High Marks for Telecoms

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After 56 years of independence, Emma Okonji sampled the views of industry stakeholders who were proud to say that the telecommunications sector has impacted significantly on the Nigerian economy

Before independence, communication was a difficult task to accomplish, as person to person communications was only by telegraphic means, a system in which information is communicated over a wire with a series of electrical current pulses.
After independence, and with the establishment of the Nigeria Telecommunications Limited (NITEL) in 1985, following the separation of postal services from telecommunication services, telecommunications was a little easier but not without some difficulties. People had to queue for hours and days just to make international and sometimes, local calls with the 090 NITEL line.

However, the advent of GSM in 2001, eventually demystified telecommunications, as Nigerians could sit in the comfort of their homes and offices to make instant calls within and outside Nigeria, through their personal hand-held devices called the mobile phones. Banking activities are now transacted on the mobile phones, without the bank customer visiting the banks.

From 2001, Nigeria witnessed quantum growth in telecommunications, as subscription moved from 400,000 lines to several millions of lines within a short period of time. Today telecoms subscription has reached over 150 million active lines, with a teledensity of 107 per cent.
The sector has also contributed immensely to Gross Domestic Product (GDP), contributing over N1.58 trillion as at June 2016.
It is for these and other reasons that stakeholders said they are proud that the sector has impacted lives, businesses and the Nigerian economy, since independence in 1960, despite some teething challenges in service quality.

Telecoms before Independence

During the colonial era, shortly before Nigeria gained her independence from the British government in 1960, communications were by telegraphic means. In 1886, the first telegraphic submarine cable was laid by the British firm, called Cable and Wireless Limited. Through this means, the colonial masters were communicating from Nigeria to Britain and other developed countries.

From 1886 to 1960, Nigeria had 18,724 fixed telephone lines, but between 1960 and 2000, the active subscriber base grew to 400,000 fixed lines, when the country’s estimated population then was 120 million.
The period was characterised by several restrictions to the sector, and particularly by monopolistic approach to telecommunications businesses as was globally dictated then.

Telecoms after independence
Between 1960 and 1990, there was little economic impact from telecommunications activities in the country. From 1991 to 2000, Nigeria witnessed the advent of a few Code Division Multiple Access (CDMA) operators, like Intercellular, MultiLinks, Reltel, Starcomms, Visafone, all of which have gone under, except for Intercellular that bounced back this year, with a new business model and Visafone, that was eventually acquired by MTN Nigeria.

The most eventful period was between 2001 and 2015, when the telecoms sector was liberalised. In 2001, the first set of Global System for Mobile Communication (GSM) operators were licensed. They include Econet Wireless (now Airtel), MTN and NITEL. In 2003, Globacom was licensed and in 2008, Etisalat was licensed, while ntel was licensed in 2014, but rolled out services in 2016.
Following the inability of NITEL to cope with competition from GSM operators, it folded up its operations and was eventually sold to NATCOM in 2014, which currently trades as ntel.

Although the deregulation of the sector began in 1993, when the Nigerian Communications Commission (NCC) was established by Decree 75 of 1992, but the full deregulation was in 2006, after the five years exclusivity period given to telecoms operators by the NCC elapsed. The regulator had to open up the market by licensing more operators and introduced the limited mobility licence to CDMA operators, who were hitherto restricted to fixed land line operations only.

The achievements

Counting the gains of telecommunications from 2001 to 2016, the Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said the industry has significantly impacted on the Nigerian economy in the area of GDP growth, as well as the Nigerian people in the area of lifestyles, job creation and business growth.
He said the progress made by the Nigerian economy since 1960, largely depended on information and communications technology (ICT).

“Governments at all levels and the private sectors, all depend on ICT for their growth and development. This is true because Information and Communications Technology (ICT) has since become the fundamental and most reliable public infrastructure that we have in the country today,” Adebayo said.

“After 56 years of independence, Nigeria has reasons to celebrate because of the contribution of ICT to the Nigerian economy. Since the deregulation of the telecoms industry in 2006, it has been very successful, even when other sectors failed. Although the country has not gotten it right in terms of policy formulation and implementation, but the telecoms sector has enhanced economic growth to a greater extent,” Adebayo added.

The Chief Executive Officer of Teledom Group, Dr. Emmanuel Ekuwem, in his view, said the only bright spot in the Nigerian economy since independence in 1960, is the telecoms sector that has contributed so much to GDP growth, job creation, changing lifestyles and boosting businesses and bank transactions. He said with ICT, the education and health sectors have improved tremendously, as classrooms are becoming smarter and lecturers could deliver lecturers from the city to other cities and remote areas, using broadband technology.

In the area of healthcare delivery, he said doctors can attend to several patients that live in remote parts of the country, without physically meeting the patients.

The President, National Association of Telecoms Subscribers (NATCOMS), Chief Deolu Ogunbanjo, also said Nigeria has reasons to celebrate its 56th independence anniversary because of the contribution of telecoms to the Nigerian economy. He said Nigerians can now communicate easily and do business easily from any part of the country, with the support of their mobile devices.
He said telecoms and ICT is the major sector that has contributed immensely to economic growth of the country, allowing people to do businesses easily and safe, using their mobile phones.

NCC’s position

Speaking from the perspective of his one year in office as the Executive Vice Chairman of NCC, Professor Umar Garba Danbatta, said the achievement of the NCC as the telecoms industry regulator in the last one year, is a testament to the fact that telecommunications has contributed immensely to the Nigerian economy since independence.

Citing the current statistics on telecoms contribution to GDP, as released the National Bureau of Statistics (NBS), Danbatta said telecoms contribution has moved from $18 billion in private sector investments, including Direct Foreign Investment (FDI) in 2009, to $30 billion in 2014, to $32 billion in July 2015, and currently to N1.58 trillion as at June 2016, which represents an increase of 1.0 point, relative to the first quarter in 2016.
Danbatta quoted the NBS as saying “This is the largest contribution to GDP made from the telecoms sector in the rebased period, which emphasises that growth in telecommunications has remained robust when compared to total GDP.”

Danbatta said NCC generated over N47 billion from the sales and renewal of spectrum licences alone in the last one year.
While listing the achievements of NCC through collective efforts in the last one year, in relation to the commission’s 8-Point Agenda, Danbatta said broadband remained the fulcrum on which the commission’s agenda stands. He added that broadband penetration has improved from 10 per cent penetration in 2013 to 14 per cent penetration in 2016. According to him, Nigeria would certainly meet up with the 30 per cent broadband penetration by 2018, as projected by the country’s National Broadband Plan.

He further quoted documents recently released by the International Telecoms Union (ITU) and the United Nations Educational, Scientific and Cultural Organisation (UNESCO), which states that the Nigerian mobile broadband penetration has reached 20.95 per cent.
He said one of the key ingredients for successful implementation of broadband penetration, is the availability of a robust regulatory framework, upon which an appropriate strategy could be based.

The challenges

In spite of the many achievements in the telecoms sector since independence, subscribers are still faced with poor service quality across networks.

Since the rollout of GSM services in 2001, subscribers have been battling with service quality offerings across networks. It is either they are unable to effect calls, unable to recharge their phones or they are burdened with intermittent drop calls and non-delivery of text messages, as well as unsolicited text messages.

To address the challenges, the NCC has come up with several measures, which include the introduction of Key Performance Indicators (KPIs) and fines, as well as ban on telecoms promos, yet the mobile network challenges continue to bite hard on telecoms subscribers across all networks.

In order to address the challenge, Ekuwem called for increased access to ubiquitous broadband across the country, while Ogunbanjo called for increase in the number of Base Transceiver Stations (BTS), otherwise known as base stations. Ogunbanjo said Britain with a population of less than Nigeria’s 170 million people, has over 65,000 base stations, while Nigeria is still struggling to maintain about 20, 000 base stations across the country.

Adebayo, however, called for growth in local content development in the telecoms sector, which he said would boost telecoms growth among small indigenous players.
At 56 years, Nigeria should be able to address its collective challenges, to enable telecoms subscribers enjoy the achievements of the sector since independence.