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GSM firms may become national carriers

Posted by By Sonny Aragba-Akpore, Asst. Communications Editor on 2006/01/08 | Views: 751 |

GSM firms may become national carriers


THE Nigerian telephone sector is set to be more robust and competitive as the five-year-old licences for the operators of the Global System of Mobile (GSM) communications expire on February 9.

THE Nigerian telephone sector is set to be more robust and competitive as the five-year-old licences for the operators of the Global System of Mobile (GSM) communications expire on February 9.

And with the expiration also goes the exclusive rights that the GSM operators have to date enjoyed.

Already, indications have emerged that two of the current GSM operators, MTN Nigeria and Vee Networks, may join the Nigeria Telecommunications Limited (NITEL) and Globacom as national carriers.

The GSM operators got exclusive licences on February 9, 2001, to run the services for five years, after which the sector would be thrown open for other operators.

Among other reasons canvassed then for the exclusivity was to enable the operators, as pioneers, recoup their investments, particularly the $285 million paid as licence fees and other investments.

The expiration of the exclusivity early next month will usher in a new licensing regime called "unified or convergence licensing regime," according to the Chief Executive of the Nigeria Communications Commission (NCC), Dr. Ernest Ndukwe.

Under the unified licensing regime, an operator can offer one or more services including long distance, international gateway, fixed wirelines and fixed wireless, and broadband Internet among others, Ndukwe explained.

He confirmed that by the new rules, which will be released by the end of this month, MTN Nigeria and Vee Networks (trading as Vmobile) are eminently qualified for carrier status.

With their existing licences, both operators with Nigeria-Mobile Telecommunication (Mtel) and Glo Mobile, offer international gateway services alongside their GSM services.

Mtel is a subsidiary of the NITEL while Glomobile is a subsidiary of Globacom.

"But unified licensing will bring in more carriers including but not limited to MTN Nigeria and Vmobile," Ndukwe said.

He explained that both companies already have gateway operations covered by their GSM licences, while they are already building long span optic fibre rings round the country for the purposes of transmission of traffic.

Ndukwe further explained that laying of optic fibre cables is as a result of poor network infrastructure.

"Infrastructure is a missing link in the country and this is a major plus for these operators as they will be able to carry traffic for smaller operators," he said.

The guidelines for unified licensing are already in the works and will be released by the NCC at the end of the month after being understudied by the NCC board of commissioners.

"Technically, exclusivity period for GSM operators ends by February ending and thereafter unified licensing will take over," Ndukwe confirmed.

He also confirmed that conferring carrier status on the GSM operators would be a natural sequence.

By the nomenclature of the infrastructure being put in place, by MTN and VMobile, it will not be difficult to migrate to carrier status.

Like Globacom and NITEL, both MTN and VMobile will offer fixed line and wireless services. They will also be able to offer broadband Internet services.

Ndukwe however denied that the two companies had applied for the status. "We have to come out with the guidelines before every operator knows what is in it for them. But what we can say for now is that certain operators already have on ground, and even in their existing licences, things that naturally confer on them carrier status."

The new unified licensing begins in March.

He also allayed fears that bigger operators would swallow up smaller ones.

"This fear is misplaced as unified licensing is a win-win situation. It will favour both operators and consumers," Ndukwe said, adding that there would be regional or zonal operators.

"This will further increase competition to the advantage of consumers," added.

On the interconnect imbroglio, Ndukwe said, although, "we had told the operators to resolve the issues amicably on their own, we may have to peg a uniform fee instead of the current disparity which we thought would solve the problem."

Currently, GSM operators pay N5.52 per minute to private telecom operators (PTOs) while the latter pay them N11.52.

The uniform fee will ensure equitable account rate settlement, the NCC boss said.

On the licensing fees to be paid under the unified regime, Ndukwe simply said: "Operators will not pay the same fees, those with large licences are likely to pay more while smaller operators will pay less."

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Comments (3)

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Abieyuwa(Edo, Nigeria)says...

Otasowie means evening life is better than morning life. There is an error in your “evening life is better than evening life”?

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Naija g(Houston, Minnesota, US)says...

Sokari doesn’t mean joy. Joy is Biobela. Go to the village and ask the meaning of the name.

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.