
(per 100 people)
|
0.3
|
1.2
|
2.5
|
4
|
6
|
7.2
|
Sources: Pyramid Research; Economist
Intelligence Unit.
