Monday, August 1, 2011

Appraisal of a Decade of GSM Revolution in Nigeria

It is ten years since Nigerian Telecommunication Commission (NCC) introduced Global System for Mobile Communications (GSM) in Nigeria. The licence auction had taken place from January 17 – 19, 2011 while Econet Wireless Nigeria (now Airtel) was the first to roll out on August 7, 2001. Before the licensing of GSM, in November 1997 Code Division Multiple Access (CDMA) telephone device had become operational in Nigeria. According to industry source, while CDMA operators focus on fixed wired access (landlines) and the fixed wireless access (mobile) that gives them limited mobility access, the GSM operators focus purely on mobile communication, which gives them unlimited mobile access.

Before the advent of these two dominant telephone operators, Nigerian Telecommunications, NITEL had been the monopoly providing telephone service in Nigeria. Many would remember how NITEL poles and cables were rivalling those of National Electric Power Authority (now PHCN) on our major streets. During the long reign of NITEL, telephone was a status symbol, exclusive reserve of the rich and mighty. Later, public phone booths were erected across major cities, particularly on the premises of Post offices, school campuses and other public buildings to serve the interest of the masses who could not afford NITEL’s fixed lines in their homes. Then, when Nigerians still use coins, the technology is that a caller will slot coin(s) into the phone box and dial to communicate. There was also the era of Thuraya and 090 Cellular. All of that has become history.

With the benefit of hindsight, I wonder how we managed to live without phones in those years before the advent of GSM and internet. Those years when communication is mostly restricted to letter writing through the largely inefficient and ineffective Nigerian Postal Services (NIPOST). Decades of making needless and sometimes fruitless journeys when one could have simply communicated the essence of the trip on phone and save time, energy, money and lives lost to accidents on such avoidable journeys.

The coming into operations of Global System for Mobile Communications has made life and living beautiful, easy, colourful, exciting and tenderly. Now you can rule your world with the deployment of latest technology in the field of information, communication technology. There is no need for frequent visit to family and friends as you can daily converse with them everywhere they are on planet earth. Apart from telephone calls, short-messaging system (SMS otherwise known as text messaging) and multimedia services (MMS) which are provided by GSM operators; many of the players in the telecom sector also provide internet services through modems and subscription platforms. This has significantly reduced the need to go to cybercafé to enjoy internet services, thus enhancing customer privacy.

GSM revolution goes beyond the aforementioned services. What about the value chain? Today, there are hundreds of thousands of Nigerians nationwide selling mobile handsets and accessories such as batteries, chargers, earpieces, memory cards, etc. Some are into sales and repair of handsets, music downloads to mobile phones, unlocking of handsets et cetera. Many others simply set up call centres where they also vend recharge cards. There are likewise companies manufacturing handsets and other accessories as well as those who are into production of recharge cards and telecom masts all being part of the value chain.

Mention must also be made of those companies who are supplying generators to power the telecommunication masts, those supplying the diesels to the power generating sets, those providing security at the offices and base stations of the telecom companies as well as the regulatory agency, NCC. What about the $285million and $400million that each of the telecom companies paid as licensing fees in 2001 and 2007 as well as the tax they pay annually to the coffers of both the federal and state governments? There are also sponsorship deals some of them have with different sporting federations and Nigerian artistes. A couple of them have correspondingly set up foundations through which they support education and do other charities as part of their corporate social responsibilities. All these and more are many of the benefits of the GSM revolution in Nigeria.

According to The News magazine of March 7, 2011 “The huge volume of business that the telecoms sector is driving in the Nigerian economy has become more manifest in recent years. This year, the sector’s contribution to the country’s gross domestic product, GDP, is expected to exceed the combined inputs of the manufacturing, banking, insurance and solid minerals sectors, according to estimates by the Federal Ministry of Finance. The telecom sector’s contribution this year, computed with Nigeria’s gross domestic product figures put at $206.66bn by the International Monetary Fund, IMF, is estimated at $15.7bn, amounting to 7.6 percent of the GDP. Finance and Insurance, manufacturing and solid minerals are put at 2.5, 4.5 and 0.4 percent in that order, totalling 7.4 per cent, which is 0.2 per cent less than the 7.6 percent estimates for the telecoms sector. Since 2005 (four years after it was liberalised), the telecoms sector remains the third largest contributor to the country’s GDP in the non-oil sector, after agriculture and trade.” “According to the Nigerian Communications Commission, NCC, estimates, active telephone subscribers in the country are now nearing the 90 million mark, while a teledensity of 63 percent currently obtains. GSM subscribers are estimated to have the lion’s share of 81,195,684, while subscribers to CDMA and Fixed Wireless services had 6,102,105 and 1,050,237 respectively.”

Among the many drawbacks of the GSM revolution in Nigeria is the poor services of the operators and the weakness of the regulators to enforce quality compliance. When GSM services started in 2001, the cost of handset and call rate was very prohibitive. Competition has however forced down the price. Despite the claims of cutting edge technology, there is still high level of drop calls and network failures. None of the operators can lay claim to have effectively covered the country. There are still several places even in major towns and cities where network signals of some of the operators are very weak or non-existent and as such customers have to subscribe to more than one network when they could have made do with one. Many thus have to carry multiple mobile-phones. Although, this problem has been lessened by the emergence of dual-SIM handsets.

There is a raging debate on health hazards associated with mobile phones. While some said GSM handsets can cause brain tumour or cancer, others are disproving it. The use of mobile phones in aeroplanes, hospital theatres, and fuel stations is prohibited as it could cause damage to sensitive equipment or engender fire outbreak. Kidnappers and armed robbers have also found it very useful for their nefarious acts hence the NCC policy of compulsory registration of SIMs and biometric data of all GSM subscribers in Nigeria. There are also allegations of fraudulent promos and bonanzas against some of the operators while making or receiving calls whilst driving had caused many preventable accidents. There is also the serious ethical issue of phone hacking or bugging by unauthorised people as exemplified by the current controversy stirred in the UK by News of the World newspaper as well as the accessing and publication of call logs by some politicians in order to prove allegation of compromise against some election tribunal judges. In spite of the little heartache the arrival of GSM revolution has brought on Nigerians, it is still one of the most visible dividends of democracy the country is enjoying.