The Telecommunication Industry in Nigeria

The Telecommunication Industry In Nigeria

The Players

Without doubt, August 2001 represents a milestone in the history of telecommunications in Nigeria.

Prior to that date, which marks the commencement of GSM mobile telephone services, and the pursuant liberalization of the industry, the state-owned Nitel was a monopoly that did everything possible to stifle growth and development in the sector.

In 40 years of operation, the utility was only able to account for approximately 450,000 telephone lines, nearly all of them fixed landlines, servicing a population that is the largest in Africa, estimated at 120 million people. It was one of the lowest connectivity rates in the world.

The potentials of the market had long been recognized by investors as huge and only begging to be tapped despite glaring deficiencies in backbone infrastructure.

South Africa's MTN and Zimbabwe's Econet were first off the block, recording what is regarded as the fastest take-offs in the history of GSM operation. Nitel's Mtel continues to wobble in the face of better-organized, better-funded competition, and is still bogged down by bureaucracy.

At that point MTN and Econet operated a virtual duopoly and tacitly collaborated in what was largely regarded as an exploitative regime of product offerings and call rates. Not faced with an alternative, Nigerians continued to subscribe overwhelmingly, even as they groaned under the weight of high call rates and inflexible product packages. In less than two years, the two networks had grown their subscriber base beyond 2 million, even more than they had capacity to handle.

This was the scenario when Glo Mobile arrived as the only indigenous, non-government operator. Glo Mobile caused a huge stir in the sector