Trends in Telecommunications Market in Nigeria

Transcription

2003-2004
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eShek els Lim it ed
West Africa Office
13 t h Floor , Left Wing
Nigeria St ock Exchange House
2/ 4 Cust om s St r eet
Lagos, Nigeria
Tel: + 234- 1- 8116899
Fax: + 234- 1- 2642852
Em ail: info@eshek els.com
URL: www.eshek els.com
(GLWRULDOE\
Corporat e Planning & Resear ch Depart m ent Team ,
Nigerian Com m unicat ions Com m ission
Com prising: Mrs. M. N.Udum a, B. A. I dris,
O. N. Ugam a, and O. Bam ij oko
Copy right © 2005
Nigerian Com m unicat ions Com m ission
Benue Plaza, Plot 72
Ahm adu Bello Way
Abuj a, Nigeria
Tel: + 234- 9- 2342295, 2342327
Fax: + 234- 9- 2344590, 2344593
Em ail: [email protected]
Web: w ww.ncc.gov.ng
All right s reser ved. No part of t his publicat ion m ay be repr oduced, st or ed in a
ret rieval syst em , or t ransm it t ed in any for m or by any m eans, elect ronic, m echanical,
phot ocopying, recording, or ot herwise, wit hout t he prior w rit t en perm ission of
Nigerian Com m unicat ions Com m ission.
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This
publicat ion
is
a
public
docum ent
and
det ails
t he
7UHQGV LQ
7HOHFRPPXQLFDWLRQV 0DUNHWV LQ 1LJHULD during t he years 2003/ 2004, and is
based on a nat ional indust ry st udy com m issioned by t he Nigerian Com m unicat ions
Com m ission ( NCC) . The st udy was carried out by eShek els Lt d.
The inform at ion supplied herein is subj ect t o change, edit orial review by t he
Com m ission, updat e, and revision at anyt im e, and wit hout prior not ice.
While every car e has been t ak en t o ensure t he accuracy and corr ect ness of
inform at ion supplied her ein, neit her NCC nor any of it s officers m ak es any
represent at ion or warrant y, expr ess or im plied, as t o t he accur acy or com plet eness of
any of t he inform at ion cont ained in t his report or any ot her inform at ion ( whet her
com m unicat ed in writ t en or oral form ) t ransm it t ed or m ade available t o t he r ecipient ,
and each of such part ies expr essly disclaim s any and all liabilit y relat ing t o or fr om
t he use of t his docum ent .
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Definit ions
v
Foreword
vi
Execut ive Sum m ar y
vii
PART A: GENERAL OVERVI EW
1
1. Perform ance of t he Telecom m unicat ions Sect or in Nigeria ( 2003/ 2004)
2
1.1
Overall Sect or Growt h
2
1.2
Mobile Telephony as t he Main Driver of Growt h
5
1.3
Slow but St eady Growt h in Fixed Telephony
6
1.4
I ncreasing Telephone Penet rat ion
8
1.5
Capit al & Net work I nvest m ent Out look
9
1.6
I m pact of Com pet it ion on t he Market
14
1.7
Nigeria: The Leader in African Telecom Market
21
2. Maj or Developm ent s wit hin t he I ndust ry
23
2.1
Sect oral Overview
23
2.2
Services
24
2.3
I nfrast ruct ure
32
2.4
Privat isat ion of t he I ncum bent Nat ional Carrier
33
2.6
Consum er Right s & Prot ect ion
34
2.8
Em ploym ent & Capacit y Building
36
2.9
Regulat ion
38
2.10
Rural Telephony Proj ect
41
2.11
Wire Nigeria ( WiN) Proj ect
42
PART B: OPERATOR OVERVI EW
3.0
44
The I ncum bent Nat ional Carrier – NI TEL
nd
45
4.0
The 2
5.0
Ot her Mobile Telephone Operat ors
47
6.0
Ot her Fixed Telephone Operat ors
50
7.0
Fixed Wireless Access ( FWA) Operat ors
53
8.0
VSAT Service Providers
55
9.0
Long Dist ance/ Met ropolit an Net work Operat ors
57
10.0
12.0
Nat ional Carrier – Globacom
45
I nt ernet Service Providers ( I SPs)
57
Equipm ent Suppliers & Vendors
58
Conclusion: Fut ure Out look
61
Bibliography
62
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I ndex
63
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ARPU - Av erage Rev enue per User
CAGR – Cum ulat ive Average Growt h Rat e
CDMA – Code Division Mult iple Access
DSTV – Digit al Sat ellit e Television
GSM – Global Syst em for Mobiles
I SDN – I nt egrat ed Services Digit al Net work
I SM – I ndust rial, Scient ific & Medical frequency band
I SP – I nt ernet Ser vice Provider
LDO – Long Dist ance Operat or
PNL – Privat e Net w ork Link
POP – Point - of- Presence
PSTN – Public Swit ched Telephone Net w ork
PTO – Privat e Telephone Operat or
SNO – Second Nat ional Operat or
TDMA – Tim e Division Mult iple Access
VPN – Virt ual Privat e Net wor k
VSAT – Very Sm all Aper t ure Term inal
WAN – Wide Ar ea Net w ork
Exchange Rat e – USD$1: N132.85 as at end of Decem ber 2004.
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The gr owt h of t he t elecom s m arket in Nigeria cont inued at geom et ric rat es, t her eby
sust aining t he m ark et as one of t he fast est growing t elecom s m ar ket s globally. From
about 2.3 m illion lines at t he end of 2002, t he num ber of connect ed t elephone lines
increased t o about 4.04 m illion at t he end of 2003 and 10.20 m illion in 2004. This
represent s an average annual growt h rat e of about 115% bet ween 2002 and 2004.
Equally, t he usage and penet rat ion of I nt er net services wit nessed com m ensurat e
growt h. I nt ernet users increased fr om less t han half a m illion in 2002 t o about 1.6
m illion in 2003 t o 1.8 m illion in 2004, represent ing increase in penet rat ion rat es fr om
0.3 in 2002 t o 1.3 in 2003 t o 1.4 in 2004.
This m arket growt h has been sust ained essent ially by a num ber of fact or s, prim ary
am ongst which has been t he cont inued cooperat ion of t he Federal Governm ent of
Nigeria wit h t he Board of t he Com m ission in ensuring virile com pet it ion am ong t he
operat ors t hr ough t ranspar ent , fair and firm policy and regulat ory act ions. Through
t he r egulat ory decisions t aken in 2002, t he increase in t he num ber of act ive players
in t he indust ry gav e im pet us t o increased com pet it ion in ser vice provision, r esult ing
in higher value- for- m oney t o t he end users, wit hout com prom ising t he r et urn on
invest m ent t o t he operat ors.
We r ecognize t hat t he successes r ecorded during t he year s under review
( 2003/ 2004) are well known around t he world, and t hese have cont inued t o at t ract
posit ive at t ent ion t o t he Nigerian m ark et . Howev er , w e also recognize t he need t o
produce appropriat e indices and dat a on t he out com es of our policy and r egulat ory
ov er sight s, so t hat fut ure invest m ent and ot her decisions about t he Nigerian m arket
are based on em pirical st at ist ics. This inform ed t he decision t o com m ission t he st udy
t o assess t he gr owt h of t he Nigerian m arket in relat ion t o ot her m ark et s in Africa and
ot her part s of t he world.
This report is t he second edit ion following t he m aiden edit ion t hat cov er ed t he
periods fr om 1997 t o 2002, which was published in early 2003. Perhaps t he success
of t he first publicat ion, vis- à- vis it s acclaim ed usefulness for r esear ch and planning
purposes, encouraged us t o em bar k on t he second edit ion, and we are proud t o be
associat ed wit h providing verit able inform at ion about our m ark et , wit h which we
could be benchm ark ed against ot her m ark et s, and upon which invest ors could rely for
necessary decisions about our m ark et . Furt her m or e, because w e r ealize t he need for
cont inuit y, we shall publish t he 75(1'6 ,1 7(/(&20081,&$7,216 0$5.(76
,11,*(5,$ annually.
Meanwhile, we hope y ou find t his second edit ion ev en m or e useful t han t he first .
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This report show s t hat t he Nigerian t elecom m unicat ions sect or is curr ent ly
undergoing ver y rapid change and explosive growt h. The liberalisat ion of t he sect or
and t he result ing com pet it ion by privat e operat ors is bringing about ver y subst ant ial
benefit s t o subscribers in t erm s of m uch low er prices and enhanced choice.
I n 2004, t he Nigerian t elecom sect or received global acclaim as one of t he fast est
growing m obile m ark et s in t he world. The m obile sect or has been part icularly pivot al
t o t he growt h of t elecom s in Nigeria. Developing from a 30,000- line subscriber base
at t he beginning of t he m illennium t o 8.5 m illion connect ions at t he end of 2004,
m obile has been an out st anding success. Niger ia is now officially t he largest gr owt h
m ark et for t elecom m unicat ions in Africa and t he Middle East , and possesses t he m ost
vibrant fixed and m obile t elephony com panies in Africa.
The k ey findings in 7UHQGV LQ 7HOHFRPPXQLFDWLRQV 0DUNHWV LQ 1LJHULD are:
3KHQRPHQDO VHFWRUDO JURZWK The t ot al subscriber base for connect ed fixed and
m obile lines r ose by a fact or of five t o 10,201,728 at t he end 2004, an average
growt h rat e of 131% annually. Overall, 7,930,678 new t elephone lines have been
t aken up since Decem ber 2002, a phenom enal increase of 249% . Nigeria’s
t eledensit y has also grown from near zer o at t he t urn of t he m illennium t o about 9%
in j ust four years and t he addressable m ar ket for t elephone subscript ions is now in
t he r egion of 25 – 30 m illion.
6WURQJ SHUIRUPDQFH RI 0RELOH 7HOHSKRQ\ The m obile is playing a huge r ole in
t he dev elopm ent of t he Nigerian econom y and, in less t han four years, GSM has
em erged as an int egral and essent ial part of t he cult ure and life of Nigerians. The
m obile sect or displays t he hallm arks of a vigorously com pet it ive m arket , wit h
operat ors declaring good profit s, and consum er s enj oying lowering prices under a
st able and fairly consist ent r egulat ory regim e. Net new m obile subscriber s exceeded
Sout h Africa – t he cont inent al leader in m obile com m unicat ions - for t he first t im e in
2004, wit h t he count ry ’s m obile subscriber base increasing by 191% t o 9.1 m illion
6ORZHU EXW FRQVLVWHQW )L[HG 7HOHSKRQ\ JURZWK While fixed t elephony has not
m at ched t he pace of gr owt h of it s m obile count erpart , t he t ot al num ber of fixed lines
st ill increased t o 1.027m , an average annual growt h of 16% from 2003. Nearly all
t he new lines wer e pr ovided by privat e operat or s, m any of which began t o offer a
com plet e bouquet of t elecom m unicat ion services for bot h business and individual
user s, including I nt ernet access, high- speed dat a, fax and v oice via a single t erm inal.
Nearly all t he privat e operat or s also offer lim it ed m obilit y, t hus providing a
conv ergent t elecom plat for m .
$WWUDFWLYH ,QYHVWPHQW &OLPDWH Privat e invest m ent int o t he Niger ian t elecom s
sect or has grown t o ov er US$6 billion, from US$50 m illion in 2001, wit h t he sect or
now t he largest generat or of Foreign Direct I nvest m ent ( FDI ) aft er t he Oil and Gas
I ndust r y. Operat or s regularly announce large m ult i- m illion dollar deals wit h t he
biggest players been t he %LJ 7KUHH m obile operat ors. Nigeria also recorded a
cont inent al first when t wo leading privat e equit ies, ACTI S and Em erging Market s
Part nership ( EMP) , invest ed USD$43.2 m illion t hrough AI G African I nfrast ruct ur e
Fund ( AAI F) int o St arcom m s, one of Nigeria’s leading privat e t elecom operat or. This
is one of t he m ost not able Foreign Direct I nv est m ent ( FDI ) in Africa in 2004.
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7HOHFRPVSULFHVFRQWLQXHWRIDOO: Operat or s are cont inually lowering t he prices of
t heir product s and t ariffs. During t he period under r eview:

The price of m obile phone st art er packs crashed from N20, 000 ( USD$145) in
2001 t o N1 ( less t han 1 US cent ) in 2004 for basic prepaid.

Ov erall fixed voice prices fell by an average 24% ov er t he y ear in real t erm s.

Ther e was a 46% dr op in m ont hly dialup I nt ernet subscript ions from an
average of about N5,333 t o N3,000.

VSAT prices dr opped by a fact or of 3 while handset prices fell t o about N13,
000 ( US$92.90) .

I nt ernet access t im e dropped significant ly by over 80% since 1999 wit h
curr ent cost s av eragely N100 ( USD$0.70) per hour at cyber cafés.

The av erage indust ry cost of backbone bandwidt h t o I SPs in Nigeria from
sat ellit e operat or s also went down t o about USD$600 per m ont h for 64 Kbps.
The prim ary r esult of t hese t rends has been t he increase in t he nat ional t elephone
subscriber base t o about 10 m illion for m obile and fixed lines by t he end of 2004.
I n sum m ar y, t his st udy concludes by showing t hat Nigerian t elephone consum er s are
beginning t o get a bet t er deal from t heir t elecom s pr ovider s. Business cust om er s are
also benefit ing from incr eased com pet it ion, and t he count ry’s r elat ive posit ion has
also great ly im prov ed.
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The t elecom m unicat ions sect or is current ly undergoing very rapid change and
explosive gr owt h. Ov er t he past t hree years, in part icular, t he Nigerian
t elecom m unicat ions sect or has begun t o deliver for t he r esident ial and business
consum er. Wait ing list s for t elephone lines have disappeared, while t elephone t ariffs
for local, nat ional and int ernat ional calls are gr adually ranking am ongst t he lowest in
Africa. The liberalisat ion of t he sect or and t he result ing com pet it ion by privat e
operat ors is bringing about very subst ant ial benefit s t o subscribers in t erm s of m uch
lower prices and enhanced choice.
During t he period under review, t he Nigerian t elecom sect or r eceived global acclaim
as one of t he fast est gr owing m obile m arket s in t he world 1 . The t ot al subscriber base
for connect ed fixed and m obile lines rose fr om 2,271,050 at t he end of Decem ber
2002 t o 10,201,728 at year- end 2004, an av erage growt h rat e of 125% annually.
Ov erall, 7,930,678 new t elephone lines have been t ak en up since Decem ber 2002, a
phenom enal increase of 249% .
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10,000,000
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6,000,000
4,000,000
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1999
2000
2001
Fixed lines
2002
2003
2004
Mobile Lines
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The first mention of this fact was made by the International Telecommunications Union in its African
Telecoms Indicators Report presented at the ITU Telecoms Africa Expo in Cairo, Egypt in May 2004.
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Yet t he dem and for m ore lines persist s in Nigeria, Africa’s m ost populous count ry.
Ther e is subst ant ial evidence showing t he deep quest by consum er s not j ust for lines
but also for good qualit y ser vices fr om t he operat or s, a quest t hat m any operat or s
are m aking at t em pt s t o sat isfy by cont inuous infrast ruct ure invest m ent s.
St rong gr owt h is due m ainly t o fierce com pet it ion t o sign up new user s by t he GSM
operat ors and t heir fixed count erpart s. Operat ors ar e cur rent ly engaged in rolling
out , powering and securing t heir net works furt her int o unserv ed or underser ved
part s of t he count ry, wit h t he t r end being urban first , rural lat er.
The t able below sum m arises t he perform ance of t he indust ry over t he past five
years.
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Population
Households
Fixed
Mobile
Total
Internet Users
Internet Penetration
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120,000,000 120,000,000 120,000,000 120,000,000 120,000,000
12,800,524
13,173,020
13,545,516
13,893,868
14,254,520
553,374
600,321
702,000
888,534
1,027,519
35,000
266,461
1,569,050
3,149,472
9,174,209
588,374
866,782
2,271,050
4,038,006
10,201,728
107,194
153,350
420,000
1,613,258
1,769,661
0.1%
0.1%
0.3%
1.3%
1.5%
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Not wit hst anding, t here are obser ved obst acles t o t he cont inuous fut ure growt h of t he
indust ry. These include:
1. Poor public power supply;
2. Poor securit y, infrast ruct ures ar e oft en vandalized;
3. High im port dut y, dut ies on t elecom s equipm ent are in t he region of 30 –
70% ;
4. Ant i- com pet it ive pract ices, wit h som e operat or s alleged t o be form ing cart els
t o frust rat e t he nat ural int erplay of m ark et forces;
2
Source: NCC, eShekels
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5. The t ype and quant um of funds needed by operat ors t o expand operat ions is
scar ce locally; and,
6. High operat ional cost s.
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0RELOH7HOHSKRQ\DVWKH0DLQ'ULYHURI*URZWK
The m obile sect or has been t r em endously pivot al t o t he growt h of t elecom s in
Nigeria. Developing from a 30,000- line subscriber base at t he beginning of t he
m illennium t o 9.174 m illion connect ions at t he end of 2004, m obile has been an
out st anding success. Nigeria is now officially t he largest growt h m ark et for
t elecom m unicat ions in Africa and t he Middle East , and possesses t he m ost vibrant
fixed and m obile t elephony sect or s in Africa.
Net new m obile subscriber s exceeded Sout h Africa – t he cont inent al leader in m obile
com m unicat ions - for t he first t im e in 2004, wit h t he count ry’s m obile subscriber
base incr easing by 191% t o 9.174 m illion ( See t able 2 below) .
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Turkey
35.443
7.190
Nigeria
9.174
6.024
25.45
191.3
South Africa
18.935
3.305
21.14
Saudi Arabia
9.162
1.812
24.65
Tunisia
3.713
1.762
90.26
Morocco
9.094
1.734
23.56
117.72
Algeria
3.156
1.706
Egypt
6.995
1.366
24.26
Syria
2.174
1.034
90.74
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Furt herm or e, in t erm s of com pet it ive m ark et st ruct ur es, m obile has becom e t he
st rongest t elecom s sub- sect or , as all t he four com pet ing operat or s engaged t he
m ark et ev en m or e aggressively during 2003/ 4. I n alm ost all aspect s, t he m obile
sect or displays t he hallm arks of a vigorously com pet it ive m ark et w it h operat ors
declaring good profit s, consum er s enj oying lowering prices under a st able and fairly
consist ent r egulat ory regim e.
I ncreased net w ork congest ion due t o st rong dem and for services by consum er s
howev er result ed in a slow down of sales by m any of t he t elecom s oper at ors in 2003
as t he regulat or insist ed on t he increase of net work capacit y t o accom m odat e t he
high dem and. The sale of pr e- paid packages was init ially slowed down t hrough
increased connect ion fees by som e of t he oper at ors, not ably MTN and Vm obile, and
subsequent ly t hrough infrequent t em porar y rest rict ions on t he sale of pr e- paid
packages, oft en self- im posed, or order ed by t he regulat or. Four y ear s int o t he m obile
revolut ion, queues of vendor s and ot her cust om ers who have com e t o lodge
com plaint s can st ill be observ ed at m any operat or out let s or “ friendship cent res” .
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At t he end of 2004, MTN was t he largest net wor k in t erm s of subscribers, wit h a
m ark et share of 42 per cent , a 10% drop ov er 2003 figures. Vm obile and Globacom
had 24 per cent subscriber m ar ket shar es each, wit h t he lat t er aggressively claim ing
m ark et shar e fr om t he older operat ors. The fourt h operat or, MTEL, had a m arket
share of 10 per cent . The chart s below show t he m ark et shar e t rend ov er t he past
t wo y ears.
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The m obile is playing a huge role in t he dev elopm ent of t he Nigerian econom y and,
in less t han four y ears, GSM has em erged as an int egral and essent ial part of t he
cult ure and life of Nigerians.
6ORZEXW6WHDG\*URZWKLQ)L[HG7HOHSKRQ\
Privat e t elecom s operat or s have been t aking full advant age of t he r elat ive inact ivit y
of NI TEL and t he newly licensed Second Nat ional Operat or, Globacom , whose bask et
of licenses includes fixed services.
Though about 24 privat e operat or s offer fixed line services, NI TEL cont inues t o be
t he dom inant net work in t erm s of revenues, m ark et capit alisat ion and invest m ent ,
and is larger t han all of it s com pet it ors put t oget her . How ev er, t he for m er t elecom s
m onopoly is sub- opt im ised and curr ent ly carries t he burden of an alm ost unending
privat isat ion program .
Underst andably, fixed t elephony com pet it ion has com e m ainly from a few of t he
privat e operat or s, who are aggr essively engaging t he m ark et wit h product s running
3
Source: NCC, eShekels
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on CDMA- based Fixed Wireless net work s. The t echnology shift has, howev er , brought
about som e new invest m ent act ivit y, as som e of t he privat e players at t em pt t o
ext end t heir net work coverage bey ond urban ar eas.
New fixed operat ors t hat launched in 2003/ 4 include:

MTS First Wireless

Rainbownet

St art ech Connect ions

Swift Net works
Not wit hst anding t he foregoing, t he rat e of fixed t elephone subscript ions has not
m at ched t he pace of m obile. While t he t ot al num ber of fixed lines increased t o
1.027m , only 138,985 net new fixed lines wer e connect ed bet ween 2003 and 2004.
This represent s an av erage annual growt h of 26% or one- t ent h of t he speed of
m obile acquisit ions. Priv at e operat ors provided nearly all t he new lines.
The slow er gr owt h of fixed r elat ive t o m obile can be at t ribut ed t o:
1.
Cont inuing delays in t he privat isat ion
incum bent ’s abilit y t o inst all new lines.
of
NI TEL t hus
lim it ing
t he
2.
The at t ract ion of m obile t o m aj orit y of t elephone user s.
3.
The r elat ive weak financial st rengt h of m any of t he fixed operat ors
com pared t o t heir m obile count erpart s.
Nev ert heless, Nigeria is st ill t he m ost act ive fixed t elephony m ar ket in Africa, and
rat e of connect ing new lines by Privat e Telephone operat ors ( PTOs) has been abov e
average. PTOs now cont ribut e about a t hird of all fixed t elephone subscr ipt ions in t he
count ry . Figure 3 below show s t he com parat ive perform ance of NI TEL and t he
privat e t elcos wit h respect t o t elephone connect ions.
NCC © 2005
Page 7
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At t he close of 2004, t he fixed t elecom m unicat ions indust ry began t o face
fundam ent al challenges, part icularly in t he area of capit al adequacy and liquidit y. I t
is ant icipat ed t hat t hese challenges w ould be addressed in 2005.
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Teledensit y is a m easure of t he penet rat ion of t elephone lines wit hin a t errit ory .
Nigeria’s t eledensit y has gr own from near zero at t he t urn of t he m illennium t o about
8% in j ust four years. The addr essable m ark et for t elephone subscript ions is now in
t he 25 – 30 m illion region.
NCC © 2005
Page 8
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1999
2000
2001
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According t o t he Honourable Minist er for Com m unicat ions, Chief Cornelius Adebayo,
invest m ent int o t he Nigerian t elecom s sect or has grown from US$50 m illion t o over
US$6 billion over t he past four year s. I t is probable t hat t his figure is underst at ed as
m any of t he operat or s, being privat ely owned; t end t o abst ain from m aking public
capit al expendit ure announcem ent s. Nev ert heless, it is generally believed t hat a
significant am ount of t elecom s invest m ent s has been generat ed int ernally ( wit hin t he
count ry) .
The growt h in t elecom invest m ent in Nigeria is as st at ed below:
4
Includes 2004 estimates for some PTOs. Source: NCC
NCC © 2005
Page 9
3ULYDWH,QYHVWPHQWLQ7HOHFRPLQ1LJHULD
(1999 - 2004)
P
P
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P
P
P
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Principal corporat e invest ors include First Bank, St anbic, Zenit h, Diam ond Bank,
Guarant y Trust , St andard Chart ered, am ong ot hers, as well as sev eral st at e
governm ent s, not ably Lagos, Delt a and Akwa I bom . Nigerian banks also regularly
for m syndicat es t o provide wor king capit al for m any t elecom s com panies in t he
absence of adequat e offshor e facilit ies.
Announced invest m ent s, cont ract s and deals during t he review period include:

¼P WXUQNH\ FRQWUDFW DZDUGHG LQ )HEUXDU\ E\ *OREDFRP WR WKH
French vendor Alcat el, for t he inst allat ion of 1 m illion m obile lines, 100,000
fixed lines, 3 int ernat ional gat eways, and a nat ional fibre- opt ic backbone.

US$395m facilit y t o MTN by a syndicat e of 14 Nigerian banks, led by St anbic
Bank, and St andard Chart ered ( London) in Novem ber 2003, as part of MTN’s
USD$1.3m capit al expendit ure budget .

US$250m facilit y t o MTN5 by anot her bank consort ium led by GTB in Oct ober
2004, for net work infrast ruct ure.

US$70m net work upgr ade invest m ent by St arcom m s in March 2003, in
separat e cont ract s t o LM Ericsson and Huaw ei Technologies.
5
The MTN Group publicly announced this in its home country of South Africa where it has mandatory
public disclosure/ reporting requirements.
NCC © 2005
Page 10

US$120m equipm ent finance deal bet ween LM Ericsson and Vm obile in 2003,
for t he inst allat ion of a nort h/ sout h t ransm ission backbone.

US$200m cont ract awar ded by Globacom t o Siem ens, for net w or k inst allat ion
in Nort hern Nigeria, in Februar y 2003.

US$17m wireless net work pr ovisioning cont ract , t o Har ris Net work s, by Odua
Tel, in January 2003.

US$110m radio net work cont ract awarded by Vm obile in February 2004 t o LM
Ericsson.

US$145m net work expansion cont ract awarded by Relt el in April 2003 t o LM
Ericsson.

US$53m GSM cont ract awarded by NI TEL t o LM Ericsson in April 2003.

US$7m invest m ent by Huawei in est ablishing a m ult i- product t raining cent r e
in Abuj a.

Cum ulat ive US$650m net work invest m ent by MTEL as at April 2004, in
separat e cont ract s t o Mot orola, ZTE, Huaw ei and LM Ericsson.

US$12m net wor k upgr ade cont ract awarded by I nt ercellular t o Mot or ola in
July 2003.

MTN says it spent USD$620m on capit al expenses incurr ed by it s Nigerian
operat ion bet w een Mar ch and Sept em ber 2004 6 . Am ount was spent m ainly t o
build 344 base st at ions and 6 swit ches.
Furt herm or e, a num ber of int ernat ional agencies and m ult ilat eral inst it ut ions have
also been invest ing in t he Nigerian t elecom s indust ry. These include t he I nt ernat ional
Finance Corporat ion ( I FC) - t he privat e sect or arm of t he World Bank Gr oup - which
received t he “ Africa Telecom s Deal of t he Year” award at Eur om oney ’s Proj ect
Finance Magazine 4t h Annual Awards Dinner at t he Millennium Hot el, London ( UK) ,
for it s key role in t he US$395m illion syndicat ed loan t o MTN Nigeria. I FC cont ribut ed
US$100 m illion t o t he financing package, represent ing about a quart er of t he ent ire
deal package, and one of it s largest ev er invest m ent s in t he t elecom m unicat ions
sect or . I FC’s cont ribut ion t o t he deal was also t he corporat ion’s second largest
invest m ent in Africa so far. Ot her int ernat ional agencies invest ing locally include t he
Export - I m port Bank of t he US ( US Exim Bank) , African Export - I m port Bank
( Afrexim ) , African Dev elopm ent Bank ( ADB) , Dev elopm ent Bank of Sout h Africa
( DBSA) , and DMO Germ any.
Two leading privat e equit ies, ACTI S and Em erging Mark et s Part nership ( EMP) ,
invest ed USD$43.2 m illion t hrough AI G African I nfrast ruct ur e Fund ( AAI F) int o
St arcom m s, one of Nigeria’s leading privat e t elecom operat or s. This is one of t he
m ost not able For eign Direct I nv est m ent s ( FDI ) wit hin t he t elecom s sect or in 2004.
St arcom m s is t he first business of it s t ype t o at t ract int ernat ional privat e equit y in
Africa. The t ransact ion also repr esent s one of t he m ost significant for eign direct
invest m ent deals in Nigeria and is clearly indicat ive of t he progr ess m ade in Nigeria
since dem ocrat ic rule w as r e- est ablished in 1999. The com pany plans t o use t he new
invest m ent t o accelerat e t he roll out of ser vices acr oss Nigeria. The com pany
curr ent ly operat es in Lagos, Kano and Borno St at es.
6
Source: MTN Group Financials, Sept 2004
NCC © 2005
Page 11
Equit y invest m ent s int o t he I nform at ion and Com m unicat ions ( I CT) sect or const it ut e
about 56% of t ot al invest m ent s m ade by Nigerian banks under t he Sm all and
Medium Ent erprises I nvest m ent Schem e ( SMI EI ES) . The schem e provides for a
set t ing aside of 10% of annual profit by t he banks, for equit y invest m ent in sm all
and m edium businesses. An out line of sect oral invest m ent s under t he program m e is
shown in t he chart below.
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Construction
USD$2.9m
(16%)
Agro-allied
USD$1.9m (10%)
÷ø ù
USD$10.2m (56%)
Manufacturing
USD$3.3m (18%)
)+* ,.- /Y0ôúO4;.0;T%Ql: /lD767û* @Q/C* M.-+Q* : <Þ:SgLW+W>W<+ó;0;@%QUô07<Ql@ü
Nigeria im poses no lim it at ions what soever on for eign invest or s and allows 100 per
cent for eign ownership of invest m ent s. Foreign invest ors ar e also fr ee t o repat riat e
t heir capit al out of t he count ry . Addit ional int ernat ional invest m ent s are expect ed in
t he com ing years as t he business clim at e cont inues t o im prov e.
1HWZRUN5ROO2XWV
The m aj orit y of t he act ive operat ors hav e awarded cont ract s for t he expansion of
t heir net wor ks int o t he hint erland. Operat or s wit h aggressive net wor k r ollout s
include MTN Nigeria, Vm obile, Globacom , I nt ercellular, and St arcom m s. I nt ernet
com panies t hat are also act ive in net work gr owt h include Accelon, Direct - on- PC, GS
Telecom , Linkserv e, Br oadband Technologies, and Koochi Com m unicat ions, am ong
ot her s. At t he end of 2004, at least 100 Nigerian t owns had prim ary cov erage fr om
t he t elephone operat or s.
7
Source: Central Bank of Nigeria (CBN), eShekels
NCC © 2005
Page 12
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¬þ Specific exam ples of net wor k expansion act ivit y during t he period include:
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Faced wit h an over- burdened nat ional t ransm ission net work operat ed by t he
incum bent NI TEL, near ly all t he m obile oper at ors hav e invest ed in building and
running t heir own t ransm ission infrast ruct ur e. The first t o com m ission it s own
backbone net work, in January 2003, was MTN. Called < KHOOREDKQ, t his net work is
reput ed t o be t he longest t ransm ission backbone of any m obile oper at or in Africa.
The US$120m m icrowave t ransm ission backbone spans som e 3,400km , and
t raverses 120 t owns.
The inst allat ion of a second phase, < KHOOREDKQ ,, t hen began in July 2003 wit h t he
aim of quadrupling capacit y on t he m ost heavily congest ed links, and spanning som e
4,500 km . The goal of t he proj ect was t o r educe dropped calls and increase call
com plet ion rat es by four t im es.
9PRELOH7UDQVPLVVLRQ%DFNERQH
Vm obile Nigeria received a US$75m loan facilit y, guarant eed by t he US Exim Bank
from Allst at es Bank of Balt im ore ( USA) , t o build it s t ransm ission back bone in order
t o link t he nort hern and sout hern part s of t he count ry. The m oney has been ut ilized
and t he t ransm ission backbone is working, alt hough it is yet t o be officially
com m issioned.
8
Source: eShekels, from operator information.
NCC © 2005
Page 13
*OREDFRP V)LEUH2SWLFV5ROO2XW
Globacom , Nigeria’s Second Nat ional Operat or , has been aggr essive in rolling- out
fixed and m obile infrast ruct ure across t he count ry . Recent ly, t he com pany
announced plans t o build it s own fibre opt ic subm arine cable linking Nigeria t o t he
Unit ed Kingdom . I nt ended t o com pet e wit h NI TEL’s exclusive access t o t he SAT3/ West Africa Subm arine Cable ( WASC) linking Sout hern and West ern Africa t o
Eur ope, t he proj ect is est im at ed t o be valued at around US$170m .
*60%DVH6WDWLRQV
The t ot al num ber of inst alled GSM base st at ions as at Decem ber 2004 is est im at ed,
from published sour ces, at 1,930 ( See t able below for det ails) .
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Prior t o GloMobile’s launch in August 2003, MTN and Vm obile ( t hen Econet Wireless
Nigeria) dom inat ed t he GSM sect or. Bot h operat ors charged subscriber s N50
( USD$0.36) per m inut e for calls despit e com plaint s of poor services. They also
dism issed pr essure t o int roduce per second billing ( PSB) , saying it was not
im m ediat ely feasible.
But t he ent rance of GloMobile in August 2003 changed t he com pet it ive landscape.
The com pany ent er ed t he m ar ket place wit h “ per second billing” from t he out set . I t
followed up wit h a variet y of innovat ive packages t hat endeared it t o m any t elephone
user s. One of t hese was a popular product t arget ed at low- incom e ear ners who could
acquire st art er pack s t hrough inst alm ent paym ent s t ak en off t heir airt im e cr edit .
Now t he m ar ket is awash wit h at t ract ive packages t hat are slowly lowering t ariffs,
and t he price of st art er packs have crashed fr om N20,000 ( USD$145) in 2001 t o N1
( less t han 1 US cent ) in 2004 for basic prepaid. The prim ary r esult of com pet it ion is
t he increase in t he nat ional t elephone subscriber base t o about 10 m illion for m obile
and fixed lines by t he end of 2004.
9
NCC © 2005
Page 14
Wit h t he crash in t he pr ice of SI M cards, t he num ber of subscribers is increasing wit h
great er incom e available t o m any operat ors t hr ough t he sale of rechar ge cards.
Com pet it ion has also provided t housands of new j obs and im proved t he dept h and
professionalism of t he indust ry. Close t o 4,500 have been direct ly em ployed by t he
GSM operat or s and an est im at ed 500,000 Nigerians are benefit ing from indirect
em ploym ent generat ed by t he GSM operat ors.
3HU6HFRQG%LOOLQJ36%
Per second billing event ually cam e on st ream as a response t o public dem and and
duly put pressur e on all t he ser vice pr oviders. Prior t o t his happening, t he only
m et hod by which t elecom s com panies billed subscriber s was on a m inut e- by- m inut e
basis. Globacom com m enced per second billing on 27 August 2003, followed by
Vm obile on 26 Nov em ber 2003, MTN on 1 Decem ber 2003 and MTEL on 17
Decem ber 2003. Tw o of t he privat e t elecom operat ors ( PTOs) , Mobit el and VGC
Com m unicat ions, also flagged off PSB on Decem ber 1, 2003, as a response t o public
dem and for t he service.
The shift t o per second billing was bound t o ( and did) expose and put pressur e on
t he inadequacies of t he count ry ’s t elecom m unicat ions infrast ruct ure. A couple of
operat ors had t o suspend m igrat ion t o PSB t o avoid syst em collapse a few weeks
aft er com m encing t he service. At t he m om ent , however, PSB m igrat ion on t he
m aj orit y of net work s is flawless.
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High- level com pet it ion and rapid changes in t echnology ar e working t oget her t o
reduce operat or m argins. I ncr eased com pet it ion is st im ulat ing call price r educt ions,
m ost obviously t hrough t he launch of NI TEL’s new t ariff st ruct ure in May 2004, and
t hrough t he bullish m arket ing of Globacom , and of lat e, Vm obile.
Ov erall fixed voice prices fell by an average 24% ov er t he year in real t erm s. This
st udy show s t hat Niger ian t elephone consum ers ar e beginning t o get a good deal.
While business cust om er s are also benefit ing from increased com pet it ion, t he
count ry ’s r elat ive posit ion has great ly im prov ed in t erm s of price reduct ions.
Also, each of t he m aj or I SPs has announced price r educt ions for t heir broadband
services ov er t he period. For inst ance, t her e was a 46% drop in m ont hly dialup
I nt ernet subscript ions from an average of about N5,333 t o N3,000 at t he end of
2004.
NCC © 2005
Page 15
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2000
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2000
2000
5000
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Sim ilarly, t he t rend of dropping prices is also wit nessed in t he prices of VSAT
equipm ent . ( VSATs ar e increasingly becom ing popular as a prim ary m eans of
I nt ernet access in t he count ry) . VSAT prices have dropped by a fact or of 3 bet w een
2003 and 2004. I ncreasing com pet it ion has helped t o cont ribut e t o furt her price
reduct ions during t he period.
3ULFHVRI96$7(TXLSPHQW
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Linkserve
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462,000
435,600
450,000
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435,600
380,000
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316,800
289,000
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I n t he GSM m ark et , t he prices of SI M cards have crashed from N13,000 ( USD$148)
in 2002 t o N1 ( less t han 1 US cent ) in 2004 for basic pr epaid as t he t able below
shows.
NCC © 2005
Page 16
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The price of handset s is falling t oo. Fixed wireless t erm inals are now going for about
N13,000 ( US$92.90) on average, as t he t able below shows.
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27,000
19,000
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46,000
35,000
35,000
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15,000
15,000
15,000
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21,000
21,000
21,000
25,000
18,000
18,000
25,000
22,000
22,000
19,000
17,000
17,000
35,000
9,500
9,500
10,000
10,000
10,000
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18,000
22,000
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6,500
10,000
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NI TEL announced a r educt ion in it s nat ional t ariffs in June 2004, wit h calls from one
geopolit ical zone t o anot her charged at N22.00, N20 down fr om t he previous rat e of
N42, while calls wit hin t he sam e geopolit ical zone w er e placed at N12. Local calls
wer e how ev er raised by N2.20 t o N6.50. Calls t o GSM num ber s were also r educed t o
N26 from N30. MTEL also publicized a 54% reduct ion on it s int ernat ional call rat e in
Februar y 2004, j ust as it sliced off 38% on SI M pack s. MTEL’s subscr ibers now pay
N45 per m inut e for int ernat ional calls, down fr om N99, and cur rent ly buy SI M pack s
for N1,000 down from N10,500. GSM t ariffs have also been dr opping acr oss t he
various calling bands as shown below:
10
11
NCC © 2005
Page 17
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120
100
M NL
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80
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60
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Befor e t he new r at es, nat ional calls wer e m et er ed wit h pulses, and t ariffs w er e based
on t he radial dist ance bet w een t he caller and t he called part y. The longer t he
dist ance, t he fast er t he pulse burns out . Short er dist ances at t ract ed lower charges.
Som e operat ors hav e however v oiced out fears as t o t he sust ainabilit y of t he cur rent
low- price regim e.
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The crash in price of t elephone lines is caused by t he need of operat or s t o get m ore
subscriber s, but som e pract it ioners fear t hat t his m ay lead t o net w or k congest ion in
t he long run. They fear t hat t he crash in price m ay not last , because of increased
ov erhead cost , as it t akes up t o 5 t o 8 y ear s t o m ake free cash flow in t he indust ry.
Ot her s how ev er insist t hat t he crash in prices is sust ainable, because m or e
subscriber s m ean m or e profit for operat ors.
12
NCC © 2005
Page 18
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Since nearly all of t he operat or s are privat e ent it ies, t hey are not obliged t o disclose
inform at ion about t heir financial perform ance, except for MTN, whose figures, being
list ed on t he Johannesburg St ock Exchange, are m or e r eadily available for public
scrut iny. From diverse indust ry sources, EBI TDA m argins of 40% and above ar e
quit e t ypical of t he m aj orit y of Nigerian t elecom s oper at ors.
I n it s figures for t he half- year ended 31 Decem ber 2003, Vm obile declared a net
profit of N22billion ( US$160m ) fr om about one m illion lines. Vm obile’s full year net
profit for 2003 was US$480m . Sim ilarly, MTN is report ed t o have earned about N150
billion ( US$1.09bn) in it s second full year of operat ions in Nigeria.
An exam ple of t he pr ofit abilit y of t he indust ry com es by exam ining t he Gr oup
account s of MTN. For t he first t im e in it s t en- year hist ory , t he MTN Gr oup becam e
m or e profit able t han Vodacom in 2003 and r ose t o becom e t he m ost profit able
t elecom s com pany in Africa. I t s net pr ofit of R2.1 billion for t he six m ont hs ended
Sept em ber 30, 2003 was R700 m illion higher t han Vodacom 's, t hough bot h firm s had
sim ilar rev enues. The key t o MTN's recent success has been it s forays int o t he
Nigerian m arket , wher e it has been adding nearly a m illion subscribers t o it s net work
ev ery y ear .
While profit s hav e been generally posit ive for m ost operat or s, t her e appear s t o be a
drop in Average Rev enue per User ( ARPU) wit hin t he indust ry over t he past t hree
years. High rat es of USD$55 ( 2002) per user per m ont h have pr ogr essively given
way t o new figures of USD$48 ( 2003) and USD$44 ( 2004) . The decline is
at t ribut able t o sev eral fact or s including lowering t ariffs, increasing penet rat ion, and
apparent gr owt h in low- incom e subscribers. Nev ert heless, Nigeria’s ARPU rat es ar e
nearly double t he African average of USD$25 per user per m ont h.
How ev er, it has not been all sm oot h sailing for t he indust ry. News t hat Nigerian
Telecom m unicat ions ( NI TEL) suffer ed a NGN19 billion ( USD145 m illion) loss in 2003,
com pared t o a pr ofit of NGN8 billion in 2002, shock ed t he indust ry. According t o t he
t elco’s form er m anagem ent cont ract ors, Pent ascope I nt ernat ional, t he heavy
budget ary deficit com pr ised an NGN5 billion operat ional loss, pension fund provision
of NGN6 billion, and a debt w rit e- off of NGN8 billion. I n addit ion, NI TEL ow es a
furt her NGN14.8 billion t o ot her operat ors, alt hough Pent ascope claim ed t he operat or
is owed NGN27 billion in out st anding account s. React ing t o crit icism of t he figures
from t he Nigerian Senat e Com m it t ee, NI TEL’s m anagem ent claim ed t he operat or’s
account s w ould ret urn t o t he black in 2004, following an ant icipat ed 15% increase in
t ot al rev enues.
,QQRYDWLYH6HUYLFHVDQG$SSOLFDWLRQV
Many operat or s launched innovat ive product s and applicat ions during 2003/ 4. Som e
of t hese include:

Wireless I nt ernet ( Mult ilinks/ I nt ercellular/ Relt el/ Cellcom / St arcom m s)

Fleet Managem ent & Vehicle Tracking Syst em s ( Globacom / MTN)

SMS- t o- Em ail ( Globacom / Vm obile)

GPRS/ Lim it ed I nt ernet Access ( Globacom )
NCC © 2005
Page 19

Mult im edia Messaging Ser vices ( Globacom )

Fax Messaging ( MTN/ Globacom / Vm obile)

Mobile Banking ( Globacom )

Mobile Com m erce ( MTN/ Vm obile/ Globacom / MTEL)
2WKHU(IIHFWVRI&RPSHWLWLRQ
•
High overheads ar e a challenge.
•
The ent r y point for subscriber s in t he fixed t elephone sect or is st ill
prohibit ively expensive, despit e crash in int ernat ional and nat ional rat e.
•
The need t o em ploy com pet ent st aff considering t he exist ing gap bet ween t he
skills and capabilit y needed and what is available t o m eet t he growt h of t he
indust ry. Operat ors are of t he opinion t hat t he qualit y of local personnel is not
as high as it should be, and want NCC and gov ernm ent t o t ak e capacit y
building and t raining ver y seriously. Ot herwise, expat riat e skills will have t o
be pulled in, furt her incr easing t he cost of operat ion.
•
Sust aining cust om er ser vice is a huge problem in t he absence of t he
com pet encies r equired t o so do.
NCC © 2005
Page 20
1LJHULD7KH/HDGHULQ$IULFDQ7HOHFRP0DUNHW
Africa’s rapid subscriber growt h, t he fast est in t he world in percent age t erm s, has
been at t ribut ed part icularly t o cont inued vigorous growt h in Nigeria, and Sout h
Africa. How ev er, Nigeria possesses t he st r ongest m obile com m unicat ions gr owt h rat e
am ong African count ries, as t he chart below shows.
0RELOH&HOOXODU6XEVFULEHUV$QQXDO$YHUDJH
*URZWK5DWH
uuvn7p
t p
r
monp
monp
q
wxy0z7{0| z~}'!yv| xzo
mp
qor
hv
p
03y
qos
p
}'| z
}v| xz
0| yv| z
E "1%JD;h"%17þ'#[J
7O
[&
.ÿ" %
%1"% 2þ+ "'*? ;o 2þ"Bv
I n t he sam e v ein, Nigeria has risen abov e Egypt and Kenya t o becom e t he t hird
biggest m arket in Africa by m obile subscript ions, as shown in t he t able below.
$IULFD
V/HDGLQJ0RELOH0DUNHWV
/DWHVW 3UHYLRXV
&RXQWU\
5DQNLQJ 5DQNLQJ
1
1
South Africa
2
2
Morocco
3
5
Nigeria
4
3
Egypt
5
4
Kenya
^`U]3V
13
EMC, eShekels
6XEVFULEHUV
2FW
21,135,300
8,077,100
8,076,544
6,575,320
2,928,910
&KDQJH
-XQ
2FW 19,595,000 14,276,030
32%
7,790,000
6,942,650
14%
5,950,138
2,430,200
70%
6,178,190
5,311,110
19%
2,750,000
2,117,170
28%
ý;þ?ÿ ?"+;% 2þ *.+þA F&.
+ÿ &þ4004*
Source: ITU, eShekels
NCC © 2005
Page 21
The percent age change from 2003 is t wice t hat of t he dom inant GSM m ark et , Sout h
Africa. Furt herm ore, Nigeria’s cont ribut ion t o Africa’s m obile subscript ions has grown
from 2% in 1995 t o 10% in 2004.
%HQFKPDUNLQJ1LJHULD
V0RELOH*URZWK$JDLQVW$IULFD
80,000,000
¡¨
70,000,000
¨
60,000,000
¥ ¡©
§
12%
10%
8%
¥¦ 50,000,000
40,000,000
¤¢
6%
30,000,000
£
¡¢

4%
20,000,000
2%
10,000,000
0
0%
1995
1LJHULD
2002
$IULFD
2003
2004
1LJHULDDVRI$IULFD
E 1Q'(23Vþ4 Fª« þ *h#«
H;«þ *7;%4 2þ
14
14
Source: EMC, Informa Telecoms, eShekels
NCC © 2005
Page 22
0DMRU'HYHORSPHQWVZLWKLQWKH,QGXVWU\
6HFWRUDO2YHUYLHZ
The t able below list s t he key issues affect ing t he Nigerian t elecom s indust ry:
)L[HG
7HOHSKRQ\
0RELOH
7HOHSKRQ\
,QWHUQHW
3ULFH
4XDOLW\RI
6HUYLFH&XVWRPHU
6DWLVIDFWLRQ
6HUYLFH
&KRLFH
$FFHVVWR
6HUYLFHV
&RPSHWLWLRQ
Prices compare
well with other
African countries.
Price drops now
commonplace
Relatively better
levels of consumer
satisfaction,
compared to mobile
Wide range
of tariff
structures
and bundling
options
Low
penetration
and
expansion by
operators.
Outside the
main cities,
the only
choice
available to
majority of
consumers is
NITEL
More
competition
in calls and
line
acquisition,
though the
dominant
access
infrastructure
is still
NITEL’s
Prices for prepaid
SIM packs have
dropped to nearzero, while there
have been no
announced
increases in
tariffs since 2001
Low levels of
consumer
satisfaction.
Intolerably high
levels of call
attempts, dropped
calls, etc.
Full range of
2G and 2.5G
packages
now
common.
Market is
moving in the
direction of
3G
Mobile is
providing
nearubiquitous
coverage
across the
federation.
All the states
now have
mobile
networks
Intensive
competition,
inspired in
the main by
the bottom 3
mobile
companies
Broadband is
replacing
narrowband
Internet access
e.g dial-up;
higher speed
broadband
generally more
expensive
Low levels of
satisfaction with
service providers,
even lower
satisfaction with
narrowband;
providers unable to
guarantee QoS
Limited range
of service
options;
operators
have
commoditised
services. Low
industry
innovation
Access to
services is
limited; for
most users
the only
available
option is
cybercafés.
Highly
fragmented
market, no
dominant
operator.
Industry
heavily
dependent on
high cost of
international
satellite
operators
ý;þ?ÿ ?h
J H;«þ /* *[
Jª« 4 þý 2+
?*8$24
NCC © 2005
Page 23
6HUYLFHV
0RELOH7HOHSKRQ\
The m obile m arket cont inues t o gr ow . By t he end of Decem ber 2004, t her e wer e up
t o 9.1 m illion m obile subscriber s in t he count ry , r epr esent ing annual growt h of about
180% ov er t he pr evious year. I t was observ ed during t his st udy t hat inconsist encies
in report ing m ake it difficult t o produce a precise est im at e of t he t ot al num ber of
m obile cust om ers; how ev er t he Com m ission w ill cont inue t o w ork wit h operat ors t o
im prove t he com parabilit y of t he figures.
Globacom began operat ions in August 2003 wit h t he launch of a wide range of
product lines, first in Abuj a, followed by I badan and Lagos. I t also st art ed t he first
per second billing oper at ion in t he count ry, challenging ot her operat or s t hat had
init ially said per second billing was not feasible. Globacom ’s challenge and offer
brought in a plet hora of inundat ions from subscriber s t hat ot her GSM operat ors
should im plem ent t he sam e plat form .
Globacom rolled out t he first per second billing plat form in t he nat ion wit h various
product port folios t o accom m odat e differ ent lev els of subscriber s. The com ing of
Globacom ’s GSM net w ork Glom obile put pressur e on ot her net works t hat had
claim ed t hat per second billing was expensive for t he subscribers. They also insist ed
t hat it was expensive t o set up t he plat form and t hat it would only be possible from
2007. The com m encem ent and int roduct ion of per second billing put ot her operat ors
on edge and t he r eal fight for subscriber s began earnest ly. Glom obile st art ed wit h
80kobo per second billing on it s popular prepaid and offered lower t ariffs on ot her
prem ium product s.
April 1, 2004, Vodacom signed a m anagem ent agreem ent wit h Econet Wireless t o
m anage it for 18 m ont hs preparat ory t o ev ent ual acquisit ion of 51% shareholding.
This agreem ent led t o Econet changing it s nam e t o Vee Net work s and brand nam e t o
Vodacom Nigeria.
Out of t he blue, in what was a r eal shock t o t he nat ion, Vodacom , on May 27, 2004,
pulled out of Nigeria cit ing lack of t rust and cor porat e gov ernance on t he part of t he
Board of Vee Net w or ks.
Vee Net work s had t o rebrand t o Vm obile wit hin 48 hour s wit h it s execut ives swift ly
rest rat egising t o re- claim lost ground. Vodacom ’s pullout from Nigeria caused
hyst eria in t he t elecom world and quest ioned Nigeria’s corporat e gov ernance rules.
NCC issued a st at em ent t hat it was going t o invest igat e t he circum st ances
surr ounding t he pullout .
Vodacom ’s exit however, calm ed t he nerv es of t he t op shot s at MTN Group Sout h
Africa, who had been t inkering wit h how t o count er t he ent rance of Vodacom int o
Nigeria, Africa’s fast est growing m ark et .
0RELOH5HYROXWLRQ
The dynam ism of t he m obile operat or s has m ade m obile out pace fixed by every
m easur e. Technological advances have also m ade m obile r oll out m uch fast er t han
it s fixed count erpart .
Aft er t est ing t he t err ain in 2001 and 2002, t he cellular operat or s had fully
est ablished t hem selves in 2003. By t he beginning of t hat year, MTN was t he clear
NCC © 2005
Page 24
m ark et leader, followed by Econet Wireless Nigeria ( EWN) . Wit h t he appoint m ent in
April 2003 of Pent ascope t o m anage NI TEL, MTEL, a wholly- owned subsidiary of t he
Nat ional Carrier , r ose t o a dist ant t hird while GloMobile, t he m obile arm of t he
Second Nat ional Operat or, Globacom , was t o j oin t he fray lat er in t he y ear .
2003 began wit h t he inaugurat ion of MTN’s < KHOOREDKQ m icrowav e t ransm ission
backbone at Lokoj a in Kogi st at e. The proj ect was part of effort s by t he operat or s at
easing t he chronic congest ion in t he Nigerian phone landscape. All four nat ional GSM
operat ors hav e invest ed huge am ount s in t ransm ission, enabling access t o sev eral
part s of t he count r y, t her eby connect ing hundreds of com m unit ies and highways t o
t he phone net work .
:HVW$IULFDQ*606XEVFULEHUV
6XEVFULEHUV
1HZ5DQN 2OG5DQN
1
1
2
2
3
4
4
5
5
3
6
6
7
7
8
10
9
8
10
11
11
9
12
12
^`U]3V
&RXQWU\
Nigeria
Cote d’Ivoire
Cameroun
Ghana
Senegal
Benin
Burkina Faso
Mali
Togo
Sierra Leone
Guinea Rep.
Liberia
EMC, eShekels
2FW
8,076,544
1,492,420
1,330,900
1,243,560
989,030
362,880
352,630
350,440
314,380
151,000
121,040
68,000
2FW
2,430,200
1,133,120
712,350
986,000
650,690
261,530
199,550
188,000
119,700
191,810
78,670
40,800
*URZWK
69.9%
24.1%
46.5%
20.7%
34.2%
27.9%
43.4%
46.4%
61.9%
-27.0%
35.0%
40.0%
52.9%
RI
7RWDO
54.4%
10.0%
9.0%
8.4%
6.7%
2.4%
2.4%
2.4%
2.1%
1.0%
0.8%
0.5%
¬®¯ °?±²³+´µ°¶·¸%¹º4» ¼+½¾%¿'ÀÁ¿Â®¶3¼º4» ®°ºv¶
I t was not , how ev er, plain sailing for t he service provider s as m illions of phonest arv ed cust om ers cont inued t o agit at e for connect ion. One official said at a public
forum t hat one of it s base st at ions was j am m ed wit hin 20 m inut es aft er it went live –
a t est im ony t o t he huge dem and in t he m ark et . I t was obvious t hat t he operat or s
had grossly under est im at ed t he size of t he m ar ket .
One m aj or casualt y of t he surging dem and was qualit y. Consum er s com plained of
poor qualit y of t he net w ork s, as t he providers bat t led t o r oll out net wor ks acr oss t he
count ry . Phone users w er e part icularly angry, because of t he belief t hat t ariffs were
very high. I nit ially, t he highest rat e was N50 ( US$0.36) per m inut e. To lessen t he
cost burden, consum er groups called for t he int roduct ion of per second billing. When
t he service providers w ould not budge, t he regulat or order ed t he m obile com panies
t o suspend t he sale of furt her SI M packs.
NCC © 2005
Page 25
I n July 2003, Vm obile and MTN w er e allowed t o r ecom m ence t he sale of pr epaid
lines, aft er nearly five m ont hs of suspension due t o inadequat e capacit y t o carr y
addit ional subscript ions. The t wo operat ors had been involved in m assive sales
prom ot ion prior t o t he suspension. The capacit y t o car ry m or e subscriber s had been
exhaust ed, result ing in t he need t o build m ore capacit y.
Befor e t he r esum pt ion of sales, t he unavailabilit y of new lines fr om t he operat ors
m eant t hat SI M pack s wer e being sold for as m uch as N26,000 ( US$187.2) . Vendors
who had st ockpiled t he lines were able t o sell t hem at a prem ium and st art ed m aking
rapid gains on t he back s of anxious subscriber s.
(YROXWLRQRIWKH0RELOH,QGXVWU\
The dynam ism of t he m obile operat ors has r esult ed in m obile out pacing fixed- lines,
while t echnological advances hav e m ade t he inst allat ion of m obile net work s m uch
fast er t han fixed- line roll out .
I n Nigeria, as in ot her dev eloping m ark et s, m obile com m unicat ions is em erging as
t he de fact o t elecom m unicat ions infrast ruct ure. Mobile operat ors in Nigeria are under
int ense pressur e fr om Governm ent and increasingly knowledgeable consum er s t o
offer affordable services and ext end t elephony deeper int o t he count r y and also t o
lower- incom e groups.
The pr evious m odel pract ised by NI TEL and t he early PTO ent rant s, of offering
lim it ed coverage at high cost s t o only t he wealt hiest business and Governm ent
com m unit ies has given way. Now sharp dr ops in t he cost of net w or k infrast ruct ure,
handset s, plus t he im pact of com pet it ion, is m aking t oday’s operat or s offer
affordable services t o large port ions of t he populat ion.
The dynam ics of t he Nigerian m obile m ark et cont inues t o change, som et im es quit e
rapidly. For inst ances:
•
Mark et has grown int o a com pet it ive four player m obile sect or as shown in
t he chart below:
Ã» ÄÂº°?±Å'³À.Æ®» ¯ °À.º4Ç0°0·"¿Èº°H¹ºÆÉÊ²ÅÅ"±[·4ÆF²ÅÅË
NCC © 2005
Page 26
•
Addressable m ar ket is now at least 25 m illion subscribers
•
St rong growt h prospect s curr ent ly wit nessed and foreseen int o t he near
fut ure – 8.5% penet rat ion in 2004.
•
Predom inant ly prepaid m ark et , rat io of pr epaid t o post - paid is 97: 3 15 .
•
High em ploym ent capabilit ies, at least 500,000 ret ail out let s ar e act ive selling
m obile product s and ser vices 16 .
•
Prepaid SI M prices dropped t o N1 ( USD$0.01) in Oct ober 2004.
•
No price increase ( airt im e and inst allat ion) since indust ry incept ion.
•
Lim it ed dat a services now available over m obile devices and not ebook
( PCMCI A) cards
•
I ncreased
t ransm ission
qualit y
im provem ent s by t he operat or s
•
I nit ial coverage and m ark et ing focus on high m arginal ARPU areas, t hough
t he m obile com panies are now pushing furt her int o t he hint erlands.
and
progressive
net work
capacit y
)L[HG7HOHSKRQ\
Since t he lat e 1990s, PTOs have been pr oviding lim it ed services in t he nat ion’s
biggest urban cent res, nam ely Lagos, Abuj a, Port Har court and Kano. During t he
period under r eview, a num ber of fixed wireless net work s began m igrat ing t o t he
m or e advanced CDMA2001X t echnology, wit h not iceable im provem ent in service
qualit y, and a new abilit y t o provide dat a and I nt ernet ser vices over t elephone lines.
Leading oper at ors are Mult i- Links, I nt ercellular, St arcom m s, Mobit el, VGC, Em is,
MTS First Wireless, and Relt el.
While t he m obile m ark et has been boom ing, NI TEL’s fixed line m ark et has been
st agnant because of lack of capacit y and bureaucrat ic bot t leneck s. An at t em pt t o
privat ise it in 2002 suffer ed a set back when t he pr eferr ed bidder failed t o com e up
wit h t he price of $1.3 billion. Following t his, t he Bureau of Public Ent erprises ( BPE)
appoint ed Pent ascope in April 2003 as m anagem ent cont ract or s in a USD$40m
perform ance- based cont ract .
Curr ent ly, t he Bureau of Public Ent erprises ( BPE) has pre- qualified six com panies in a
fr esh at t em pt at selling a 51% st ak e in t he public ut ilit y. The sale is t o be followed
up wit h an I nit ial Public Offering ( I PO) of up t o 20 percent equit y t o t he Nigerian
public, t hough no firm dat e has been set for t he conclusion of bot h act ivit ies.
NI TEL’s advant age is it s presence all over t he count ry, but it is ham st rung by official
int erfer ence, a poor cust om er ser vice cult ure, and a heav y debt burden. The
ant icipat ed ent rance of Globacom int o t he fixed t elephony m ar ket is also expect ed t o
change t he face of t he sect or.
During t he period 2003 – 4, Nigeria’s Fixed Wireless operat ors began t o offer a
com plet e bouquet of t elecom m unicat ion services for bot h business and individual
user s. St arcom m s, I nt er cellular, Mult ilinks, Relt el and Cellcom now serv e t heir
15
16
Projected from NCC Trends 2002 report.
Source: eShekels. Based on recent market reviews.
NCC © 2005
Page 27
subscriber s wit h I nt er net access, high speed dat a, fax and v oice via a single
t erm inal, wit hout t he need t o lay wires, achieving cost - effect iveness and rapid roll
out in t he process. Nearly all t he privat e oper at ors also offer lim it ed m obilit y, t hus
providing a convergent t elecom plat form . CDMA t echnology, which const it ut es t he
net work plat form of t he m aj orit y of t he PTOs, is also t he foundat ion of t hird
generat ion ( 3G) t elecom services, which is leapfrogging Nigeria int o t he new
econom y .
Nigeria’s appet it e for high t echnology has been good. As an exam ple, last year,
Nort el Net works inst alled Africa's first CDMA2000 1X wireless net w ork for Mult iLinks, Nigeria’s pioneer privat e t elephone serv ice provider. The net w ork posit ioned
Mult i- Links t o r each m or e t han 100,000 cust om ers in t he cit y of Lagos wit h bot h
voice and dat a ser vices. The Mult i- Links CDMA2000 deploym ent uses t he 800m egahert z ( MHZ) band of radio spect rum for t r ansm ission.
Bot h Globacom ( t he Second Nat ional Carrier) and MTS First Wireless ( a nat ional long
dist ance oper at or) , in part icular, are also dem onst rat ing ent husiasm for new
invest m ent in order t o com pet e direct ly wit h NI TEL at t he local access level, and in
som e areas ev en in backhaul and int er- cit y t ransm ission links.
,QWHUQHW'DWD6HUYLFHV
Gr owt h in I nt ernet access looks set t o cont inue as prices for bandwidt h and
equipm ent cont inue t o fall nat ionwide. Ov er 100 service provider s com pet e t o
provide ret ail I nt ernet ser vices, cyber café access, E1 t runk s, and DSL/ leased lines t o
consum er s, while broadband I nt ernet access is beginning t o m ake a sm all, but
increasingly not iceable, m ark et inroad.
A num ber of service provider s now offer m ont hly, rat her t han annual cont ract s,
which will appeal t o pot ent ial cust om er s who ar e war y of being t ied int o long
cont ract s for a service which t hey are not fam iliar wit h or for which t here ar e no
guarant ees of service qualit y. I n addit ion, service pr oviders have r ecent ly int roduced
new product s t arget ed at sm aller businesses and resident ial consum er s. Exam ples of
com panies in t his m ould include MWEB, Junisat , Linkser ve and Koochi.
The I nt ernet is increasingly being used by large and m edium sized businesses,
part icularly in t he urban cent res. Usage in federal and st at e schools and universit ies
is also growing rapidly. I n t he last 12 m ont hs t her e have been init iat ives announced
by organisat ions such as Afri- hub, Schoolnet Nigeria, Nat ional Universit ies
Com m ission ( NUC) , Socket w orks, HP, and Broadband Technologies, am ong ot her s,
t o connect m any of t he count ry ’s colleges t o t he I nt ernet .
Furt herm or e, Nigerian consum er s now hav e a wide variet y of t ariffs for I nt ernet
access, including pay- as- you- go and unm et er ed packages. Alt oget her, due t o t he
generally high level of com pet it ion am ong oper at ors and bandwidt h suppliers, prices
and t ariffs for I nt ernet Services hav e fallen dram at ically in recent t im es. I nt ernet
access t im e has dr opped significant ly by over 80% since 1999 wit h cur rent cost s
averagely N100 ( USD$0.70) per hour at cyber cafés. Curr ent prices for access t im e
is com pet it ive int ernat ionally, t hough t her e is a large variance bet ween cit ies, wit h
prices as high as N500 ( USD$3.60) charged in t owns wher e com pet it ion is weak, and
as low as N40 ( USD$0.30) wher e com pet it ion is excessive.
NCC © 2005
Page 28
The av erage indust ry cost of backbone bandw idt h t o I SPs in Nigeria from sat ellit e
operat ors has also fallen but rem ains high at about USD$600 per m ont h for 64 Kbps.
These figures st and in very sharp cont rast t o curr ent m ont hly prices for 1Mbps
bandwidt h in t he US ( $50) , Eur ope ( $60) , and Asia ( $120) 17 .
Due t o lim it ed dat a- capable t elephone lines, t he gr owt h of dialup as an I nt ernet
access opt ion for sm all business and individuals has been st unt ed. This has r esult ed
in a large num ber of cyber cafes or public access point s m ushroom ing all over t he
federat ion. The Associat ion of Telecent r es and Cyber Café Owner s est im at es t here
are at least 5,000 cyber cafés in Nigeria, wit h over 80 per cent locat ed in Lagos. One
charact erist ic of t hese cafés is t heir poor cust om er ser vice cult ure, not t o m ent ion
t he low bandwidt h em ployed, which m akes I nt ernet access v ery slow. They also
suffer from t he appalling power problem and cost ly equipm ent required t o st ay in
business. But for t hose who can overcom e t he financial const raint s, t here are rich
pickings t o be had.
Recent ly, a num ber of t he fixed wireless oper at or s ( com m only referr ed t o locally as
PTOs) have launched I nt ernet access pr oduct s ov er CDMA spread- spect rum wireless
links, predom inant ly in t he I SM 2.4 GHz band. These operat ors include Mult ilinks,
I nt ercellular, Cellcom , St art ech, Relt el, and St arcom m s. 21 st Cent ury Technologies,
VGC Com m unicat ions, Mobit el, I TN and GTE also offer I nt ernet Services over fibre
opt ic landlines.
Wit h t he recent announcem ent of dat a services by PTOs, I SPs in t urn are beginning
t o face increasing com pet it ion from large and fairly liquid t elecom m unicat ions service
provider s. Addit ional com pet it ion is also beginning t o em erge fr om cable TV
com panies, who are now bundling I nt ernet access wit h t heir TV product s. Exam ples
of t hese new com panies include MWEB, TrendTV, and Trum pet I nt ernet Television.
Fibre opt ic is also gradually becom ing a fairly reliable alt ernat ive t o VSAT equipm ent ,
part icularly on t he I slands of Lagos. Since deregulat ion of t he t elecom m unicat ions
m ark et , t here has been a rapid increase in t he num ber of operat ors deploying fibre
opt ic cable solut ions t o offer high speed I nt ernet access, I SDN, and E1 links.
The lack of r eliable t err est rial infrast ruct ure and t he desire for high qualit y dat a
com m unicat ions has creat ed a m ark et ripe for local and int ernat ional sat ellit e
solut ion provider s. Nigeria is one of t he m ost pr om ising m arket s for broadband
sat ellit e com m unicat ions. 2003/ 04 saw cont inuing growt h in bot h t he narr owband
and broadband I nt ernet access m ark et s.
A num ber of new com panies, including Shiron, Koochi, Accelon, and QKon increased
t heir m ark et ing foot print during t he period under review by posit ioning t o provide
broadband I P ov er sat ellit e solut ions, in an at t em pt t o respond t o increasing
consum er dem and. I nt ernet businesses are wit nessing renew ed gr owt h wit h new
players offering low- priced equipm ent for connect ing t o t he I nt ernet .
Wholesale I nt ernet ser vices ar e experiencing growt h wit h an increasing num ber of
int ernat ional sat ellit e com panies opening offices wit hin t he count ry. Com panies
providing wireless solut ions, dat a t ransm ission and VSAT equipm ent and ser vices ar e
also springing up daily. To be profit able in t he ent erprise, how ev er , requires having–
am ong ot her t hings - cor rect inform at ion. Most of t hose who hav e v ent ured int o t his
17
Source: Telegeography 2004
NCC © 2005
Page 29
sect or are, unfort unat ely, wit hout t he necessary t echnical skill and m anagem ent
abilit y. This is why t he m ort alit y rat e of st art - ups in t he sect or appears t oo high.
Ot her posit ive dev elopm ent s during t he period include t he launch of I nt ernet
Exchange Point s ( I XPs) in I badan and Lagos by t he I nt ernet Ser vice Provider
Associat ion ( I SPAN) working in part nership wit h NI TEL; and t he r esolut ion of t he
disput es ov er t he owner ship of Nigeria’s Top Level Dom ain .ng. Bot h t he Nigeria
Com put er Societ y ( NCS) and t he Nigeria I nt ernet Gr oup ( NI G) wer e claim ing
aut horit y over Nigeria’s Top Lev el Dom ain .ng unt il t he gov ernm ent m andat ed t he
Nigeria I nform at ion Technology Developm ent Agency t o t ake over cont r ol of t he
dom ain pending t he set up of a non- profit organisat ion t o adm inist er t he ccTLD.
2WKHU9DOXH$GGHG6HUYLFHV
The v alue added services m arket in Nigeria is in it s em ergent phase. This segm ent of
t he m ark et has not flourished as well as ot her t elecom sect or s, par t ly due t o t he
novelt y of ser vices/ offer ings, as well as t he low proport ion of com pet ing firm s.
The GSM operat or s ar e t he m ain providers of ot her value added services in Nigeria,
wit h t he m aj or player s leading t he sect or in t er m s of quant um of available offerings.
( See t able below) .
071
Voicemail
902%,/(
Ringtones
- monophonic
- Polyphonic
Logos
WAP Services
MTN Flash
Backup Services
Customer services
Enhanced
voicemail
Short messaging
service (SMS)
Fax mail
International
Roaming
Fleet management
Information
Services
Games/Downloads
Conferencing
Short messaging
service (SMS)
Wallpapers/Screen
savers
Games/Downloads
Information Services
*/2%$&20
Multimedia Messaging
Service (MMS)
Mobile Internet
(GPRS)
Ringtones
07(/
Short
messaging
service (SMS)
Voicemail
Mobile banking
Logos/wall paper
Txt2email/email2Txt
Entertainment
Services
Backup Services
Messaging
Portal Services (My
mobile)
Voicemail
International
Roaming
Conferencing
International Roaming
Voicemail services
Fleet management
Information Services
Games/Downloads
Conferencing
¬®¯ °?±Ì'³+Í:¯ Â°H¸IÎÎ°Î¿°ºRÏ» ¼7°¶HÐºÆÏ» Î°Î®0Ñ¾%¿'ÀÓÒÆÉÔ½» °¶
NCC © 2005
Page 30
How ev er, a num ber of privat e firm s also com pet e wit hin t he sect or. Privat e VAS
com panies 18 gener at e m obile cont ent by aligning wit h cont ent owners who are
t ypically m usicians, art ist s, or m edia firm s t o deliver int eract ive value added ser vices
t o m obile phone owner s via t heir GSM net wor ks. Rev enues com e fr om subscript ions
or pr em ium charges on each SMS received. St andard prem ium SMS rat e is N30,
t hough som e com panies charge up t o N100 for r ing t one downloads, for inst ance.
The m obile operat or shares r ev enues wit h t he privat e VAS com panies in t he
following rat ios:

50: 50 ( MTN) ,

60: 40 ( Vm obile) , and

50: 50 ( Globacom ) .
MTel is st ill developing it s WASP m odel at t he t im e of going t o press.
Privat e value added com panies in Nigeria offer :

%XON 606 SURGXFWV used by m ark et ers t o send short m essages t o large
dat abases of m obile subscriber s
/RJRV5LQJWRQHGRZQORDGV
&KDWURRPV9RWHDSSOLFDWLRQV, used by TV pr oducers t o enable int er act ivit y
am ong viewers
,QIRUPDWLRQ'LUHFWRU\6HUYLFHV, wher e m obile subscribers can access t he
lat est inform at ion on any m aj or subj ect cat egory e.g. t rav el, new s, sport s,
weat her, et c
The m aj or privat e VAS com panies are MTech, TaviaTxt , and A3&O. Ot her players ar e
SaveMyCont act s, Text nigeria, Ent egrat ion Solut ions, Cellulant , 3G Realit y Cent re, t o
nam e a few. Value Added Services ( VAS) in Nigeria is a growt h sect or for fresh
incom e st r eam s wit h a seem ingly st rong fut ur e ahead.
96$71HWZRUN6HUYLFHV/$1:$16HUYLFHV
VSAT t erm inals are now a prim ary t echnology for I nt ernet access by corporat es and
a growing num ber of I SPs and cyber cafés. Reasons for t he gr owing adopt ion of
VSAT solut ions include t he decision by t he Nigerian Com m unicat ions Com m ission
t hat I SPs ev acuat e t he I SM band by Decem ber 2003. ( The I SM frequency band is
t ypically used for wireless radio t ransm issions) ; and t he increasing affordabilit y of
VSAT equipm ent .
Wit h t he fall in acquisit ion prices for VSAT equipm ent accom panying t he pr oliferat ion
of Ku- band 19 t echnologies, and t he r egulat ion of t he use of t he I SM wireless
fr equency spect rum 20 by t he Nigerian Com m unicat ions Com m ission, t here is a boom
in t he sales and inst allat ion of differ ent t ypes of VSAT t erm inals nat ionwide. I t is now
18
Wireless Application Services Providers (WASP) is increasingly being adopted as the nomenclature for
this type of telecoms companies.
19
There are two common frequency bands for VSAT equipment, namely C- and Ku-bands.
20
A license-free frequency spectrum used globally for Industrial, Scientific and Medical communications.
The ISM frequency band is typically used for wireless radio transmissions by ISPs in Nigeria.
NCC © 2005
Page 31
possible t o obt ain sat ellit e access t o t he I nt er net for less t han USD$2,500, a price
drop of m ore t han 600% from 1999.
VSAT com panies charact erist ically engage only eit her or bot h of t he t ypes of user
segm ent s locally available, nam ely: Ret ail and Corporat e Mark et . Maj orit y of VSAT
licensees r et ail VSAT equipm ent t o users nat ionwide, and usually represent sat ellit e
com panies and m anufact urers based ov er seas. They oft en do not ow n net work s or
hubs. Exam ples include Sign- on- Africa, Junisat , et c. A num ber also at t em pt t o offer
services t o bot h m ark et segm ent s by m oving up t he value chain from being regular
I SPs t o VSAT com panies e.g. Linkserv e. I ndeed, it is becom ing increasingly difficult
t o dist inguish bet ween I SPs and VSAT com panies.
Corporat e sect or VSAT com panies, how ev er , t end t o build and own Virt ual Privat e
Net w ork s, which t hey lease t o or m anage for blue chip corporat es. Licensees in t his
m ould include: Unit ed Telesys, GS Telecom s, Virgin Technologies, Accelon,
Schlum berger, and Br oadband Technologies.
Besides VSAT, t her e ar e ot her sat ellit e access t erm inals available wit hin t he local
m ark et . Pr om inent am ong t hese are port able briefcase- size t erm inals being
m ark et ed by t he sat ellit e com pany I NMARSAT.
Com pet it ion in VSAT ser vice provisioning is fier ce and v er y st iff. About t wo dozen
Nigerian com panies are current ly engaging t he m arket in collaborat ion wit h various
int ernat ional part ners. The leading players in VSAT Net work Services include:

Direct - On PC

GS Telecom

Schlum berger/ Om nes

Virgin Technologies ( recent ly acquired by VGC Com m unicat ions)

Em perion

Accelon

Koochi

QKON

DCC

Linkserv e
The m ost visible int ernat ional part ner organisat ions include Panam sat , I P Planet ,
I nt elsat , Sk yvision, and Gilat , am ong ot hers.
,QIUDVWUXFWXUH
1LJHULD&RPPXQLFDWLRQV6DWHOOLWH
At t he end of 2004, Nigeria signed a cont ract wit h China Great Wall I ndust ry
Cooper at ion ( CGWI C) for t he design m anufact ure and launch of t he Nigerian
Com m unicat ion Sat elit e- 1 ( NI GCOMSAT- 1) . By t he launch of a nat ional
com m unicat ion sat ellit e, t he Nigerian governm ent plans t o provide an opport unit y for
t he count ry t o r eceive a sizeable port ion of capit al flow paid by African count ries for
NCC © 2005
Page 32
ÕÖR×ØÙÚHÛ Ø[Õ×Ü ×0Ý3Þß!ßàØÛ Ý3á3âÛ ÞØ0Ú.ãPáÖä+×3â Ú!Û Ø!å%Û æ×ÖÛ áhç0èè3é3ê ç0èè+ë
t heir int ernat ional t elephone t raffic. Ot her int ended benefit s include t he need t o
bridge t he digit al divide, and launch t he Nigerian econom y int o t he inform at ion age.
NI GCOMSAT- 1 plans t o have cov erage over Africa and Eur ope, and is expect ed t o be
launched in Decem ber 2006.
7KH6$76XEPDULQH&DEOH
NI TEL owns 7% of t he USD$80m SAT3 subm arine fibre opt ic but only com m er cially
act ivat ed public access t o t his cont inent al t elecom s link in May 2003. SAT3 connect s
sev eral African count ries t o each ot her and t erm inat es at Port ugal. NI TEL offers
VoI P and 64k TDM access t o SAT3 for pr e- paying corporat e cust om er s. Cur rent ly
NI TEL has sold about a quart er of SAT3 capacit y t o large oil com panies, I SPs and
ot her t elecom operat or s who are using it for wholesale I nt ernet and int ernat ional
voice t raffic.
3ULYDWLVDWLRQRIWKH,QFXPEHQW1DWLRQDO&DUULHU
NI TEL has been in t he t hroes of a privat isat ion program m e t hat has spanned over
five years since 1999. I n 2001, NI TEL em bark ed on an ext ensive invest m ent drive as
t he Governm ent sought a m aj or int ernat ional invest or t o buy a m aj or st ake in t he
public m onopoly. During t he fourt h quart er of 2001, t he Bureau of Public Ent erprises
( BPE) , t he gov ernm ent agency r esponsible for t he privat isat ion of st at e corporat ions
and asset s, t hen r equest ed for bids for a 40% st ake in NI TEL. The r em ainder of t he
equit y was t o be split bet ween t he Governm ent and m em bers of t he public on a rat io
of 40: 20.
This bid for t he 40% st ake in NI TEL, which held in Novem ber 2001, t hrew up
I nt ernat ional I nvest ors Lim it ed ( I LL) as t he wining bidder. How ev er , t he offer was
cancelled due t o t he inabilit y of I LL t o m eet t he deadline for paym ent of t he balance
bid am ount , as well as t he inabilit y of t he reserv e bidder, Telnet Nigeria Lim it ed, t o
t ake up t he offer for t he st ak e.
Following t he long and unsuccessful at t em pt s t o privat ise NI TEL, t he Gov ernm ent
com m it t ed it self t o a backup plan of sourcing ext ernal expert ise t o t urn ar ound t he
fort unes of t he com pany. This led t o t he appoint m ent , in March 2003, of Pent ascope
I nt ernat ional of Net herlands for a t hree- year per form ance- based m anagem ent
cont ract .
Prior t o t he operat ional handover t o t he new m anagers, and in order t o ensure a
level playing field wit h ot her operat ors in t he count r y, NI TEL was re- issued wit h
licences t o cover all areas of it s operat ions as a Nat ional Carrier, and t hus brought
m or e fully under t he regulat ory am bit of t he NCC.
Based on Gov ernm ent ’s assessm ent of t he progr ess m ade in t he count ry’s
t elecom m unicat ions landscape, relat ive t o t he perform ance of t he Cont ract Manager s
of NI TEL, and it s aspirat ions for t he com pany, t he Gov ernm ent of Nigeria announced
it s plan t o ensur e t hat NI TEL is privat ised befor e t he end of 2005.
NCC © 2005
Page 33
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5HFKDUJH&DUGV
The Nigerian Governm ent at a m eet ing wit h operat ing com panies in May 2004
announced t he ban of t he im port at ion of recharge cards int o t he count ry fr om 1st
January 2005.
The Nigerian Com m unicat ions Com m ission was t he Gov ernm ent agency t hat
im plem ent ed t he direct ive, and proceeded t o invit e expressions of int erest fr om
int erest ed com panies for t he m anufact ur e of Recharge Cards in Nigeria. A t ot al of
14 com panies wer e t her eaft er issued perm it s from a long list of 98 firm s t hat
responded t o advert s.
Ot her spin- offs of t he policy are t he cr eat ion of m or e j obs and conservat ion of
for eign exchange. I t m ay also check occasional scarcit y of cards experienced by t he
operat ors due t o im port logist ics challenges.
0DQXIDFWXUHRI7HOHFRPV(TXLSPHQWV
The liberalisat ion and growt h of t he t elecom m unicat ion indust ry in Nigeria has also
given rise t o an influx of m obile phone handset s int o t he Nigerian m ark et . Virt ually
ev ery t ype of t elephone handset can now be found in t he count ry, and ar e available
t o consum ers irrespect ive of t heir incom e brack et .
Mor e r ecent ly, one area in which t he Nigerian Governm ent ant icipat es furt her direct
invest m ent s is in t he local m anufact ure of t elecom s equipm ent such as t elephone
boxes and m obile handset s. I n Nov em ber 2004 for exam ple, Chinese vendor ZTE
announced plans t o est ablish a fact or y in Abuj a t o m anufact ure m obile handset s and
prepaid recharge cards.
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&RQVXPHU3URWHVW
A hit hert o unknown gr oup of consum er right s act ivist s em erged t hird quart er 2003,
first on t he I nt ernet t hrough em ails and lat er , t hrough t ext m essages ( or short
m essages ser vice, SMS) , calling for a boy cot t of GSM services. The operat or s, t hey
claim ed, had becom e eit her insensit ive t o or incapable of responding t o consum er
com plaint s. The issue got t he support of t he m edia, which gave it wide publicit y and
sharpened public awar eness.
On 19 Sept em ber 2003, t housands of subscr ibers swit ched off t heir handset s in
response t o calls by fledgling consum er gr oups. The prot est er s swit ched off t heir
handset s for one day t o bring t he operat or s’ at t ent ion t o what w er e considered high
t ariffs and poor service qualit y. I r onically, t he dat e and m ode of t he boycot t was
conv ey ed t hrough t ext m essages. One of t he operat ors unwit t ingly helped spread
t he word as it was offering 100 fr ee t ext m essages t o it s subscribers at t he t im e.
The ‘Sept em ber 19 boycot t ’ was a landm ark event and has provided im pet us for
som e change in consum er/ service pr ovider r elat ions. This, coupled wit h Globacom ’s
NCC © 2005
Page 34
pioneering product launch, is believed t o have led t o t he speedy im plem ent at ion of
per second billing plat form s by MTN, Vm obile and MTEL befor e t he end of 2003.
The call by t he Nat ional Associat ion of Telecom m unicat ions Subscriber s ( NATCOMS)
and ot her consum er right s organisat ions for a 19 Sept boycot t of GSM ser vices
nat ionwide, regist ered a huge success in t he Lagos m et ropolis, according t o
newspaper r eport s. Operat or s are said t o have lost up t o N1- billion in rev enue.
NATCOMS say s it will cont inue it s prot est s, including a repeat boycot t on 1 Oct ober
and a picket of MTN and Vm obile offices, unt il t elephone t ariffs ar e reduced and
services im prov ed.
&RQVXPHU(GXFDWLRQ&RPSODLQWV0DQDJHPHQW
Following t he Sept em ber 2003 GSM boycot t , t he indust ry regulat or NCC st epped in
t o cr eat e a forum in which st akeholders could int eract and r esolve t heir differ ences.
The NCC set up a m ont hly Consum er Parliam ent as a r esponse t o consum er
dem ands for bet t er qualit y of service ( QoS) . The first session was held in Sept em ber
2003. Held t owards t he end of ev er y m ont h, t he Parliam ent is recorded and
t ransm it t ed on Nigerian Television Aut horit y ( NTA) and African I nt ernat ional
Television ( AI T) , t elevision st at ions wit h nat ional coverage. The Parliam ent deals
wit h issues relat ing t o Qualit y of Service, Consum er Right s Prot ect ion, Environm ent al
I m pact Assessm ent , I nt er connect ion, Tariffs and Universal Service Provision. By t he
end of each session, resolut ions on issues raised ar e m ut ually agreed t o, and
regulat ory int erv ent ions r equired fr om t he oper at ors ar e r est at ed.
Since it s launch t he Parliam ent has put pressure on t he operat or s t o deliver
im proved ser vices and bet t er relat ions wit h consum er s. Many of t he fixed and m obile
operat ors at t end t he m ont hly event , which holds at t he Senat e cham ber s of t he old
Nat ional Assem bly, Tafawa Balewa Square, in Lagos. The Parliam ent has not ably
helped t o resolve crit ical issues such as negat ive billing, net wor k congest ion,
m igrat ion t o per second billing, net work expansion and ot hers.
Support ers of t he Consum er Parliam ent say t hat t he forum has helped t o increase
consum er right s awareness, and has also given operat or s an opport unit y t o explain
t hem selves t o t he public. On t he ot her hand, crit ics say it is j ust a t alk shop wit h
lit t le or no pow er of enfor cem ent . Nevert heless, it has cont inued t o com m and t he
at t ent ion of consum er s who cont inue t o use t he opport unit y as a m edium t o get
redress for t heir num er ous com plaint s against operat ors.
Success achiev ed t hrough t he Parliam ent has cont inued t o at t ract at t ent ion wit hin
and out side t he nat ion. At t he first anniversar y of t he Parliam ent in August 2004,
Honourable Yem i Arok odare, Chairm an House Com m it t ee on Com m unicat ions, House
of Represent at ives, pr aised t he t elecom parliam ent for resolving m any of t he
problem s affect ing t he indust ry. I t has becom e a t oast of t he I nt ernat ional
Telecom m unicat ions Union ( I TU) , t he specialised t elecom m unicat ions agency of t he
Unit ed Nat ions. Ot her m em ber nat ions of I TU are working t o t he m odel of NCC’s
consum er parliam ent t o solve crit ical problem s confront ing t heir t elecom m unicat ions
sect or .
To ensure t hat consum er com plaint s wer e also cont inually addressed, t he
Com m ission set up a Consum er Affairs Bur eau, equipped wit h a st andard Call Cent re
m anned by consum er help desk specialist , t o t r eat issues br ought t o t he not ice of t he
regulat or by t elecom s users. The obj ect ives of t he Bur eau ar e:
NCC © 2005
Page 35

To creat e a visible and cr edible Consum er Affairs Bur eau t hat would ser ve as
a One- St op Shop, which st akeholders can r ely upon for inform at ion on t he
t elecom m unicat ions indust ry in Nigeria.

To generat e an unm at ched awareness of consum er right s in Nigeria by
est ablishing
a
st rong
bureau
t hat
would
m onit or
and
cont r ol
t elecom m unicat ions operat or s in Nigeria in order t o pr ot ect consum ers fr om
unscrupulous pract ices in t he indust ry.

To innovat ively exploit all channels of com m unicat ion in offering educat ion t o
t he subscribers on a cont inuous basis.
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/LPLWHG
The Econet saga was one of t he m aj or indust ry issues in 2003/ 4. Tr ouble st art ed
around July 2003, over a shareholder disagreem ent ov er t he apport ioning of a
cont r olling st ake in t he firm . This led t o t he suspension in Sept em ber 2003 of t he
t hen CEO Zachar y Wazara, and t he ult im at e t erm inat ion of Econet Wireless
I nt ernat ional ( EWI ) as t he t echnical m anagers of t he v ent ure.
Vodacom , Africa’s largest m obile operat or at t he t im e, was t her eaft er offer ed an
init ial 33 per cent st ake for US$150m , wit h opt ions t o invest furt her US$400m .
Unfort unat ely t he deal fell t hrough. I n May 2004, Vodacom suddenly announced it
was pulling out of t he ent ire arrangem ent .
From “ Econet Wireless Nigeria” t o “ Vodacom ” t o “ Vm obile” , Nigeria’s second largest
GSM operat or w ent t hr ough t hree phases of rebranding in less t han six weeks, one of
t he fast est in t he hist or y of corporat e Nigeria.
Vm obile has however been r e- st r at egised and t he business has been t urned around
wit h a new brand, new product s and new corporat e zest . The com pany has also
announced plans t o roll out a furt her 800 base st at ions fr om January 2005, and
int ends t o build a new t ransm ission backbone connect ing t he nort h and sout h of
Nigeria.
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I n 2004, Pr esident Olusegun Obasanj o com m issioned NCC’s Digit al Bridge I nst it ut e
( DBI ) t o t rain world- class t elecom pr ofessionals. NCC had set up t he I nst it ut e t o t rain
professionals t hat handle various posit ions in t he I CT sect or. The I nst it ut e is open t o
all sect or s of t he econom y t hat desire t o develop com pet encies and gain insight int o
how t he I CT sect or is run.
DBI pr ovides world class hands- on t raining in I CT t hr ough int ernat ional and dom est ic
expert s at com parat ively lower prices, and has developed ov er 140 indust ry specific
cour ses offered in t he I nst it ut e’s exquisit e Abuj a locat ion, equipped wit h
cont em porary I CT and m ult i- m edia t echnology facilit ies. DBI ’s cour ses include t hose
in:

Telecom m unicat ions t echnology

Telecom m unicat ions m anagem ent

Telecom m unicat ions policy, regulat ion and law
The I nst it ut e, in it s first year , has t rained about 500 indust ry pract it ioners from
virt ually every act ive t elecom s operat ion, as t he figure below show s:
ì7íîíì«ïð:ñ+òóôõ ö3õ ñ+òô4õ ï÷8òôøùõJñ3íó.öìõ í3÷ô
12%
8%
5%
NCC ABUJA
MTN
4%
3%
15%
3%
INTERCELLULAR &
NNPC
M-TEL
ODUA TELECOM
7%
2%
1%
18%
NITEL
1%
SURBURBAN TELECOM
TOPCOM (NIG) LTD &
OTHERS
STARTECH
CONNECTIONS
CITY EXPRESS BANK &
OTHERS
NIGERIA LNG LTD &
OTHERS
CELLCOM & OTHERS
28%
Ã» ÄÂº°?±±³0ú7½ÎÂ¶·JºRÑFÐºR·J» ¼3» Ô·J» Æ½·Iûüú
Ã» º¶7·«±²À.Æ½·È¶ýoþ
The t elecom s indust ry has grown t o becom e one of t he largest cr eat ors of fr esh
em ploym ent wit hin Nigeria. The indust ry curr ent ly direct ly em ploys about 5,500
professionals, and is responsible for anot her 450,000 j obs indirect ly. I ndirect
em ploym ent wit hin t he sect or includes t hose of t he ubiquit ous “um brella people” –
airt im e resellers found in m ost st reet corners around t he count ry , t hird part y sit e
engineers, roadside r echarge card hawk er s, handset dist ribut ors, securit y per sonnel,
et c.
21
Source: Digital Bridge Institute
NCC © 2005
Page 37
7RWDO(PSOR\PHQW
7HOHFRPV6HFWRU
'LUHFW-REV
ÿ
,QGLUHFW-REV 1,400
22
100,000
23
5,500
250,000
450,000
3,500
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5HJXODWLRQ
7KH7HOHFRPPXQLFDWLRQV$FW
A new Telecom m unicat ions Act was signed int o law in Oct ober 2003 by t he Nat ional
Assem bly and wit h it , t he regulat or has been arm ed t o do m or e, wit h addit ional bit e.
From t he point of view of t enur e and aut horit y, t he Nigerian Com m unicat ions
Com m ission ( NCC) is now m or e em pow er ed. The House of Repr esent at ives, who will
include t he views of t he general public aft er a public debat e has been held, are
reviewing t he Act present ly.
The NCC has also announced a num ber of st rat egic plans including a St rat egic
Managem ent Plan for 2003- 2007, t he Wire Nigeria ( WiN) Proj ect , and t he Rural
Telecom m unicat ions Developm ent Fund ( see below) . The r egulat or has also wor ked
t owards and m ade specific pronouncem ent s on reduced int erconnect ion rat es. I t has
ensur ed t hat PTOs r educed int ernat ional call charge r at es and also est ablished a
Consum er Parliam ent .
5HJXODWRU\,QWHUYHQWLRQV
NCC increased it s r egulat ory oversight of t he indust ry during 2003/ 4 in order t o
prev ent t he em ergence of privat e m onopolies or cart els. Regulat ory int ervent ions
also cam e about t o pr ev ent hapless consum ers from inefficient t elecom net works and
poor cust om er services; issues t hat w er e pronounced during t he period.
I nt erconnect ivit y was one ar ea t hat pit ched NCC against t he dom inant GSM
net works, result ing in MTN and Vm obile going t o court in an at t em pt t o void t he new
int erconnect rat es ordered by t he NCC, effect ive fr om March 2004. How ev er, t he
court ruled in favour of NCC’s declarat ions.
Source: page 64, 7UHQGVLQ7HOHFRPPXQLFDWLRQVLQ1LJHULD , NCC
Source: Telecommunications in National Development, Engr. Ernest Ndukwe, Sept 2003
24
Estimates, from various sources
25
Source: eShekels
22
23
NCC © 2005
Page 38
The NCC had m ade declarat ions on int erconnect rat es which shows a r educt ion of an
average of 45% from = N= 18 t o = N= 11 for fixed- t o- m obile, and = N= 5.52 from
= N= 12 for m obile- t o- fixed. See t able below.
,17(5&211(&7,215$7(6
Fixed to Mobile
18
Mobile to Fixed
12
3HUFHQWDJHV
All prices in naira
18
12
11.52
5.52
'URS
-36%
-54%
¬®¯ °?±'³ú7½·°ºv¼+Æ½½°¼·» Æ½
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Ot her specific regulat or y int ervent ions m ade in t he past t w o y ears include:
1. The ordering of MTN t o refund Per Second Billing crossover charges of N100
t o pr epaid subscriber s t hat m igrat ed fr om t he Per Minut e Billing plat for m .
2. The closur e of 6 firm s on account of r egulat ory and equipm ent t ype approval
breaches.
3. The inj unct ion t o m obile operat ors in part icular t o addr ess t he issues of:
a. The High rat e of call at t em pt s
b. High drop–call rat es
c.
Call int erfer ence and loss of audio
d. Non delivery of SMS
e. Mult iple billing for SMS
f.
Wr ong feedback for SMS
g. Ot her call and billing problem s
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I n Februar y 2003, t he Nigeria Com m unicat ions Com m ission ( NCC) ext ended t he
deadline it gave t o I nt ernet service pr ovider s ( I SPs) t o vacat e t he indust rial,
scient ific and m edical ( I SM) bands, which had st ood at 31 Decem ber 2003. I SPs
have been using t hese bands t o operat e com m er cial service, wher eas t he
I nt ernat ional Telecom m unicat ions Union ( I TU) has set t hem aside for r esearch
purposes and non- com m er cial applicat ions.
Nigerian I SPs hav e also been grappling wit h poor ser vice caused by lat ency. The
operat ors use t he I SM band t o relay sat ellit e I nt ernet ser vice t o various com panies
and cyber cafés across t he count ry. Most of t he links have been const rained by
heavy t raffic t hereby causing lat ency. The ext ension of t he deadline was m eant t o
give t he I SPs am ple opport unit ies t o m igrat e t heir net work s t o t he 3.5Ghz band.
NCC © 2005
Page 39
Wireless fidelit y ( Wi- Fi) hot spot s can be found in increasing num bers locally. Based
on t he 802.11b st andard, Wi- Fi hot spot s allow any one wit h a wireless- enabled
per sonal digit al assist ant ( PDA) or lapt op t o sur f t he I nt ernet and send e- m ail at high
speed, wit hout having t o physically plug int o a net work. I n response t o pressur e for
t he legit im at e offering of t his rapidly deployable broadband t echnology, NCC set up a
Consult at ive Group m ade up of high profile indust ry ex ecut ives t o suggest a Wi- Fi
Fram ew ork for Nigeria. The Gr oup not ed t hat t here are cur rent ly t wo m aj or
applicat ions, one for privat e and t he ot her for public usage. Wi- Fi is already in
legit im at e usage for privat e corporat e Local Ar ea Net w or ks ( LANs) . Wit h regard t o
t he use of Wi- Fi for public usage or com m ercial hot spot s t o induce client s t o use
ot her services, such as in coffee shops or in airport s, NCC is set t o publish it s
int erpr et at ion of Wi- Fi provisioning.
Wi- Fi hot spot s ar e being built t hroughout t he count ry at select ed prem ium locat ions
such as hot els, airpor t s, t heat r es, and cam pus set t ings. Current ly t here are a
num ber of operat ors offering services, including At m ospace, Swift Net work s, and
Linkserv e am ong ot her s.
1HZ7HOHFRPV/LFHQVHV
I n t he years before t he der egulat ion of t he Nigerian t elecom m unicat ions sect or about
a decade ago, it was com m on for cust om er s t o wait for y ear s for a t elephone line.
Lines were scar ce, expensive and difficult t o com e by .
Wit h deregulat ion in t he 1990s, lim it ed m obile and fixed wireless ser vices launched
by a num ber of privat e t elephone operat or s ( PTOs) offer ed som e relief t o t he
m ark et . By y ear- end 2004, a t ot al of 523 new t elecom s licenses had been issued by
t he Nigerian Com m unicat ions Com m ission since 2001.
1HZ7HOHFRPV/LFHQVHV,VVXHG National Carrier
Mobile Telephony
Fixed Telephony
Local Exchange Carrier
Fixed Wireless Access (FWA)
VSAT(Domestic services only)
ISPs
Prepaid Card Calling
7RWDO
0
4
1
0
0
14
104
35
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61
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0
0
0
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0
0
24
20
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26
Note that these are ACTUAL LICENSES ALREADY ISSUED. There have been a number of offers of
licenses for these undertakings, but which have not translated into ACTUAL LICENSES for reasons such
as failure to pay required fees. Also note that LOCAL EXCHANGE CARRIERS are simply fixed voice
telephone companies, but their scope of operations is restricted to specific and defined local areas.
NCC © 2005
Page 40
Curr ent ly, t here ar e about 30 act ive fixed and m obile operat ors and at least 80
I nt ernet Service Pr oviders ( I SPs) and VSAT com panies across t he feder at ion as t able
15 below shows.
6(59,&(
&$7(*25<
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Mobile (GSM)
Telephony
Fixed Telephony
1
1
3
3
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9
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16
17
20**
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VSAT Networks
N/A
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18
30
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35
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National Carriers
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I n t he t hird quart er of 2004, t he Nigerian Gov ernm ent announced det ails of an
am bit ious Nat ional Rural Telephony Program m e ( NRTP) which proposes t o connect
500,000 new lines in 343 local governm ent ar eas wit hin t welve m ont hs, t hrough an
invest m ent of N28 billion ( USD200 m illion) provided as a concessionary loan from
t he Chinese governm ent , and a m at ching grant of N2.8 billion from t he Federal
Governm ent . The t hree cont ract ors t o t he pr oj ect ar e:
1. Rural Radio Syst em s ( RRS) , which will provide services t o 125 local
governm ent ar eas ( LGAs) ,
2. Alcat el Shanghai Bell ( ASB) covering 108 local governm ent s, and
3. ZTE which will cover 110 LGAs.
The pr oj ect is already off t o a good st art , as equipm ent wort h USD$23m ordered by
Alcat el Shanghai Bell ( ASB) for NRTP arrived in t he Lagos port from China in
Februar y 2005. The equipm ent included swit ching syst em s, t ransm ission syst em s
and cables r eady for inst allat ion.
Nev ert heless, t he oper at ors st ill have t o do a lot m or e in t erm s of deploying
infrast ruct ure int o rural areas. One of t he handicaps facing Nigerian t elecom
NCC © 2005
Page 41
operat ors is a scarcit y of funding. The huge am ount of funds needed t o finance t he
roll out of t elecom infrast ruct ur e is barely available wit hin t he Nigeria banks t hat are
curr ent ly grappling wit h m erger and acquisit ion issues in order t o m eet t he deadline
of Cent ral Bank of Nigeria ( CBN) on capit alizat ion by Decem ber 2005. I n August
2004, Com m unicat ions Minist er Chief Cornelius Adebay o launched a r ural t elephony
proj ect in t wo local governm ent areas of Abuj a. The Feder al Minist ry of
Com m unicat ions also said during 2002 t hat it was going t o engage Chinese
assist ance t o ext end t elephony t o rural areas.
Anot her of t he obst acles facing rural t elephony is t he apparent lack of viabilit y of t he
rural areas. Operat or s are reluct ant t o invest in places wher e t hey ar e uncert ain t hat
t hey would be able t o r ecoup t heir invest m ent s wit hin a specified t im efram e.
How ev er, rural t elephony is gaining m om ent um around t he globe as operat or s ar e
deploying CDMA ( Code Division Mult iple Access) and CDMA 2000 1x on wireless local
loop ( WLL) net w or ks in different frequency bands ( for inst ance 450 MHz, 800MHz
and 1900MHz) .
Broadband Technology Lim it ed has been in t he for efront of rural t elephony, as it has
deployed Very Sm all Apert ur e Ter m inals ( VSAT) wort h N270 m illion in Abuj a and
Lagos t o pr om ot e rural t elephony. The Nigerian Com m unicat ions Com m ission ( NCC)
licensed Broadband Technology Lim it ed t o provide rural t elephone service.
Broadband Tech has gone ahead t o part ner wit h STM Net w or k of California, USA t o
deliver t elecom m unicat ions t o r em ot e part s of t he count ry, t o bridge t he digit al
divide exist ing bet ween rural and urban areas and also provide t elem edicine t o t he
grassr oot s.
According t o NCC ruling, t he proj ect is based on prepaid plat form and would not be
governm ent funded. The only area t hat t he Governm ent would com e in is in area of
subsidizing solar energy which would be sourced fr om out side t he count ry t o power
t he swit ches. One of t he obst acles facing rural t elephony is t he lack of viabilit y of t he
rural areas. Operat ors are r eluct ant t o invest in places where t hey w ould not recoup
t heir invest m ent s wit hin a specified t im efram e. How ev er , ar ound t he globe rural
t elephone is gaining m om ent um as som e operat or s ar e deploying Code Division
Mult iple Access, CDMA 2000 1x on wireless local loop, WLL t echnology on different
fr equency for inst ance 450 MHz, 800MHz and 1900MHz.
:LUH1LJHULD:L13URMHFW
The NCC has gone ahead wit h it s Wire Nigeria ( WI N) proj ect . The WI N proj ect will
m ap out t he count ry wit h a view t o m ak ing it m or e at t ract ive for operat ing
com panies t o inst all t elecom m unicat ions infrast ruct ures. The concept of t he pr oj ect
is for t he NCC t o creat e awareness of t he need for t ransm ission infrast ruct ure all
around t he count ry. By t he t im e t he WI N consult ancy proj ect is com plet ed and aft er
reviewing t he progr ess of NI TEL and Globacom ’s r oll out , NCC will be able t o ident ify
m or e accurat ely t hose areas t hat ar e not being reached.
At least four operat ors are r olling out fibre opt ic t ransm ission infrast ruct ure. NI TEL is
invest ing heavily in t he roll out of fibre opt ic infrast ruct ur e; it already has fibre
running from Lagos t o Kano, int o t he east of t he count ry, and a subm arine fibre link
connect ing Lagos t o Port Harcourt . Globacom is also deploying a nat ional fibre
backbone. A num ber of ot her operat or s including VGC Com m unicat ions and 21 st
NCC © 2005
Page 42
Cent ury Technologies Lim it ed are also inst alling fibre t ransm ission infrast ruct ur e
around t he m aj or cit ies.
NCC © 2005
Page 43
3$57%23(5$72529(59,(:
This sect ion focuses on new players during t he period reviewed or/ and new m ark et
act ivit ies by exist ing firm s.
NCC © 2005
Page 44
7KH,QFXPEHQW1DWLRQDO&DUULHU 1,7(/
NI TEL is t he pr em ier t elecom m unicat ions com pany in Nigeria. I ncorpor at ed in 1985
aft er it was brok en out of t he Post al and Telegraph depart m ent ( P & T) , it was t he
sole nat ional phone provider unt il deregulat ion began in 1992. NI TEL cur rent ly
em ploys ov er 11,000 people but has less t han 380,000 27 lines work ing. NI TEL’s
problem is m ult i- facet ed: a winding privat isat ion process, bur eaucrat ic bot t lenecks,
poor st at e of nat ional infrast ruct ure, negligent cust om er service orient at ion, and,
lat ely, a weak financial posit ion. I n 2003, a Dut ch consult ancy Pent ascope was
awarded a $12 m illion t hree- y ear cont ract t o m anage t he com pany. The t eam
recent ly adm it t ed t hat it had not succeeded because of official m eddling, sabot age
by vest ed int er est s t hat profit fr om NI TEL’s inefficiency and fr aud. Curr ent ly t here
are 450,000 lines operat ional, plus 33,000 new CDMA lines t hat wer e recent ly
inst alled, soon t o becom e operat ional. Due t o t he delays in financing, NI TEL has not
been able t o im plem ent t he m aj or r ollout in Lagos ( 250,000 lines) as well as t he
CDMA roll- out ( 750,000 lines) . These invest m ent s r equire debt funding. I nst ead of
t hat , NI TEL has r ehabilit at ed 125,000 lines t he past year, using it s operat ional cash
flow. Pent ascope’s 22- m ont h old cont ract was voided at t he beginning of 2005.
7KH 1DWLRQDO&DUULHU *OREDFRP
+1
This wholly- owned Nigerian com pany was nam ed as t he second nat ional operat or
last year wit h a basket of licences, am ong which are fixed line phone, m obile,
int ernat ional gat eway ser vices. Glom obile, t he cellular unit , was launched in August
2003 and has since gr own it s subscribers t o 1.9 m illion. This m akes it t he second
largest m obile operat or behind MTN. The fixed unit is due t o launch by t he end of t he
year. Recent ly, it said it had launched it s gat eway services in t he UK and would be
opening ot her s in France, U.S. and Asia t o effect ively cover t he m aj or global cent res.
Since it launched it s services on August 29, 2003, Glom obile has been at t he
for efr ont of r evolut ionary changes in t he GSM sect or in Nigeria, offering bot h Pr epaid
and Cont ract services along wit h a range of Value Added Services.
Glom obile, in one y ear of operat ion becam e t he fast est gr owing GSM net w or k in
Africa, achieving record a one m illion subscribers, and cov ering over 60 t owns in j ust
nine m ont hs of operat ion. The subscriber figure at t he m om ent st ands at 2.7 m illion
wit h coverage ext ending t o over 3,000 t owns, com m unit ies and m aj or roads, t hus
becom ing t he second largest operat or as w ell as t he net work wit h t he widest
cov erage in Nigeria. The net w or k will soon ext end it s front ier s t o t he West African
sub- region as it is now in t he final st ages of concluding negot iat ions wit h t wo
neighbouring count ries.
While pursuing t he ex pansion st rat egy wit h vigour, t he net work has earned t he
ident it y of t he Nigerian innovat or. This is because it boast s a wide variet y of
innovat ive packages and t ariff plans designed t o fulfil t he needs of a broad spect rum
of m ark et segm ent s in Nigeria.
27
71 telephone exchanges which had remained unserviceable for several years were removed from the
NITEL’s books by its management contractors. The exchanges, mainly analogue types, provided a
“capacity” of nearly 200,000 lines.
NCC © 2005
Page 45
Prom inent am ong t he innovat ions Glo Mobile int roduced w ere t he Per Second Billing,
Txt 2Em ail, Friends and Fam ily, Pre- paid Prem ium , Mult im edia Messaging Service
( MMS) , Talk Now , Magic Plus, Glo Direct , Glo Mobile I nt ernet , Pr ofit Max Plus and
GloFleet m anager.
I n January 2003, Globacom announced plans t o cov er 76 cit ies wit hin six m ont hs for
it s GloMobile GSM net wor k. The second nat ional operat or ( SNO) w as awarded a
bouquet of licences cov ering GSM, fixed w ireless access ( FWA) , int ernat ional
gat eway and nat ional long dist ances ( LDO) licences. The oper at or officially launched
it s GSM net w ork on 27 August 2003, and a y ear lat er at t he end of August 2004
launched Nigeria’s first 2.5G ( general packet radio ser vice, GPRS) net w ork .
0DQDJHPHQW
Globacom is owned by Ot unba Mike Adenuga, who is t he chairm an. Mr. Paddy
Adenuga is Ex ecut ive Direct or, GloMobile; Miss Bella Adenuga, Execut ive Direct or- Glo
Gat eway; Mr. Ashok I srani, Chief Operat ing Officer , Glo Gat eway ; Mr. Deepak
Verm a, act ing Chief Operat ing Officer, Globacom ; and Mr. Subhra Das is t he group
Direct or of Mark et ing and St rat egy , Globacom .
1HWZRUNFRYHUDJH
Globacom has cov ered ov er 87 m aj or t owns in t he first year of operat ion, wit h
expansion st ill going int o m any part s of t he count ry.
1HWZRUNVL]HDQGLQVWDOODWLRQV
GloMobile is t he first and only m obile operat or t o deploy environm ent ally friendly
palm t ree and pine t ree base st at ions in Nigeria. Globacom had added 1.3m
subscriber s as at August 2004. I n t he sam e m ont h it deployed a 2.5G GPRS net w or k
support ing bot h voice and high- speed dat a t r ansm ission. The operat or is laying a
2,800 fibre opt ic nat ional backbone t o provide broadband access and reliable voice
and dat a t ransm ission. Globacom has deployed four st at e- of- t he- art gat eways in Port
Har court , Abuj a and t w o in Lagos.
I n August 2004, Glo Gat eway com m issioned t he first of five int ernat ional gat eway
swit ches for six cont inent s. The swit ches will provide t elephone hubbing ser vices t o
t he r est of t he world. The operat or est im at es it will carry one billion int ernat ional
m inut es wit hin t he next one year, wit h 350 m illion m inut es com ing from Nigeria. The
gat eway infrast ruct ure and swit ches ar e based in Africa, Singapore, Hong Kong, The
Unit ed Arab Em irat es and Aust ralia.
The first swit ch locat ed abroad, in London ( UK) , becam e operat ional in August 2004.
The launching of ot her swit ches in Paris, France, Fr ankfurt , Germ any and t he Unit ed
St at es of Am erica will follow. I t has also int erconnect ed wit h int ernat ional carriers
including Belgacom of Belgium , Link Africa, KPN Eurov oice of Net herlands and France
Telecom . Ot hers ar e I DT Global and Cable and Wireless of t he Unit ed Kingdom ,
iBasis of USA, T- Sy st em s of Germ any and Teleglobe of Canada.
The facilit ies will enable Globacom t o direct ly int erconnect ot her leading int ernat ional
car riers and services provider s, on t he one hand providing qualit y hubbing and
t erm inat ion services for ot her operat ors int o Nigeria, and on t he ot her allowing
Globacom t o aggregat e t raffic fr om wit hin Nigeria for delivery t o t he r est of t he
NCC © 2005
Page 46
world. Calls previously lost in int ernat ional t raffic will now be com plet ed ( t erm inat ed)
due t o direct connect ivit y wit h int ernat ional car riers. The m aj or benefit s of t his
dev elopm ent for Nigerian t elephone users is subst ant ial saving on int ernat ional calls,
im proved v oice clarit y, a significant reduct ion in call delays, and t he elim inat ion of
dist ort ions. The dedicat ed circuit s provided and m anaged by Globacom will also
ensur e higher call com plet ion rat es.
I n August 2004, Globacom announced t hat it plans t o invest in a new subm arine
fibre opt ic cable, which will run from Lagos t o t he Unit ed Kingdom for direct
connect ivit y wit h Europe and t he r est of t he w orld. The fibre opt ic cable would
provide addit ional t raffic capacit y alongside what it is current ly r eceiving from SAT- 3
t hrough an int erconnect deal wit h NI TEL. The pr oj ect w ould cat er for long- t erm
bandwidt h requirem ent s and address cur r ent t raffic t rends of Nigerian operat or s.
I n t he sam e August 2004, Globacom also st art ed offering short m essage services
( SMS) t o it s subscribers t o 574 dest inat ions in 152 count ries around t he world. Wit h
t his service, subscribers now send and r eceive short m essages t o m any m or e
dest inat ions t han previously available.
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Globacom ’s m ain supplier s ar e Siem ens and Alcat el. Siem ens is building fibre opt ic
t ransm ission backbone int egrat ing nort h and sout h Nigeria. The proj ect is backed by
PNB Paribas of France and ot her Nigerian banks.
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MTN Nigeria is t he m ost successful t elecom m unicat ions com pany in t he count ry t o
dat e. I t is a unit of t he Sout h African com pany by t he sam e nam e but has Nigerian
businessm en and wom en holding a 22.5% m inorit y st ake. Since launching in 2001, it
has led t he pack and now has ov er 3.3 m illion subscribers. MTN’s success has been
at t ribut ed t o it s solid parent com pany, which backs it wit h adequat e financial and
hum an resources. Local banks and m ult ilat eral dev elopm ent finance com panies have
also lent valuable support , enabling t he com pany t o rapidly cov er m ost of t he
nat ion’s urban localit ies.
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MTN Nigeria is 76.44% owned by Mobile Telephone Net work s I nt ernat ional Lim it ed,
20.56% owned by Nigerian part ners wit h t he I nt ernat ional Finance Corporat ion, t he
infrast ruct ure invest m ent arm of t he World Bank, holding t he balance of 3%
shareholding. Mr. Pascal Dozie is t he Chairm an of MTN Nigeria, Col. M. Sani Bello,
Vice Chairm an, and Mr. Sifiso Debengwa, t he Managing Direct or .
Net w ork cov erage and ser vices
As at Decem ber 2004, MTN cov er ed ov er 90 m aj or t owns in Nigeria. The com pany
has a t ot al of 21 m obile swit ching cent res and ov er 940 radio base st at ions acr oss
t he count ry. Sev er al m ore ar e in t he pr ocess of being inst alled.
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J%KELMNOQP M-J LR LS/T U<UWV MP S/X/Y@P T%MO(Z[XK@\#L/Y O<P M<]^P _LK@P Xa`b*b/c/d `b*b#e
I n January 2003, MTN com m issioned t he first phase of it s digit al m icrowave
t ransm ission backbone, Y’elloBahn. Const ruct ed at a cost of $120 m illion, Y’elloBahn
spans 3,400 kilom et res and t raverses over 120 cit ies, villages and com m unit ies.
Y’elloBahn is Africa’s m ost ext ensive t ransm ission infrast ruct ur e and has helped t o
enhance call qualit y on MTN’s net work, while cov erage has been ext ended t o m or e
t han 90 m aj or t owns and a t ot al of over 5,000 villages and com m unit ies across
Nigeria. The second phase of Y’elloBahn is cur rent ly ongoing and will span anot her
4,500 kilom et res.
MTN’s service offerings include product s such as MTN Pay As You GoTM, MTN FlexiTM
( all prepaid packages) , MTN Messenger, MTN BusinessTim eTM ( post - paid or
cont ract packages) , MTN Boost er CardTM, as well as an array of value added
services t hat include Enhanced Dat a and Fax, Short Message Ser vice ( SMS) ,
I nt ernat ional Roam ing, Wireless Applicat ion Prot ocol ( WAP) MTN Funt onesTM, MTN
Direct ory EnquiriesTM, MTN Business Dir ect ory , MTN Graphix, MTN Logos, MTN
Downloads, Recharge a Cont ract and Virt ual Boost er.
I n 2004, MTN connect ed sixt y- four addit ional int erconnect ion circuit s t o ot her
operat ors t o enable int er connect wit h ot her net work s. The com pany inst alls m ore
t han 20 base st at ions each m ont h, and cur rent ly has t he m ost ext ensive GSM
infrast ruct ure across t he count ry. The com pany has cov er ed ov er 5,000 com m unit ies
and recent ly launched a new cam paign t agged “Ev er ywher e you go” – a reflect ion of
t he br eat h of it s net wor k size.
MTN has num er ous suppliers spanning t he ent ire gam ut of GSM ser vices and
applicat ions. The com pany’s m aj or infrast ruct ur e supplier is LM Ericsson.
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The com pany st art ed as Econet Wireless Nigeria ( EWN) Lim it ed, t aking it s nam e
from it s original t echnical part ner, Econet Wireless I nt ernat ional ( EWI ) , which was
founded by Zim babwean St rive Masiyiwa. The t wo part ner s becam e em br oiled in a
bit t er quar rel ov er m oves t o give m anagem ent cont r ol of t he firm t o Vodacom of
Sout h Africa in 2004 – a m ove EWI is st rongly opposed t o and is fight ing in court s in
Lagos, Paris, and Johannesburg. The bit t er int ernal rancour init ially affect ed t he good
fort unes of t he com pany t hat st art ed as MTN’s ar ch rival. As t he quarr el divert ed
at t ent ion from t he m ain business, t her e w as lit t le cash t o finance operat ions.
How ev er, wit h t he May 2004 re- launch as Vm obile, t he com pany has been t urned
around and has becom e com pet it ive. I t s subscriber base is approxim at ely 2.4
m illion. Vm obile has acquired fairly good cov erage t hrough an aggr essive roll out
st rat egy, and pr esent ly operat es in over 40 t owns. Vm obile was first t o launch in
Lagos, Port Harcourt , Uyo, Warri, Kano and I badan, and is 100% Nigerian- owned.
Managem ent
Vm obile is fully owned by indigenous invest or s including t hree st at e governm ent s,
nam ely Lagos, Delt a, and Akwa I bom , banks and ot her inst it ut ional invest or s. Mr .
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Gam aliel Onosode is t he Chairm an of Vm obile, Mr. Willem Swart , t he Chief Execut ive
Officer, while Jean Pierr e Snij ders is t he Chief Regulat ory Officer.
Net w ork Cov erage and Ser vices
Since t he com m encem ent of it s operat ions, Vm obile has firm ly em bark ed on an
aggressive pursuit of service. By t he end of 2004, t he com pany had cov er ed over 50
m aj or t owns via net work invest m ent s t ot alling $650m illion wit h $300 m illion in
equit y and $350 m illion in debt and vendor financing. I t has int ernat ional roam ing
services in over 60 count ries and also has agreem ent s wit h 100 net work s in t he
world.
Vm obile has a range of product s, which includes, Veego - a prepaid package;
Vcorporat e solut ions - t he cont ract package; and Freedom - an innovat ive prepaid
cont ract package. Vm obile also offers t he following value added ser vices nam ely
Vm obile voicem ail, t ext m essaging, int ernat ional roam ing, confer ence call, ringt ones,
graghics, news, gam es, ent ert ainm ent s, sport s, inform at ion services, lov e & life and
save m y cont act s.
Vm obile’s m ain infrast ruct ure suppliers are Ericsson and Har ris Corporat ion.
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Nigerian Mobile Telecom m unicat ions Lim it ed ( M- TEL) is t he m obile unit of NI TEL.
Est ablished in 1996 for t he purpose of pr oviding affordable and reliable m obile
cellular services all over t he count r y, MTEL t ook ov er t he operat ions of 10,000
( TACs)
Analogue
syst em ,
which
was
hit hert o
m anaged
by
Nigeria
Telecom m unicat ions Lim it ed ( NI TEL) . I n 2001, MTEL was m erged wit h NI TEL t o
m ake for m or e pract ical and conv enient operat ion.
I n April 2003, MTEL was br ought back t o deploy GSM ser vices nat ionwide. How ev er
despit e t he ent r y of Pent ascope in 2003, it has cont inued t o lag behind ot her m obile
firm s. As at end of 2004, it s subscriber base st ood at 892,000.
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The Nigerian Governm ent wholly owns MTEL. Mr . Edwin Mom ife is t he Chief
Ex ecut ive Officer, Sham sudeen Alonge, Chief Technical Officer, Prince A.B Apam pa,
Chief Mark et ing Officer , and A.Z. Ahm ed, Chief Finance Officer .
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Mt el has covered all t he 36 st at e capit als and Abuj a. A t ot al num ber of 85 t owns
have been covered by Mt el in 2004. I t offers t he following GSM Cellular services:
basic t elephone and SMS; offers per second billing; m ost affordable GSM net w or k,
and curr ent ly upgrading t o GPRS.
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MTEL has spot - coverage in all t he 36 st at e capit als wit h it s net wor k t ransm ission
built on t he legacy infrast ruct ur e of it s parent . The com pany’s st rat egy has been t o
deliver seem ingly lim it ed GSM presence across t he count ry.
MTEL’s m ain infrast ruct ure suppliers are Huaw ei, Ericsson, and Mot orola.
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Mult i- links st art ed oper at ions in Decem ber 1997 as t he first privat e com pany t o roll
out fixed wireless phones in Nigeria. The com pany’s net w ork operat ion is based in
Lagos and boast s of ov er 100,000 subscribers.
Mult i- Links was t he first evidence of t he successful com m encem ent of t he
liberalizat ion of t he Nigerian t elecom m unicat ions sect or. Since 1997, Mult i- Links has
im print ed it s brand on t he m inds of m any t elephone users in t he Gr eat er Lagos ar ea
as a r eliable net work . Mult i- Links is curr ent ly expanding it s net work t o increase
capacit y in Lagos t o 100,000 subscriber s and plans t o inst all independent net wor ks
in six ot her cit ies. Ex pansion plans are based on CDMA2000 1X and 1xEV- DO
t echnologies which high speed dat a services.
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I nt ercellular was incorporat ed in Decem ber 1992. I t began operat ions in January
1998 r endering lim it ed m obile and fixed wireless services. I t curr ent ly has over
100,000 subscriber s. I t s services ar e available in Lagos, Abuj a, Kano, Zaria, and
Maiduguri. I nt er cellular is also looking abroad for expansion. I t has w on a licence t o
provide services in Sierr a Leone. I t hopes t o becom e a publicly quot ed com pany wit h
it s shares list ed on t he Nigerian St ock Exchange in t he near fut ur e.
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The firm com m enced net work operat ions in 1998. Alt hough it j oined t he ranks of
PTOs relat ively lat e, it is rubbing shoulders wit h t he leaders t oday . I t has over
100,000 subscriber s in Lagos. St arcom m s pr ov ides prepaid voice and dat a services
t o ov er 145,000 subscribers including ret ail user s, corporat es and com m unit y
cent r es. The com pany uses CDMA t echnology which provides high qualit y voice and
3G- t ype t elecom s services t o it s cust om ers. The com pany is also t he first business of
it s t ype t o at t r act int ernat ional privat e equit y in Africa.
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The com pany was am ongst t he first set of Licensees t o pr ovide fixed t elephone
services in t he count r y in 1996. The com pany’s area of operat ion is t he whole of t he
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sout heast ern Nigeria, which includes t he sout h- sout h geopolit ical zone of t he
count ry .
The com pany, which also com m enced operat ions in 1998, has no less t hat 75,000
subscriber s, and cover s all t he st at es wit hin t he cov erage ar ea specified in it s
operat ing licence.
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21 st Cent ury is a pioneer fibre opt ic based privat e t elephone com pany. The
com pany’s m ain ser vices ar e high- speed I nt ernet access as w ell as voice
provisioning. 21 st Cent ury has gr own t o becom e a r eliable alt ernat ive t o NI TEL in t he
business dist rict s of Lagos wher e it has fixed lines.
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VGC st art ed offering fixed wired t elephone ser vices in t he Vict oria Garden Cit y, an
upm arket r esident ial est at e on t he Lekki Ex pressway in Lagos. The com pany ’s
product range has grown t o include a basket of services, including FWA, I SP, DSL
and fibre opt ic cable opt ions t o it s subscribers, r esident m ainly wit hin Lagos.
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On 8 August 2004, MTS 1 st Wireless officially launched com m ercial ser vices following
t he deploym ent of it s st at e- of- t he- art infrast ruct ur e for nat ionwide wireless
t elephony services, nat ional long dist ance com m unicat ion carrier services,
int ernat ional dat a gat eway services and I nt er net services provision. This heralds a
new era in t elecom m unicat ions services pr ovisioning in t he count ry. Apart from t he
t wo nat ional carriers NI TEL and Globacom , MTS’ int egrat ed digit al t elephony ser vices
m arks it out am ong PTOs as t he only long dist ance operat or wit h a bundle of
services. Engineer Richm ond Aggr ey, Vice Chairm an and Chief Ex ecut ive Officer of
MTS 1 st Wireless, said t he r et urn of t he com pany t o Nigeria aft er eight year s will
t ransform t he long dist ance and wireless t elephone service pr ovisioning.
The com pany had over t he cour se of t he last t wo year s been working t o deploy
infrast ruct ure across t he count ry. I t launched com m er cial services in August 2004
wit h 5,000 subscribers already connect ed t o it s net work , m ost of which were
previous cust om er s during t he operat or ’s first soj ourn t o Nigeria fr om 1992 t o 1998.
During t his period, MTS had a 50: 50 j oint vent ure wit h NI TEL, which was t erm inat ed
during t he regim e of lat e General Sani Abacha. MTS t hen r et urned t o t he m ark et
aft er t he r et urn of dem ocracy , and it s form er subscriber s wer e reconnect ed free of
charge.
MTS was t he first privat e com pany t o win a m obile licence in t he 1990s, but it s j oint
vent ure wit h NI TEL fell apart ov er quarr els about unpaid debt . MTS re- j oined t he
t elecom s t errain in 2002, t hough it has had t o lim it it self t o offering analogue m obile
service as well as fixed wireless access. I t has rolled out over 20,000 lines in Lagos
and plans t o increase subscript ions wit h at t ract ive t ariff rat es and addit ional
cust om er incent ives.
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MTS is using CDMA 2000 1X t echnology deployed by Chinese t echnical part ners
East com and China Put ian and t heir Nigerian part ners, Bacom . I t com bines good
speech qualit y and high- speed dat a t ransm ission enabling I nt ernet connect ivit y.
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Lt . Gen. I nua Wushishi ( Rt d) Chairm an, MTS Nigeria Board of Direct ors. Engr.
Richm ond Aggrey, Vice Chairm an/ CEO; Dr. Eugene Juwa, senior Vice President , Dr
Osariem e Bazuaye, senior Vice Pr esident ; Mr. Charles Kim brough, senior Vice
President , Engr . Bob Okonyia, m em ber; Chief Obafem i Olopade, adviser; Chief
Kayode Ogunm ekan, m em ber.
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MTS’ m assive r ollout is backed by leading financial inst it ut ions including Union bank,
Guarant y Trust Bank Plc, Cit y Expr ess Bank Plc, Equit y Bank Plc, I MB Plc, Asset
Managem ent Resour ces Lim it ed ( ARM) , t he US Exim Bank, Sofit el Capit al I nc. and
m any facilit at ors and cr edit ors bot h wit hin and out side t he count ry.
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MTS aim s t o capt ure a subst ant ial share of t he wireless t elephony m ar ket in order t o
achieve 1.5 m illion lines wit hin 36 m ont hs from dat e of com m ercial launch. China
Put ian has built CDMA 2000 1x net w ork wit h an init ial capacit y for 100,000 voice and
dat a lines deployed in t he key cit ies of Lagos, Abeokut a, I badan, Abuj a, Onit sha,
Asaba, and Port Har court . The operat or first launched com m er cial ser vices in Lagos,
and present ly has under 100,000 subscriber s.
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Prest el is based in Benin Cit y, Edo st at e and has been offering t elephone services in
Edo St at e, Mid- West Nigeria since 1999. I t is one of t he PTOs licensed by t he NCC t o
provide fixed wireless access ( FWA) ser vices in t he 3.5GHz band. I n 2004, t he
com pany deploy ed CDMA 2000 1X services and increased it s t errit or ial coverage t o
include Delt a St at e.
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Peace Global Sat ellit e Com m unicat ions Lim it ed, a PTO ent er ed t he fiercely
com pet it ive sect or wit h an init ial capacit y of 4,000 lines. The com pany provides
wireline t elephone serv ices, and first launched ser vices in t he resident ial part s of
I k ej a and ot her part s of Lagos. Peace Global Sat ellit e offers 3HDFH7DON and t wo ot her
product s, 3HDFH &RQQHFW and 3HDFH $FFHVV. The edge t hat 3HDFHWDON wireline has
ov er ot her ser vices, according t o t he Chairm an of Peace Global Barrist er Or ey e,
hinges on t he fact t hat all t he cabinet s or cross connect ion point s ( CCP) are linked t o
t he t elephone ex change via t he concr et e under ground duct .
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Below is a run- down of som e of t he new oper at ors t hat com m enced operat ions in
2003 and 2004, using t he 3.5Ghz fr equency . Reasons why som e ot her s could not
launch ser vices include:
•
Poor m ark et analysis and underst anding of k ey challenges t hat would be faced
post - launch
•
Capit al needed t o st art operat ion is oft en great er t han ant icipat ed
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Rainbownet was one of t he 19 t elecom m unicat ions com panies licensed by t he NCC in
July 2002, t o provide Fixed Wireless Access ( FWA) t elecom m unicat ion ser vices on a
regional basis in t he 3.5GHz fr equency band. Rainbownet provides t elecom ser vices
in t he five Sout heast ern st at es of Nigeria, and launched com m ercial services in
August 2003.
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Mrs Chinelo Anaer o, Chairm an and Chief Ex ecut ive Officer; Mr. Uzom a Onwucheka,
Managing Direct or of Rainbownet .
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The first phase of Rainbownet ’s net w or k r ollout cov ered Enugu, Onit sha, Aba,
Ower ri and Abakaliki, while t he second phase will see t he operat or expanding t o
places like Nsuk ka, Aw k a, Nnewi, Orlu, Um uahia am ongst ot her s. The operat or offer s
subscriber s t hree cat egories of m ult i- m edia t elephony services: SUHPLXP,
PXOWLPHGLD and GHOX[PHGLD. Rainbownet deployed a Synchr onous Code Division
Mult iple Access ( S- CDMA) net wor k t o provide high dat a ser vice and high link qualit y.
Ot her value added ser vices include voice m ail, call t ransfer, t hr ee w ay conference
call, et c. All cat egories of services com e wit h st andard I DD ( int ernat ional direct dial)
facilit y and call ident ificat ion.
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Oduat el is one of t he 3.5GHz FWA operat ors. The com pany is owned by t he five
sout hwest St at es and has it s headquart er s in I badan, Oy o st at e. Oduat el has not
fully est ablished it self in t he indust ry since com m er cial launch t his year. I t has been
engulfed by bur eaucrat ic int erference as t he Chairm an Mr. Kola Baj om o was
rem ov ed from office, and t he Managing Direct or suspended unt il t he owner St at es
det erm ine how t heir invest m ent s hav e been ut ilized.
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The owner St at es said close t o N20bn ( US$144m ) has been invest ed in t he net work
wit hout m uch t o show so far in t erm s of expansion and coverage. One of t he gr ouses
of t he gov ernm ent owner s is t hat Oduat el is st ill lim it ed t o I badan and it s environs,
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Page 53
alt hough it is expect ed t o cover t he ent ire five st at es offering lim it ed m obilit y and
fixed wireless t erm inals phone services.
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St art ech Connect ions Lim it ed is an FWA net wor k operat or based in Abuj a wit h
licences t o cov er Abuj a, Kano and Kaduna and environs, and also a wireless I nt ernet
service pr ovider ( WI SP) . St art ech Connect ions Lim it ed uses a 3.5GHz net work t o
provide dat a and voice services, and launched com m er cial services in t he second half
of 2003. I t has m ade an im pact in t he cit y and is current ly expanding t o ot her cit ies
wit hin it s licence perm it .
During April 2004 St art ech Connect ions was t he first PTO t o launch a wireless fidelit y
( Wi- Fi) 28 hot spot in Abuj a, branded as 6WDUVSRW. The 6WDUWHFK ([SUHVV net w ork,
which operat es on t he broadband fixed wireless access 3.5GHz frequency, pr ovides
t he I nt ernet backbone for t he 6WDUVSRW. The Brit ish Council, Abuj a was t he first
cust om er of 6WDUVSRW.
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Miss Anne Bresnahan, a Nort h Am erican, is t he Managing Direct or of St art ech
Connect ions Lim it ed.
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XS Br oadband is a j oint vent ur e bet w een UBA Capit al and Trust , and Resourcery. XS
Broadband acquired a num ber of 3.5 GHz FWA licences during t he auct ion in May
2002. The j oint vent ure also operat es a m et r opolit an area net work ( MAN) belonging
t o Resour cery Nigeria Lim it ed. UBA Capit al and Trust and Resour cery m erged t o form
XS Br oadband Lim it ed, a br oadband com pany pr oviding voice, dat a and I nt ernet
services m ainly for corporat e client s and sm all and m edium ent erprises ( SMEs) . The
com pany launched oper at ions in t he 3.5GHz band in early 2004.
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Mr. Erik Sung is t he Managing Direct or . The com pany is locat ed at Discov ery house,
18 Adeola Hopewell, Vict oria I sland, Lagos.
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XS Broadband has licences t o cover 24 st at es of t he federat ion, and curr ent ly cov er s
t hree m aj or cit ies nam ely Lagos, Port Har court and Abuj a.
28
A Wi-Fi hotspot is a public area where computers equipped with a wireless module can connect to the
Internet through a wireless access point. A single access point can be reached within a radius of 20 metres.
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Swift Net works, a 3.5GHz br oadband FWA oper at or, debut ed wit h coverage in Lagos.
Form ally known as I zaga Net work s, Swift Net wor ks was one of t he FWA operat or s
licensed t o operat e in t he 3.5 GHz spect rum in May 2002. The com pany has built a
large client base am ong t he banking and financial services, m anufact uring and
inform at ion t echnology sect or s. Swift has deployed CDMA 2000 1X t echnology t o
provide dat a, I nt ernet and voice t raffic.
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Accelon ( Nigeria) Lim it ed is a sat ellit e- based global value added net work ( VAN) and
I nt ernet service pr ovider ( I SP) offering sat ellit e, host ing services and dat a
com m unicat ions services t o corporat e client s acr oss t he world. I t began full
operat ion in Nigeria in July 2004, alt hough it has been act ive in t he count ry since
Februar y 2004.
Accelon is also operat ing in Sout h Africa and Ghana. I t curr ent ly has about 15- 17
sit es in Ghana and plans t o st art expanding t o ot her part s of t he r egion. I t s business
m odel is robust and support s m ult i- count ry operat ions. Accelon has sat ellit e access
from it s invest or s SES Ast ra of Eur ope. I t provides service from Senegal t o Sao
Tom e, and has one of t he st rongest sat ellit e beam s focussed ov er West Africa.
Accelon.
Mr. Folaj im i Ogunsiakan is t he Managing Direct or of Accelon Nigeria. Accelon has
invest ed over US$30 m illion in t he Nigerian operat ions.
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Koochi Com m unicat ions is one of t he global I nt ernet service providers ( I SP) t hat
opened shop in Nigeria t his year. I t has offices in Lagos, Abuj a and England ( UK) . I t
provides I nt ernet service provisioning, Voice over I nt ernet Pr ot ocol ( VoI P) and dat a
services for users of all t ypes t o int egrat e t elephony, dat a, and video over I P- cent ric
or m ult iservice- based dat a net works prim arily t o cyber café operat ors and corpor at e
client s. Koochi net wor ks operat e under t he foot print s provided by t he Panam sat PAS10, I nt elsat I S- 907 and New Skies NSS- 7 sat ellit es.
Koochi provides a variet y of bandwidt h packages, ranging from a nom inal package
allowing cust om er s t o pay only for t he bandwidt h t hey use t o an unlim it ed bandwidth
t ariff. Koochi’s EURDGEDQG'LJLWDO0XOWL6HUYLFH ( bDMS) net w or k pr ovides support for
voice and high- speed I nt ernet access t o Africa’s large and sm all ser vice providers,
including est ablished players and new com pet it ive ent rant s. Koochi’s suit e of sat ellit e
t elecom m unicat ion product s allows dist ribut ed locat ions t o est ablish and m aint ain a
com m unicat ion solut ion t hat sat isfies corporat e requirem ent s for a global Wide Area
Net w ork ( WAN) . I t offer s product s t hat can support t ransfer r at es in excess of
5Mbps.
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Two v endors supply Koochi’s VSAT t erm inals, I sraeli vendor Gilat ( 6N\VWDU (
Term inals) and US vendor ALOHA Net w or ks ( 6N\'6/ VSAT t erm inals) . The price of
t he VSAT equipm ent is US$1,500 and Koochi t ariffs st art s at US$48 while t hose of
cybercafés and larger net work s is $700.
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Mr. Julian Madubuiko, Chief Technology Officer.
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MWeb Nigeria Lt d is an I SP offering t wo- way sat ellit e- based I nt ernet access service.
MWeb is an offshoot of Mult ichoice Lim it ed, provider s of digit al sat ellit e t elevision
( DSTV) in t he count r y. MWeb Nigeria uses t he I nt elsat I S- 907 sat ellit e, which has a
spot beam cent r ed ov er Nigeria.
The operat or ’s VSAT offering com prises a 1.2 m et r e dish out - door unit and t he 360E
indoor- unit bot h supplied by t he I sr aeli vendor Gilat I P plat form , while also m aking
use of digit al video broadcast ( DVB) and VSAT t echnology. The hub is locat ed in
Fuchsst adt , Germ any and has a 25 Gigabyt e connect ion int o t he European backbone.
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Mr. Jannie Van Rhyne, General Manager, MWEB Nigeria. Mr. Har ry Aucam p, General
Manager , MWEB Africa.
/LQNVHUYH
Linkserv e is a Lagos based I SP which is am ongst t he largest in t he count ry, wit h
perhaps a quart er of t he t ot al m arket . The com pany is one of t he count ry’s bet t er
known I SPs and has Capit al Alliance Nigeria am ong it s invest or s. Linkserv e has t hr ee
POPs in Lagos and t hree out side Lagos - one in Abuj a, one in Aba and one in Port
Har court . Linkserv e is also a licensed sat ellit e operat or and connect s t heir POPs t o
t he I P pr ovider in t he US wit h a 1Mbps VSAT uplink and a shared 2.5Mbps downlink
which has t he capacit y t o go t o 12Mpbs. I n 2003 t he com pany built it s own hub in
t he US and began offering direct Ku- band sat ellit e ser vices.
9'7&RPPXQLFDWLRQV
VDT Com m unicat ions Lim it ed, a subsidiary of BI TCOM Gr oup has invest ed ov er
N200m ( US$1.44m ) in a digit al subscriber line ( DSL) access net w ork in m aj or
Nigerian cit ies. The com pany provides end- t o- end dat a com m unicat ion services for
t he inform at ion t echnology, t elecom m unicat ions, financial services and oil and gas
sect or s. Am ong t he ser vice offerings from VDT are a dedicat ed DSL t runk; offering
m inim um 64kbps bandwidt h and m ult iples of 128kbps, 256kbps, et c t o cust om ers
wit h increasingly heavy dat a t raffic r equiring a dedicat ed link for t heir operat ions.
The com pany was licensed by t he NCC in 2001 t o pr ovide value added net w or k
services ( VANs) and began operat ion in July of t he sam e y ear . How ev er , it launched
NCC © 2005
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full- fledged services aft er expanding it s net work infrast ruct ur e. VDT uses NI TEL’s
SDH infrast ruct ur e cor e backbone, it s own access point ( POPs) , and NI TEL’s copper
wireline infrast ruct ur e from t he near est ex change. VDT Com m unicat ions has DSL
point s of presence ( POP) locat ed in I kej a, Onit sha, Port Harcourt , Enugu, I badan,
Kano, Kaduna, Abuj a, Aba, Jos, Benin Nnewi and Lafia.
/RQJ'LVWDQFH0HWURSROLWDQ1HWZRUN2SHUDWRUV
Three com panies lead t he long dist ance service sect or. They ar e:

Suburban Telecom s, based in Abuj a

VGC Com m unicat ions, based in Lagos

21 st Cent ury Com m unicat ions
These com panies offer high- speed br oadband ( voice and dat a) ser vices as well as
wholesale t raffic t ransm ission links via int ra- cit y/ int er- cit y fibre opt ic net wor ks.
,QWHUQHW6HUYLFH3URYLGHUV,63V
7UXPSHW,QWHUQHW7HOHYLVLRQ7,79
Trum pet I nt ernet Telev ision ( TI TV) com m enced operat ions in Sept em ber 2004, by
t he launch of direct - t o- hom e high speed I nt er net ser vices as well as a bouquet of
t elevision channels via sat ellit e. TI TV serv es TV viewer s wit h sim ult aneous I nt ernet
access connect ions, and plans t o becom e a m aj or player in I nt ernet service
provisioning wit hin t he count ry .
)URQWDJH6DWHOOLWH6HUYLFHV)679
The brainchild of Reuben Fam uyibo, CEO, FSTV, and a prom inent Niger ian polit ician,
FSTV is a new t elevision service pr oviding direct - t o- hom e DVB t elevision
program m ing for t he Nigerian m arket . Launched m id- 2004, FSTV offer s 20 sat ellit e
channels accessible by pr epaid subscript ions using a novel pay- as- y ou- go scrat ch
card sy st em . Viewers can also subscribe t o I nt ernet services accessible via sat ellit e
cable m odem s. Newskies Sat ellit e and Kingst on I nm edia UK ar e t he firm ’s m aj or
part ner s. FSTV is t he fir st indigenous cable sat ellit e com pany .
2WKHU9DOXH$GGHG6HUYLFH3URYLGHUV
The pioneer Value Added Ser vice Com pany in Nigeria is MTech Lim it ed. Founded in
2001, Mt ech dev elops and m anages value- added m obile cont ent services t o help
operat ors achieve a v ariet y of obj ect ives. The com pany m aint ains a library of
ringt ones for differ ent handset s including Sagem , Sam sung, Nokia, Ericsson, and
Mot orola.
Exam ples of value added service providers t hat com m enced operat ions during t he
period under r eview include:
•
6DYH0\&RQWDFWV is a leading m obile handset phonebook backup ser vice
t hat allows a subscriber t o backup a m axim um of 1,500 cont act s direct ly
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from t he m obile phone’s m ain phone m em or y, t o t heir own secur e, r em ot e
dat abase account cr eat ed aut om at ically upon subscript ion. The subscriber
t hen has PI N secur e access t o all saved cont act s, 24 hours a day , fr om t he
handset , or via on- line web brow sing, from any wher e in t he world.
•
•
•
•
•
&HOOXODQW is a leading m obile m edia firm in sub- Saharan Africa, providing
ent ert ainm ent –based cont ent experiences. Their services allow consum er s t o
enj oy unique m ult im edia experiences on t heir m obile phones. Their m obile
m ark et ing offering allows brands t o connect wit h consum ers at t he m ost
per sonal ‘t ouch point ’ – t heir m obile phone. Cellulant has offices in Kenya,
Nigeria and t he UK. Sw apcom r epr esent s Cellulant in Nigeria.
$2 1LJHULD /LPLWHG is a t elecom m unicat ions solut ions provider t hat
specializes in t he delivery of connect ivit y solut ions, value- added services and
t echnological consult at ion. A3&0’s client base includes about a dozen radio
and TV st at ions, and it s key offering is CHAT services ut ilised in receiving live
feedback fr om radio list eners and TV view er s during t alk shows.
7H[W1LJHULD /WG is a Nigerian m obile m arket ing & SMS solut ions Com pany,
wit h dist ribut ion right s for 2G and 3G GSM t echnology. They pr ovide userfriendly value added ser vices using t he GSM plat form . Text Nigeria is curr ent ly
wor king wit h st rat egic part ner s, Aerius Holdings Lt d. and MindMat ics Lt d, t o
deliver bot h generic and cust om ized m ark et ing solut ions
* 5HDOLW\ 7HOHFRPPXQLFDWLRQV /WG launched it s unique wireless I nt ernet
solut ion ‘M’- access wireless I nt ernet service Pr oviders ( Wisps) in June 2004.
The firm also runs SMS Br oadcast Services t hat enables it s subscriber s t o
receive News Updat es, Prom os, and Adv ert s on t heir m obile phones.
(QWHJUDWLRQ 6ROXWLRQV is a m ark et leader in provision of Cust om er
Relat ionship Managem ent ( CRM) and revenue generat ing wireless/ m obile
value added solut ions and services. Ent egrat ion provides t urnkey
( cust om ized) solut ions for large businesses, Sm all Medium Ent erprises
( SMEs) , t rader s and ret ail consum er s.
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The leading equipm ent suppliers t o t elecom s com panies in Nigeria are:
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Ericsson, a Sw eedish t elecom m unicat ion giant and one of t he t elecom m unicat ion
equipm ent vendor s cam e t o Nigeria as a result of t he liberalizat ion in t he t elecom s
sect or in 2001. As at 2003, Ericsson has est ablished it self in Africa as t he leading
vendor wit h a 40 per cent m ark et share, said Jan Em bro, head of Ericson’s m ar ket
unit for Sout h Africa. Ericsson supplies equipm ent s t o Nigeria’s t hree m obile
operat ors and a couple of fixed operat or s, including Relt el and St arcom m s.
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Leif Edwall is t he Managing Direct or, LM Ericsson Nigeria.
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6LHPHQV1LJHULD
Siem ens is a Germ an engineering giant and has been operat ional in Nigeria since
1970. Siem ens supplies pow er and t elecom s infrast ruct ur e t o ut ilit ies and t elecom s
com panies wit h NI TEL, NEPA, and t he GSM com panies being it s m aj or cust om er s.
The com pany em ploys about 1,000 Nigerians. The com pany is in t he power sect or,
infrast ruct ure pr ovision, m edical business as well as t ransport at ion business. I t s
m ost r ecent large cont r act was for USD$200m t o inst all Globacom ’s Nort hern Nigeria
net work.
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ACCAT ( Nigeria) Lt d is a m aj or indigenous dist ribut or of t elecom m unicat ions and
broadcast equipm ent , ser ving t he Nigerian m ark et wit h product s from som e of t he
world’s leading m anufact urers and innovat or s. The liberalizat ion of t he
t elecom m unicat ions sect or of t he count ry has m ade it possible for Accat t o posit ion
it self t o provide pioneering dist ribut or services t o sat isfy t he needs of t he rapidly
growing t elecom & br oadcast indust ry. Wit h a large war ehouse locat ed in Lagos,
Accat has in st ock a wide variet y of product s used by t he GSM operat or s, PTOs, I SPs
and broadcast ers.
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Pet er Sinnot is t he m anaging Direct or, Accat Nigeria.
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ZTE Corporat ion is China’s largest list ed t elecom m unicat ions m anufact urer and
leading wireless solut ions provider. ZTE was one of t he first Asian
t elecom m unicat ions equipm ent m anufact urers t o ent er t he Nigerian m ark et post liberalisat ion and has since dev eloped close par t nerships wit h leading local operat or s.
ZTE is t he core supplier t o t he Nigerian Gov ernm ent on t he Nat ional Rural Telephony
program .
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Huawei Technologies is an aggressive Chinese t elecom m unicat ion equipm ent
m anufact urer. Est ablished in 1988, Huawei ent er ed t he Nigerian m arket in 1999 and
has gr own t o becom e a m aj or vendor supplying swit ches and base st at ion equipm ent
t o GSM and fixed wireless operat ors. The firm offer s equipm ent such as soft swit ch,
super DWDM, RBT service, high end rout ers am ongst ot her s. I t r ealized $5.58billion
from sales in 2004, wit h $300 m illion realised in Nigeria alone.
On social responsibilit ies t o t he local m arket , Hauwei has donat ed fr ee t ransm ission
equipm ent wort h $2.7 m illion t o Nit el, a com put er net work t o t he College of
Educat ion in I I orin, Kwara st at e, and has plans t o m anufact ur e m obile handset s
locally.
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John Wang is t he m anaging Direct or of Huawei Nigeria
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Mot orola Nigeria lim it ed is a leading t elecom solut ions provider and infrast ruct ur e
supplier. Mot orola provides cor e net w or k infrast ruct ure as well as syst em int egrat ion
services, and has delivered 2G- circuit cor e, packet cor e and base st at ions t o a
num ber of t he nat ion’s leading operat ors, including Vm obile, I nt er cellular and MTEL.
Mot orola has a st r ong presence in Nigeria, as indicat ed by t he opening of it s local
office in Lagos in May 2003.
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&RQFOXVLRQ)XWXUH2XWORRN
The Nigerian t elecom s sect or cont inues t o dem onst rat e st rong growt h prospect s,
wit h aggressive privat e com panies m aking solid at t em pt s at m eet ing t he dem and
needs of large sect ions of t he populat ion wit h respect t o t he pr ovision of high qualit y
voice, dat a and video ser vices. The fut ure gr owt h and com pet it iveness of t his vit al
econom ic sect or looks v er y bright .
Specifically, on t he horizon ar e:
1. 7KH IRUWKFRPLQJ SULYDWLVDWLRQ RI 1,7(/ by t he gov ernm ent ’s Bur eau of
Public Ent erprises ( BPE) .
7KHOLFHQVLQJRI9R,3VHUYLFHVRSHUDWLRQVE\1&&
3. 7KH &UHDWLRQ RI ,QWHUQDWLRQDO 'DWD $FFHVV ,'$ OLFHQVHV guidelines
has already been published by t he r egulat or. The I DA licence is t o include t he
right t o provide voice and dat a ser vices and full int erconnect ion t o Public
Swit ch Telephone Net w ork ( PSTN) .
4. 7KH HQG RI WKH H[FOXVLYLW\ SHULRG grant ed t o digit al m obile operat or s
licensees and t he im plicat ions t hereof.
5. 7KHLPSOHPHQWDWLRQRIWKHQHZXQLILHGOLFHQVLQJUHJLPH by NCC, due t o
com m ence from February 2006. The unified licensing regim e will allow
exist ing fixed wireless and m obile licenses t o pr ovide bot h services subj ect t o
geographical/ regional lim it at ions. I t will also m ark t he end of service- based
license segm ent at ion as all wireless licenses shall be fr ee t o offer v oice, dat a
or m ult im edia ser vices as t hey deem fit .
6. 7KH IXOO LPSOHPHQWDWLRQ RI WKH JRYHUQPHQW V 8QLYHUVDO $FFHVV
SURJUDP t o enable equit able access t o t elecom s r esour ces by t he ent ire
cit izenry.
7. ,QLWLDO 3XEOLF 2IIHULQJV E\ WHOHFRPV FRPSDQLHV is likely t o becom e
com m onplace. Tw o com panies, nam ely I nt er cellular and Relt el, have already
announced plans t o approach t he Nigeria St ock Exchange t o have t heir shares
t raded on t he floor of t he m ark et .
8. &RQWLQXLQJ IRFXV RQ DJJUHVVLYH FXVWRPHU DFTXLVLWLRQ DQG QHWZRUN
UROORXW The Com m ission has already set an indust ry t arget of 10 m illion
new subscript ions by t he end of 2005.
NCC © 2005
Page 61
%LEOLRJUDSK\
1. Africa Net work Operat or s Gr oup ( AFNOG) , :LUHOHVV 1HWZRUNLQJ LQ 1LJHULD,
2004
2. All Africa News – ht t p: / / www.allafrica.com
3. Balancing Act Newslet t er ( Several Edit ions) – ht t p: / / www.balancing- act .com
4. Cent ral
Bank
of
Nigeria,
ht t p: / / www.cenbank.org.ng
$QQXDO 5HSRUW 6WDWHPHQW RI $FFRXQWV
5. Com put erworld, Nigeria: A Massive Telecom m unicat ions Opport unit y, New
Zealand, 2004
6. Globacom websit e – ht t p: / / www.gloworld.com
7. I nform a Telecom s & Media, 0RELOH,QGXVWU\2XWORRN Mar ch 2005
8. I T & Telecom Digest ( Several edit ions) – ht t p: / / www.it - t elecom digest .com
9. Minges, M., $IULFD 7HOHFRPPXQLFDWLRQV
Telecom m unicat ions Union ( I TU) , May 2004
5HSRUW
I nt ernat ional
10. Mobile Nigeria Forum – ht t p: / / www.m obilenigeria.com
11. MTN
w ebsit es
ht t p: / / www.nt n.co.za
-
ht t p: / / www.m cell.co.za ;
12. Nigeria Com m unicat ions Com m ission,
Nigeria ( 1997 – 2002) , April 2004
Tr ends in
ht t p: / / m t nonline.com ;
Telecom m unicat ions in
13. Telegeography ( Sev er al edit ions) – ht t p: / / www .t elegeography.com
14. Vm obile websit e - ht t p: / / www .vm obilenigeria.com
NCC © 2005
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,QGH[
Addressable market, 8
ARPU, 19, 27
Base Stations, 14
Broadband, 15, 23, 28, 29, 40, 46, 54, 55,
57
Communication Satellite, 32
Competition, 2, 3, 6, 14, 15, 16, 23, 26, 28,
29
Connections, 5, 7, 57
Consumer Rights, 34, 35
Contracts and deals, 10
Coverage, 12, 23, 26, 27, 33, 35, 45, 46, 47,
48, 52, 53, 55
Demand, 3, 5, 15, 25, 29, 61
Employment, 15, 27, 37
Fibre Optics, 14
Fixed wireless, 17
GPRS, 19, 30, 46
Growth, 2, 3, 5, 7, 9, 12, 19, 20, 21, 24, 27,
29, 31, 34, 61
GSM, 3, 6, 11, 14, 15, 16, 17, 18, 22, 24,
25, 30, 31, 34, 35, 36, 38, 41, 45, 46, 58
Import duty, 3
Interconnectivity, 38
Internet, 3, 12, 15, 16, 19, 23, 27, 28, 29, 30,
31, 32, 33, 34, 39, 40, 41, 46, 51, 52, 54,
55, 56, 57, 58
Liberalisation, 2, 34
Licenses, 40
Local Manufacture, 34
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Market share, 6
Mobile Banking, 20
Mobile Commerce, 20
Multimedia Messaging Services, 20
Network coverage, 7
Operators, 2, 3, 4, 5, 6, 7, 9, 12, 13, 14, 15,
18, 19, 23, 24, 25, 26, 27, 28, 29, 30, 33,
34, 35, 36, 39, 40, 41, 42, 46, 47, 53, 55,
57, 61
Per second billing, 15
Price, 14, 15, 16, 17, 18, 27, 32, 56
Private Telephone operators (PTOs), 7
Privatisation, 33
Ringtone, 31
Rural Telephony, 41
SAT3, 33
SIM cards, 15, 16
SMS, 19, 30, 31, 34, 39, 47, 48, 58
Subscriber, 2, 5, 6, 14, 21, 45, 48, 56, 57
Telecom investment, 9
Telecommunications Act, 38
Teledensity, 3, 8, 9
Telephone Penetration, 8
Top Level Domain, 30
Transmission Backbone, 13
VSAT, 16, 29, 31, 32, 40, 41, 42, 55, 56
Waiting lists, 2
WAP, 30, 48
WiFi, 40
Page 63
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Trends in Telecommunications Market in Nigeria

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