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Home > Communications > Telecommunications > General Telecom
Nigeria Telecommunications Report Q2 2008
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Nigeria’s telecoms market continues to evolve at a rapid pace. Following several months in which the
country’s fixed-line incumbent Nitel has continued to see dramatic customer losses, it was announced in
February 2008 that Nigeria’s government had annulled the 2006 sale of Nitel and had started the search
for new investors for the ailing incumbent and its mobile subsidiary M-Tel. The government is
understood to have blamed ‘incessant changes and disagreements between board members and top
management’ at Nitel’s major shareholder Transcorp for the operator's poor results. The decision to
cancel the sale came as the government received new expressions of interest from at least four major
international operators: Telkom and its mobile affiliate Vodacom of South Africa, Orascom Telecom of
Egypt and France Telecom.
Although the eventual sale of Nitel to new investors may take place in 2008, it is unlikely to lead to
immediate investments with potential to reverse the dwindled fortunes of Nitel or M-Tel. In the
meantime, Nigeria’s mobile market will continue to be dominated by M-Tel’s rival GSM operators,
MTN, Globacom and Celtel. Along with M-Tel, these operators added 10.7mn new mobile customers to
the market in 2007, raising the total subscriber base to almost 40mn. In addition to the launch of mobile
virtual network operator (MVNO) services by Etisalat of the United Arab Emirates (UAE) and the
expected launch of commercial 3G services by MTN and Celtel, 2008 will be characterised by the
continued expansion and improvement of mobile network coverage, as part of efforts by the operators to
address the problems that have developed in relation to poor service quality and over-stretched network
capacity. In February 2008, it was reported that Nigeria’s telecoms regulator, the Nigerian
Communications Commission (NCC), had imposed a blanket ban on all four GSM cellcos, preventing
them from putting out adverts to attract new customers. The move followed ongoing complaints about
network quality from customers and allegations that the networks are adding customers faster than the
network expansion could cope with them.
Meanwhile, Nigeria’s fixed-line and internet markets, with their extremely low penetration rates, continue
to attract new sources of investment. In January 2008, it was confirmed that Sudanese incumbent,
Sudatel, had reached an agreement in principle to buy a 70% stake in Nigerian alternative operator
Intercellular. In a separate development, it was reported in November 2007 that Nigerian ISP Monarch
Communications had awarded a contract to Israeli vendor Alvarion for the deployment of a WiMAX
network in three cities. Monarch, which plans to offer WiMAX services to both businesses and private
customers, will join a growing list of operators that are entering the market for WiMAX service
provision. Nigeria sits in first place in our new set of business environment rankings for Africa. The
country benefits from a high score in the Telecoms Market category and a strong rating for the strength
and independence of its regulator.
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