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News Analysis: Democracy: Stimulating The Growth Of Nigeria's Telecom Industry


News » Politics
Nigeria

June.05.2014

As Nigeria celebrates 15 years of uninterrupted democracy, observers say that the country’s telecommunications sector has certainly witnessed tremendous achievements during the period.

Prior to the award of new licences to telecommunications operators by the democratic government which came into power in 1999; the licences that were issued to companies by the military regime were revoked.

The licensing process for the Global System for Mobile Communications (GSM) was cancelled early in 2000 and the Federal Government reopened the process of issuing four mobile cellular licences in December 2000, after soliciting credible bidders.

The four winners that emerged out of the process agreed to pay 285 million U.S. dollars as licence fees each but Econet Wireless Nigeria and Mobile Telephone Networks (MTN) Communications Nigeria were able to pay the fees within the mandatory 14-day period.

However, Communications Investments Nigeria Limited (CIL) failed to make the deposit into the bank account of the Nigerian Communications Commission (NCC), thereby forfeiting its licence and it was also barred from participating in NCC-organised auctions for a period of five years.

The new GSM licences, which were awarded for a period of five years, were renewable, and all operators operated on the 900Mhz and 1800Mhz spectrum bands.

Definite targets were set for the GSM operators in terms of network rollout and they were instructed to connect a minimum of 100,000 subscribers each within their first year of operations.

Each of the telecom companies was also asked to connect 1.5 million subscribers in five years, while attaining a minimum of five-per-cent geographical coverage in each of the country’s six geopolitical states.

Interestingly, the country's telecom operators have been able to connect over 177 million subscribers, of which more than 129 million of them are active users of the networks.

Mr Titi Omo-Ettu, the Managing Partner of Telecom Answers Associates, said that virtually all the perceptible achievements in the telecom industry were achieved during the democratic era.

``The ground work for the growth of the telecommunications sector in Nigeria had actually been done before the country’s return to democracy in 1999.

``The licences for mobile telecom were issued in 2000 and if you look at it from that perspective, you will see that democracy has actually brought good to the industry,’’ he said.

Omo-Ettu, a former President of the Association of Telecommunications Companies of Nigeria (ATCON), said that democracy facilitated the liberalisation of the telecommunications industry.

He stressed that the industry’s liberalisation had enabled the private sector to contribute more meaningfully to the country's Gross Domestic Product (GDP).

Omo-Ettu, however, noted that in spite of the fact that democracy offered a platform for the growth of the telecom industry, there were many areas of telecommunications which had yet to be exploited.

He attributed the failure to tap into many opportunities offered by the telecom industry to the dearth of continuous government investments.

``Yes, quite alright, we have liberalised telecommunications but liberalisation does not mean that the government should remove its hand completely from the industry; the government should strive to push the industry to where it wants it to be.

``And in all the government’s telecommunications policies, there is no area that specifically states that the government should abdicate its responsibilities in the telecom industry,’’ he added.

Omo-Ettu said that most of the gains enjoyed in the telecom industry were generated by the private sector.

The President of ATCON, Mr Lanre Ajayi, said that investors had more confidence in the democratic system of government, hence their massive investments in Nigeria’s telecom industry.

``This is because the investors realised that if they put their money down, the returns on their investment are quite higher because there is more stability under democracy.

``Under military regimes, another military ruler can come and reverse existing policies but democracy guarantees some level of stability as well as creditability, and investors are more willing to invest in democratic countries.

``These investment funds also facilitate the infrastructural development of the country. In essence, there is a huge correlation between the growth of Nigeria’s telecom industry and democracy,’’ he said.

Ajayi, nonetheless, underscored the need for improvements in the telecommunications industry, particularly in area of high-speed Internet.

He also noted that broadband penetration in Nigeria was unimpressive, insisting that available statistics revealed that it was a mere six per cent at the moment.

Sharing similar sentiments, Chief Deolu Ogunbanjo, the President of the National Association of Telecommunications Subscribers (NATCOMS), said that democracy aided the growth of the telecom industry, adding that the industry was also a blessing to the government.

He particularly noted that the adoption of modern Information and Communications Technology (ICT) had facilitated better communication between the citizens and the government.

Ogunbanjo, however, said that pragmatic efforts should be made to expand broadband penetration in Nigeria.

All the same, Dr Eugene Juwah, the Executive Vice-Chairman of NCC, said that the telecom industry had made giant strides in voice/telephony services.

He noted that telephone lines recorded a phenomenal increase from just 400,000 in 2001 to over 129 million active lines at the moment.

Juwah said that the next focus of the commission was to provoke a broadband revolution in Nigeria, adding that the usefulness of the high-speed Internet in efforts to boost a country’s economy could not be over-emphasised.

He stressed that a World Bank’s study showed that every 10-per-cent increase in broadband penetration brought about a 1.38-per-cent growth in GDP.

He said that the NCC was implementing the ``open-access model’’ in efforts to expand the penetration of broadband services in Nigeria.

From all indications, democracy has fostered the growth of the country’s telecom/ICT industry because of its characteristic feature of policy consistency.

Telecom experts, therefore, call on the Federal Government to initiate pragmatic strategies to expand broadband penetration in the country.

They, however, underscore that need for the government to partner with the private sector in efforts to provide quality, affordable and cost-efficient broadband services for the citizens.

Article Credit: Nanngronline

Updated 4 Years ago
 

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