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NITEL blamed for dearth of landlines as fresh technologies raises hope

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IMAGE: Funmi Onajide, general manager, corporate affairs at MTN Nigeria »


The protracted crisis engulfing the first national carrier, the Nigerian Telecommunications Limited (NITEL), is the fundamental setback responsible for the dearth of fixed line (landline) services, though market observers say the emergence of new technologies in the country seems set to spark-off a huge resurgence.

According to them, landline still remains relevant all over the world because it is much cheaper for the telecoms consumers. It is very reliable in terms of voice, data quality, and not susceptible to bad weather conditions as opposed to other wireless technologies.

The incumbent national operator only managed to deploy less than 500, 000 active fixed telephone lines by mid-2001, and in stark contrast to its counterparts on the continent and the rest of the world, is indicative of the high degree of incompetence, corruption and mismanagement, which plagued the government establishment over the years.

In 2001 and 2003 respectively, the Nigerian Communications Commission (NCC) issued fixed and GSM (Mobile) licenses to South Africa’s MTN and Globacom, the nation’s second national operator. But, little work has been done in terms of deepening coverage as Mobile Network Operators (MNOs) in the country continually shy away from the deployment of fixed line services.

Market observers are of the view that perhaps considering the current market dynamics (multiple taxes, vandalism of equipment, prohibitive Right of Way charges, amongst others) short- term investments on fixed telephony might not be attractive. “The deployment of fixed or wireline services are dependent on the availability of fixed line infrastructure which MTN and most mobile operators do not own or have access to same”, said Funmi Onajide, general manager, corporate affairs at MTN Nigeria.

According to her, unlike what obtains in the United States (US), United Kingdom (UK) and fixed wireline infrastructure had been traditionally built by governments and managed by the incumbent operators such as British Telecom (BT), AT&T etc. “In these countries operators have leveraged on existing fixed infrastructure to provide services. Nigeria unfortunately is far behind on the deployment of fixed infrastructure deployment of which original sat with NITEL”, Onajide said in an interview with BusinessDay yesterday. Industry experts are however hoping that as soon as the federal government completes ongoing privatisation (through Guided Liquidation) of the moribund telecoms company, the successor in tittles to NITEL will be a better position to provide fixed infrastructure for the ultimate benefit of all Nigerians.

These are the not the best times for fixed telephone operators in Nigeria, Africa’s largest economy by GDP, as they lost more than 56 percent of their active lines in the past one year, according to data from the NCC.

The active fixed telephone lines in the country were 172,876 lines as of the end of April. Last year, the number of fixed telephone lines stood at 396,939 lines. This means that within a period of one year, the fixed operators lost 224,063 active lines.

This also shows a decline of 56.45 percent in the number of active fixed telephone lines. According to market observers, the scarcity of fixed telephony in the country is further amplified by the rapid decline in the fortunes of operators that had hitherto offered fixed wireless services.

The telecoms regulator listed some of the fixed operators as inactive.

The operators consist of Starcomms Limited, Reliance Telecomms, Intercellular Nigeria Limited, MTS First Communications, and Disc Communications. Others are WiTEL, O’Net, Rainbownet Limited, Monarch Communications, XS Broadband, Webcom, and of course, NITEL. It is not all gloom and doom as the rising demand for Voice over Internet Protocol (VoIP), especially amongst corporates; Fibre-to-the-Home (FTTH), Internet Protocol Television (IPTV) is driving the resurgence of fixed-line telephony.

Large amounts of high-capacity international bandwidth lying idle on Nigeria’s coastline is sparking off the resurgence of fixed line (wired) telephony as telecommunications companies begin build out requisite infrastructure needed to move internet services across the country. With about 10 terabits per second of international bandwidth capacity sitting on the shores, Ejovi Aror, chief executive officer, ipNX Nigeria Limited, a leading broadband service provider, said, telcos have not been able to move available bandwidth capacity from the shores to the hinterland. “The fixed line infrastructure required to make broadband available in homes, hospitals, schools, which NITEL failed to provide, is gradually been built”, said Aror, in an interview with BusinessDay.

Massive reduction in bandwidth prices has not translated into efficient and affordable broadband services for the consumer, according to him. “This is one of the reasons behind the development of FTTH. We have realised that the cost of bandwidth was not the problem, but taking the capacity directly to the consumers”, he added. ipNX is offering a 10Mbps FTTH symmetrical speed service for just N10, 000 per month. The service is available to residential customers in Lagos, Abuja and Port Harcourt who live in areas covered by the telecoms company’s FoS service. Similarly, business customers will get 15Mbps broadband service for just N15, 000 per month. FTTH is the installation and use of optical fiber from a central point directly to individual buildings such as residences, apartment buildings and businesses to provide unprecedented high-speed Internet access. “There is still a market for fixed-line services in Nigeria in view of the efforts to strengthen the deployment of broadband infrastructure and the emergence of VoIP.

“There are big businesses in the financial services, telecoms, oil and gas industries with huge number of employees scattered across countless branches. Increasingly, these businesses are demanding for cheaper fixed voice telephony to enable employees communicate with their counterparts in other branches effectively,” Vernon Van Rooyen, executive head, network operations, Vodacom Business, told BusinessDay in an interview. According to him, businesses in the country can get access to advanced voice services over the internet at a cost-effective price, adding that this is a new growth area in Nigeria’s competitive telecoms market. VoIP is a methodology and group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks, such as the Internet.

Article Credit: Businessdayonline

Updated 3 Years ago

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Tags:     Nigerian Telecommunications Limited     Nigerian Communications Commission     Mobile Network Operators     Funmi Onajide