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Viewing cable 02ABUJA461, NIGERIAN TELECOMMUNICATIONS SECTOR INDICATORS
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 02ABUJA461 | 2002-02-08 16:07 | 2011-08-25 00:00 | UNCLASSIFIED | Embassy Abuja |
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 04 ABUJA 000461
SIPDIS
E.O. 12958: N/A
TAGS: ECON ECPS ETRD NI
SUBJECT: NIGERIAN TELECOMMUNICATIONS SECTOR INDICATORS
REF: 01 STATE 197204
¶1. Market statistics: By most accounts, Nigeria's telecom
sector witnessed significant growth in 2001, but accurate
statistics are difficult to obtain. Although information
regarding telecom companies and government agencies
participating in the sector is current, data on growth trends
is available up to 2000 only.
¶A. Size of telecom service market: Annual revenue from the
telecom sector is estimated to be over USD 10 million.
Analysts place the current value of telecom and
telecom-related investments in Nigeria at roughly USD 3
billion, not including the recent sale of NITEL, the
state-owned telecom monopoly, which was sold to a consortium
of international and domestic investors for USD 1.3 billion
in November 2001 (but is yet to be paid for). During 2001,
over half of the USD 3 billion was derived just from the two
General System of Mobile communications (GSM) operators: MTN
and Econet Wireless. Each licensee paid USD 285 million for
their license. MTN claims to have invested USD 350 million
so far and plans to spend another USD 600 million during
2002-2006.
¶B. Size of telecom equipment market: Accurate estimates of
the value of telecom equipment are unavailable. However,
observers estimate the current market to be around USD 1.2
billion. Wireless equipment makes up over 60 percent of this
level. Several reasons exist for the tilt towards wireless:
Nigeria's size and topography, the dearth of hardwire
infrastructure, and favorable policies encouraging wireless
communications. U.S. company Motorola currently supplies
wireless equipment to a Lagos-based distributor. Other major
equipment providers include Ericsson, Alcatel and Siemens.
¶C. Number of access lines and teledensity: According to the
national telecom regulator, in 2000, the number of fixed
lines was 558,393 with a teledensity of over four lines per
1,000 inhabitants (Note: using the estimated population
figure of 120 million). Nigeria's suppressed demand is
significant. Only 30,000 analogue lines have been added
during the last ten years.
¶D. Number of mobile subscribers: With only 35,000 subscribers
at year-end 2000, mobile phone subscriptions skyrocketed to
over 300,000 by December 2001. Teledensity is currently
doubling every four months. Backbone and switching capacity
is insufficient to support this demand.
¶E. Number of internet subscribers: Current data is not
available, although 2000 figures estimate the number of
internet subscribers at 10,647. Speed and reliability are
poor and costs are high.
¶F. Current population: 120 million (estimate projected from
1991 census)
¶2. Current Operators
¶A. Wireline incumbent: Nigerian Telecommunications Ltd.
(NITEL) is the only hardwire operator in Nigeria.
a. Percentage of government ownership: NITEL is the only
company, in which the federal government holds an interest.
Federal government shares in the company stood at 49% at
year-end 2001. The remaining 51% shares were auctioned to
Investment International (London) Ltd. (IIL) for USD 1.317
billion. All other operating companies are 100 percent
privately owned.
b. Current efforts/future plans to privatize: Controlling
interests in NITEL, the state-owned telecom monopoly, was
sold to an international consortium for USD 1.317 billion in
November 2001. Final completion of NITEL's sale is
anticipated on February 12, 2002 when IIL's full payment is
due. The GON plans to eventually divest all its shares of
NITEL. Licensing for a second national carrier is already in
process.
c. Terms/scope of operations: At present, NITEL retains
monopoly control of the international gateway (voice) and
will do so until a second national carrier enters the market.
Private telephone operators (PTOs) must obtain an
inter-connectivity agreement with NITEL prior to operating
and an operating license from the Nigerian Communications
Commission (NCC).
¶B. Internet
a. Number of ISPs: About 160 ISP internet service providers
have been licensed by the NCC as of December 2001. However,
just 21 are currently operating. Demand for access to ISPs
greatly outstrips ISP capacity. Access fees are high and
service is frequently disrupted. The major constraints on
increased internet availability include severely limited and
corrupted telephone lines and highly unreliable power supply.
b. Availability in secondary cities: ISPs are only present in
the major cities of Nigeria, such as Lagos, Abuja, Kano, Port
Harcourt, Kaduna, Ibadan and Enugu.
c. Number and growth trends for cyber-cafes: According to
end-2002 ISP data, approximately 1,500 cyber-cafes operate in
Nigeria. Neighborhood private phone cabins (business
centers- as they are called in Nigeria) are frequently
equipped with computers for internet access.
d. Total national bandwidth: 2mb/s (year 2000 statistics).
e. Number of international data providers:
f. IP telephony: Internet Protocol telephony is used,
although no official regulatory policy exists on Voice Over
Internet Protocol, the privately managed IP network.
f. Other wireline operators: NITEL remains the only operator
at present.
¶C. Wireless Operators
a. Mobile/cellular: Three companies are currently operating
GSM mobile telecom services:
-- Econet Wireless Nigeria Ltd. A joint venture between
Econet Wireless of Zimbabwe, which holds 60 percent of the
shares, and the Lagos, Akwa-Ibom, and Delta State
governments, First Bank PLC, Bromley Investments, Ocean and
Oil, and various Nigerian individuals (40 percent).
-- MTN Nigeria Ltd. MTN South Africa holds 76.8% with the
remaining 23.2% held by various Nigerian individuals.
-- NITEL, the national carrier, currently operates analogue
lines through its subsidiary M-Tel. In January 2001, NITEL
received a GSM license. The newly-privatized company
anticipates rollout will occur in the first quarter 2002.
About a dozen fixed wireless companies including
Intercellular Nigeria Ltd., Multilinks, Reliance Telecom,
Cell Communications, Starcom, Mobitel, and VGC
Telecommunications, have been established during the last
four years.
b. Satellite: Nigeria is a signatory to Immarsat, Intelsat,
Rascom, Thuryaya, Eutelsat and Panasat. Ten commercial
enterprises such as Telnet Resourcery Ltd., Teledom, and
Bacomm presently operate VSAT services for banks, oil
companies, and some other multi-national firms. VSAT is not
currently available for individuals.
c. Internet access service: Four companies, Panafrican
Communications Network (PACONET), BT Nigeria Ltd., Bacomm,
and Warsun Network, provide backbone support for another
seventeen operating ISPs. Apart from the cyber cafes in
Nigeria's major cities that have direct ISP access, others
must dial-up to their ISPs located primarily in Lagos for
access, often necessitating high cost, long distance trunk
calls.
d. Other Notable Players: The telecom sector contains
literally hundreds of small and medium-size companies
operating at all marketing levels.
e. Wireless technology in use: NITEL/M-Tel uses primarily
analogue networks, although it is currently testing 1,000
digital mobile lines in Abuja. MTN and Econet both utilize
GSM digital networks.
¶D. Telecom Equipment Manufacturers
a. Domestic Producers: No telecom equipment manufacturers
currently operate in Nigeria.
b. Types of equipment for which there is a greater need: As
part of the NITEL purchase agreement, Investors International
Limited (IIL) will be required to increase the number of
fixed lines by 1.5 million and the number of wireless lines
by 1.5 million within five years. To accomplish this goal,
much equipment will be needed to lay fiber-optic cable,
provide wireline and wireless phones and erect cellular
transmission towers.
¶3. Government
¶A. The Federal Ministry of Communications oversees telecom
issues.
Minister of Communications:
Dr. Mohammed Bello
Federal Ministry of Communications
Abuja, FCT
Tel: 234 09 523-7183
Fax: 234 09 523-7249
¶B. Host government's announced/ongoing plans for developing
the telecom/IT sector: The government is finalizing the sale
of NITEL to Investors International Limited (IIL) consortium.
The sale should be complete by February 12, 2002. The sale
agreement mandates a significant expansion of fixed and
wireless telephone services. Continued liberalization of
this sector has led to an increase in the number of private
fixed telephone operators.
¶C. Current government policies promoting/hindering the
development of the telecom sector: Current government policy
supports the development of the private-sector
telecommunications market, as evidenced by the recent sale of
the government-controlling interest in NITEL.
¶4. Legal/ regulatory framework
¶A. National telecom law: Decree No. 75 of 1992 established
the Nigerian Communications Commission (NCC) as the regulator
of the telecom sector. Draft telecommunications legislation
is currently under review in the National Assembly. The new
law will provide for a more independent and stronger
regulatory role.
¶B. Telecom regulatory authority: The Nigerian Communications
Commission (NCC).
a. Name and contact information:
Alhaji Ahmed Joda
Chairman, Board of Directors
Nigerian Communications Commission
Benue Plaza, plot 72 Ahmadu Bello Way
Central District Area
PMB 326, Abuja, Nigeria.
Tel: 234 09 234-0330
Fax: 234 09 234-4593
234 09 234-4589
Http: www.ncc.gov.ng
Mr. Ernest Ndukwe
Executive Vice Chairman/CEO
Nigerian Communications Commission
Tel: 234 09 234-4590
Fax: 234 09 234-4593
b. Is the regulator still part of the ministry: No, the NCC
is an independent regulatory body, though the Ministry of
Communications monitors the implementation of government
policy.
c. Main functions of the regulator: The NCC is responsible
for licensing, assigning and registering frequency;
administering the national phone numbering plan; facilitating
private sector participation and investment; promoting and
enforcing a fair competitive environment; regulating tariffs;
defining standards for economic regulation of dominant
operators; and establishing mechanisms for promoting
universal access to telecom services.
d. General view of current regulator with respect to its
independence: NCC is generally perceived as operating
independently of political pressure. However, NCC's handling
of the early 2001 GSM licensing round generated some
controversy. One of the winning bidders, Communications
Investment Limited (CIL), lost its license (and USD 20
million deposit) when NCC strictly applied bid payment rules.
Some perceived the NCC action as excessively rigid, others
as a sign of true transparency in the process, particularly
since CIL was a Nigerian corporation.
¶5. Telecom Commercial Environment
¶A. Current restrictions on foreign investment and commercial
presence: There are no restrictions on foreign investment in
telecommunications.
¶B. U.S. firms interested/active in the sector: Motorola,
Cisco, Qualcomm, Networking Services, Digital Networks, and
Harris Corporation.
¶C. Key problems U.S. telecom firms confront in pursuing
commercial opportunities: Lack of local presence can be a
major hindrance for U.S. companies exploring business
opportunities in Nigeria. The overall lack of transparency
in government contracting also poses an obstacle to U.S.
firms.
¶D. Upcoming telecom commercial opportunities for U.S. firms:
-- E-week, February 11-14, 2002, Lagos.
-- Computers, Telecommunications and Office Equipment (CTO),
May 13-18, 2002, Lagos.
-- Nigeria Communications (NICOMM) 2002, October-November
2002, Lagos.
¶E. Interconnection rates: NITEL's call rates are currently
USD 0.86 and USD 0.06 per minute for international and local
calls respectively. Mobile rates for the newly introduced
GSM network is a flat USD 0.04 per minute.
¶F. Telecom trade associations:
Association of Telecommunications Professionals of Nigeria
(ATCON.)
Contact: Charles Joseph, President
Plot 213 Muri Okunola Street
Off Ajose Adeogun Street
Victoria Island
Lagos
Tel: 234-1-262-2453; 320-1001; 264-5152
Website: www.atcononline.org
¶G. Other useful websites:
U.S. Foreign Commercial Service
Contact: Miguel Pardo de Zela
U.S. Consulate General
2 Walter Carrington Crescent
Victoria Island, Lagos
Tel: 234-1-261-0241, ext. 380
Fax: 234-1-261-9856
Email: miguel.pardo.de.zela@mail.doc.gov
Jeter