Posted by Abimbola Tooki on
Everywhere you turned in the past year; it seemed there was only one GSM telco in Nigeria: MTN. The introduction of Globacom into the market created some disequilibrium as the company promises to deliver the best network in the entire continent.....
Everywhere you turned in the past year; it seemed there was only one GSM telco in Nigeria: MTN. The introduction of Globacom into the market created some disequilibrium as the company promises to deliver the best network in the entire continent. There is every reason to still believe that. Vmobile was threatened to its very foundation due to lack of trust among the shareholders, who, however, could not muster enough funds to keep the network going until Celtel International came to the rescue. Mtel has remained comfortably in its fourth position because almost everything has gone against its growth. The world is only waiting for the new owner to perform some miracles on the organisation.
This, perhaps, summarises the five years of GSM in Nigeria
The growth of telecom in Nigeria has exceeded all estimates and forecasts. Indeed, the question has not been where the demand is, but instead the question has been how to meet the demand.
Nigeria is often identified as the fastest moving economy and one of the most advanced ICT market sectors in the Africa. It has the largest population in Africa, and Nigerian market's high level of sophistication makes it an exciting and attractive market. In just five years, Nigeria has become the telecom hotspot for both telecom operators and equipment suppliers.
Nigeria now has about 22 million mobile lines and about one million fixed lines, compared with just about 450,000 working lines from Nigerian Telecommunications Limited (Nitel) three years ago
The GSM revolution
The GSM revolution began in August 2001 and changed the face of Information and Communications Technology in Nigeria. But note that the picture will not be complete without mentioning the Private Telephone Operators (PTOs) and other landmarks such as the licensing of Globacom as Nigeria's second national operator (SNO) as well as the licensing of 22 fixed wireless operators.
Since the GSM launch, mobile telephony has rapidly become the most popular method of voice communication in Nigeria. Growth has been so rapid that Nigeria has been rightly described in various fora as "one of the fastest growing GSM markets in the world". Indeed, these developments have been truly explosive.
The impact of the revolution today could be felt from any distance be it in the rural communities where the mobile phone is now used to communicate with the outside world by the youths and the elderly; in emergencies, where it is used in saving lives; in the banking sector where electronic transactions are conducted on mobile phones; oil and gas and; in sports where live pictures and news breaks on sporting events are feed to subscribers in diverse locations in nanoseconds.
Chief Cornelius Adebayo, minister of communications appraising the sector recently at a public function said before August 2001, waiting time to get a telephone line from Nitel lasted more than six months. Today, it is wait and get.
Dividends of GSM
The introduction of GSM in the country has brought with it some noticeable dividends into the country in the last five years. These include foreign capital inflow, stimulation of local investment, increased access to telephony services, job creation, indigenous skills acquisition and technology transfer, revenue generation in licence fees of over $1.1 billion, economic empowerment of local population, phenomenal increase in Nigeria's teledensity as well as increased tax-revenue for government.
The following are, in fact, approximate data relating to GSM deployment in Nigeria in the first five years: Private investment of over $6 billion, improved national coverage of cities, villages and highways, direct employment of over 8,000, large number of franchised dealers nationwide, estimated indirect employment of over 400,000, Nigerian ICT professionals being attracted home, increase turnover for advertising and marketing services, increase in e-commerce and e-banking services, increase banking sector turnover through loans and advances, astronomical increase in traffic volume for other private telecom operators and contribution to Nigeria's GDP: 1-5 per cent increase.
Mr. Olanrewaju Oke, general manager, sales, marketing and distribution at Accelon said he foresees the next revolution to come from data service. He said in the next three years revenues from value added services would outstrip voice telephony. Analysts said value added services like Short Message Service (SMS), ringtones downloads, games, Multimedia Message Service (MMS) like video, picture, e-mail and Internet services would be become more common. Simply put, operators are still scratching the surface of opportunities in the sector.
In the area of data services, the sector has recorded a good number of network operators deploying VSAT and fiber optic local area networks as well as wide area networks for corporate bodies, telecommunications value added service providers and institutions.
Mr. Sean Hsu, chief executive officer, Netcom Africa, said the adoption unified licensing regime for the industry will create more competition which will impact on the cost of the service.
Qualitative factors/ cost
Access is not just about availability. Cost affects usage. High cost is still a barrier. While prices have definitely come down, the cost of access is still too high to have a transformatory impact. There are presently price competition battles going on involving PTOs and GSM providers, which are steps in the right direction. The provision of Internet by PTOs is also helping. But more needs to be done about bringing down call tariffs and rates not just communications acquisition cost. The aim should be low cost Internet and phone service.
While availability has grown, this has not been matched by quality of service. It is not enough to have cheap lines and low cost bandwidth. Efficiency and accessibility of telecom service should be paramount. Most operators have a lot of work to do in quality of service especially in the areas of congestion and support. NCC may have to wield the big stick by sanctioning poor performers.
Poor electricity supply
Epileptic power supply increases the cost of access. Supply of electricity needs to be optimal to enable businesses and banks to provide seamless online services through local areas networks, wide area networks and the Internet. Inefficiency is the word to describe a situation where everybody has to depend on power generators, as the primary, reliable power supply. This constitutes a barrier to growth and sustainable development. The growth of real e-business cannot take place or be of any significance in an environment with unreliable public power supply.