JOHANNESBURG, South Africa-Nigeria has the potential of more than 5 million wireless subscribers and shows all the signs of becoming another wireless phenomenon in Africa.
Looking at hard facts, this does not seem feasible. With a population of 100 million people, the country has only 700,000 conventional telephone lines, representing a teledensity of 0.4 percent-one of the lowest in the world. To date, more than 30 licenses for cellular deployment have been issued in Nigeria, but few of the companies have had the financial backing to roll out their networks.
In the past, due to risk associated with doing business in Nigeria, local licensed operators were unable to attract either funding or international expertise. As a result, many networks never surfaced, and the licenses of most have expired.
The government does not issue tenders for new networks, nor does it carry out feasibility studies. The regulatory authority, Nigeria Communications Commission (NCC), awards licenses. In the case of wireless licenses, the Ministry of Telecommunications controls spectrum allocation.
The only substantial cellular system in Nigeria is an analog TACS system operated by M-Tel, the operating mobile subsidiary of government-owned operator Nitel. In addition, cellular service is only available in the major metropolitan area of Lagos.
There has been some talk about privatizing Nitel and appointing a second national operator.
A handful of small wireless local loop (WLL) operators have emerged on the basic telephony side after receiving licenses in 1995. The WLL operators received licenses to offer basic telephony services throughout the territory and signed interconnection agreements with Nitel. Rather than operating against Nitel, the operators chose to offer services alongside the parastatal.
One local company, Intercellular, announced on 15 July 1998 that it had become the first private operator authorized by the government to provide both mobile and fixed telephone services in the country. It currently operates a very limited CDMA wireless network in Lagos, with no more than a few thousand customers.
But all of this is about to change.
Realizing the huge potential of the Nigerian cellular market and spurred by the liberalization and privatization of the telecommunications sector, several operators are aiming to launch GSM 900 systems by the first quarter of next year.
Three have been negotiating to achieve this for the past few years, but with little success. The operators are Integrated Mobile Services (IMS) and Motophone, both backed by Ericsson, as well as Alcatel-backed Communication Investments.
IMS is working with a yet-to-be named international operator, which apparently has extensive experience in GSM network operations.
In addition, fueled on by the competitive spirit that has been rekindled in Nigeria, 21st Century Technologies, owned by a group of local investors, is aiming to roll out a CDMA 800 system, initially planning to attract 325,000 subscribers in the centers of Lagos, Part Harcourt and Kaduna. The operator was planning to offer Internet and pay phone facilities by June, VSAT services, as well as WLL in September, using a Qualcomm CDMA switch.
