As Nigeria Celebrates Seven Years of GSM

This month of August marks seven years since the country began the liberalization of telecommunications industry through adoption of Global System for Mobile communications (GSM) technology.

The Nigerian telecommunications industry has experienced significant growth in the last seven years, following the successful take-off of the digital mobile telephone services, using GSM technology. From less than 500,000 active fixed telephone lines as at mid 2001, to a population of over 120 million, the total number of connected fixed and mobile telephone lines increased to about 53 million both active and inactive lines this June.

However the entrance of the GSM technology has brought about such a revolutionary transformation that millions of Nigerians with no access to telecommunications now clutch mobile phones in their millions. It is a common sight these days to see traders, fish sellers, hawkers, motorcycle riders among others using mobile phones. The staggering number of subscribers on the three major GSM networks of MTN, Globacom and Zain as Nigeria celebrates 7 years of operations, is a testimony to the hunger of Nigerians for communications.

It is clear that Nigeria cannot celebrate the advances recorded in the communications sphere without acknowledging the contributions of Ernest Ndukwe, the executive vice chairman of the Nigerian Communications Commission (NCC). Ndukwe has over the years emerged as the face of GSM in Nigeria through his transparent handling of the regulatory affairs of the telecoms sector.

Since February of 2001 when he supervised the auctioning of GSM licences in the country, he has conducted the affairs of the regulatory functions of the commission in such a way that other countries in Africa now come to Nigeria to understudy the regulatory processes that has seen the sector emerge as the largest and fastest growing in Africa and the 3rd fastest growing in the world.

Several research firms across the globe have commended the Nigerian government and Ndukwe, one of the most sought-after telecom resource persons in the telecommunications industry in Africa for an effective transparent and foreign investment attracting regimes in the continent. In spite of the recent downturn in the quality of service dished out by operators characterized by drop calls, undelivered text messages, Ndukwe’s starling qualities as a regulator of note is still intact.

However, beyond the celebration of seven years of GSM, the NCC had taken several measures to tackle the issues of quality of service. One of the ways the NCC has shown that it was serious in tackling issues of quality of service was in the area of the enforcing its regulatory powers to stop operators from further promos that has been a major cause of network congestion witnessed in recent times. By this action the NCC sent a message that no operator is above the law and that they must conform to measures that will save the sector from further deterioration due to their poor service delivery. The commission has also procured equipments that will enable it monitor congestion and service quality of the various networks in the country.

It also ensured that operators paid their subscribers N175 compensation for poor quality of service experienced in January this year, even as some operators protested by taking the commission to court. It stood its ground and made this happened.

Benefits

In the last seven years, since the GSM revolution hit the nation, a lot of benefits have been enjoyed by the Nigerian subscriber who was hitherto at the mercy of the almost nonexistent epileptic services rendered by the Nigerian Telecommunications Nitel. Since then, the monopoly of non effective service rendered by Nitel has been broken and communication across regions enhanced by GSM thus encouraging the socio economic growth of the nation, enhancing business and social relationships. The fact is that effective communication is crucial and cannot be overemphasized. With a teledensity presently below 35 % and a subscriber base of 53 million as at the end of June, one could say that a feat has been achieved by the GSM revolution in connecting Nigerians to a critical service given the fact that before the advent of GSM, teledensity was less than 4% and only about five hundred thousand Nigerians had access to telephony services in a nation of over a hundred million people.

Then having a telephone was a class thing and only the rich could afford the luxury and the muscle to withstand the stress of Nitel technicians who used to hold subscribers to ransom at every little opportunity. Then it was a common sight to see the technicians asking for ladder and cables and all sorts to fix a line anytime a problem arises, it was indeed a nightmare. One could easily recall the stress of keeping vigil at the offices of Nitel in a bid to make calls and be confronted with the common problem of no tone come back tomorrow and so on. But thanks to President Obasanjo and the coming of GSM all that is now history.

The GSM revolution in the country has indeed contributed over 80 percent of $12 billion private investment in the sector as well as account for $10 billion foreign direct investment. It has also stimulated local investment and increased job opportunities. It is a common scene in urban areas of young men and women sitting under an umbrella provided for them by GSM operators making calls for people at token. This umbrella call centre initiative is today providing food to greater percentage of unemployed Nigerians, aside this are others who are trading in recharge cards and other products of GSM operators.

The benefit of GSM technology is enormous and still increasing as it gets expanded, we may not easily forget that Nigerians are now turning GSM engineers, these are our young countrymen and women who eke their living through repair of mobile handsets. The popular Otigba computer village is no longer computer village in its sense as the sale of mobile handset has almost taken over business at the market.

The revolution has also indirectly stimulated development and vibrancy of some sectors of the economy, such sectors are leveraging on the technology deployed by GSM operators to provide services to their customers, A case in point is the banking sector, where banks are offering mobile banking which give customer the opportunity to monitor and carry out transactions on the move through their mobile phones. Most Automated Teller Machines (ATM) deployed by banks is working with the help of GSM General Package Radio Service (GPRS) deployed by operators.

There has been an increased turnover for advertising and marking communications services basically because of the GSM operators that uses the channel often times to reach their subscribers as campaign for more subscribers.

Challenges

In spite of the benefits Nigerians are enjoying from the advent of GSM technology, the operators are not finding it a world of roses in rendering services. The much talked about poor quality of service is a function of weak infrastructure base, operators have been powering their equipment with generators which are not the case in most environment. This is attributed to inefficient public power system. Nigeria CommunicationsWeek investigations reveal that the three major operators in this space, MTN, Glomobile and Zain are powering their over 14,000 base transceiver stations with 28,000 generators. They are also providing security for their equipment which has not deterred unscrupulous Nigerians from stealing these generators and diesel. At last count in December last year Zain, Glomobile and MTN lost a total of 290 generators and over a million litres of diesel, this is indeed a huge lost to bear by operators.

There is also the problem of area boys. One of the operators has had to shutdown one of its sites in Lagos due to incessant demand of huge settlements by Area Boys. In the Niger-Delta area, one of the operators reported that over 30 of its sites have become inaccessible due to militant youths, who have refused them to refuel or maintain the sites except they parted with huge sums of money. It is unfair on the GSM operators, who unlike the oil companies are not taking any natural resource but building telecommunications infrastructure around the country.

Operators are also face with multiple taxation imposed on their equipment by different tiers of government, Abuja capital development authority had impose N3 million annual fee on each base station in the metropolis. More so, Association of Licensed Telecommunications Operators of Nigeria (Alton), the umbrella body of the telecom operators, are in court with Lagos state government over the later imposition of N500,000 fee per base station in the state.

The regulatory body also needs to ensure that competition is enshrined in all market segment of the sector as well as maintain favourable regulatory and investment climate, required for the protection of consumers. This is necessary in view of anti competitive behavour of some GSM operators.

The next phase of the Telecommunications growth will come from the rural areas. With a paltry 40 percent of the country being covered with telecommunications services, it is obvious that a huge gap needs to be tapped and already the focus for now by stakeholders and investors is on the rural area and how ICT services can be deployed to the rural communities. Investors are falling over themselves to come to Nigeria and do business mostly as a result of the fact that in spite of the infrastructural problems posed by lack of power, roads among other, Nigeria has a high return on investments rate. It is a fertile ground for any investor to recoup their investments, because of its population. Before now, the country has witnessed higher investments in the urban areas as opposed to lower investments in the rural areas by telecoms operators. In order to bridge this gap, telecommunications and internet services need to be deployed to the rural areas.

The NCC under Ndukwe should not relent in its efforts of playing its regulatory functions in an effective manner. Nigeria has a lot to gain and cannot afford to loose sight of the fact that an effective regulatory environment has to a large extent helped in steering the ship of the nation’s telecoms revolution.

As Nigeria celebrate this seventh year of Global System for Mobile communications (GSM), subscribers await the introduction of number portability which is believed will in no small measure help in address the quality of service issues.

NCC need to be commended for rising up to the challenges of regulation, especially with SIM registration, call centre initiative, consumer parliament and its current effort at ensuring that physically challenged group in the society are fairly treated by operators.