In this research work, we considered "The Economy impact of the
deregulation of the Telecommunication Industry in Nigeria". Our major
concentration was on the Nigeria market because Telecommunication is a
very broad research topic.
This project has helped us know that deregulating the Telecom sector
has contributed immensely to the Nigeria Economy positively. In order to
get this, we looked at deregulation in the real sense, what
deregulating the telecom sector means and its impact on the economy. A
descriptive method was employed in looking at this topic based on the
usefulness in accomplishing a task.
This findings revealed that the economy has been affected positively
through the deregulation of the telecommunication sector in Nigeria, and
has led to nation. building to a great extent.
By development of Telecom in Nigeria started in 1886 with the laying
of the first telegraphic submarine cable by the British firm cable and
wireless Limited. The Nigerian government joined the British firm as a
senior partner under the name Nigeria External Telecommunication Ltd.
(NET) in 1962.
By 1984/85 Nigeria separated postal and telecom function of party
department, consequently NITEL was crated and telecom services became
commercial. NITEL due to its monopoly network could not meet up with
public expectations and demands and this led to government decision to
partially liberalize Nigeria Telecommunication sector via the
promulgation of the Nigeria communication decree 1992.
However, despite the huge potential offered by the Nigeria telecom
market, the progress was slow. A new policy was released in year 2000
which now serve as the blueprint for full liberalization of the telecom
industry and as at today the market is the biggest and fastest growing
in Africa and the eight fastest growing in the world.
1.1.2 (Pre-Independence Era)
Telecommunications in Nigeria began in 1886 when a cable connection
was established between Lagos and the colonial office in London. By 1893
government offices in Lagos were provided with telephone service which
was later extended to Ilorin and Jebba in the hinterland. A slow but
steady process of development in the years that followed to the gradual
formation of the nucleus of a national telecommunication network.
In 1923, the first commercial trunk telephone service between Itu and
Calabar was established. Between 1946and 1952, a three channel line
carrier system was commission between Lagos and Ibadan, and later was
extended to Osogbo, Kaduna, Kano, Benin and Enugu; thus connecting the
colonial office in London with Lagos and the commercial centres in the
country with Local authority offices.
The main transmission medium during the pre-independence era was
unshielded twisted pair. This evolved later from rural carrier systems
on high gauge lines to line carrier systems of twelve channel capacity
systems. Salloto medium-capacity systems employing VHF and UHF radio
were introduced around 1955. The first serious attempt at planning
telecommunications services in the country was the 1955-1962 development
It provided for the expansion of the trunk using a VHF multichannel
radio system on a nationwide basis and a short microwave link between
Lagos and Ibadan.
1.1.3 Post colonial Era
Nigeria embarked on a periodic national development plan with the attainment of independence in 1960.
Telecommunication development was featured in each of these plans which were usually of a five year duration.
The focus of attention in this period was the expansion of the
network to meet the needs of the fledging commercial and industrial.
The specific objectives includes:-
- Instal1ation of additional 60,000 telephone lines to bring
the total number of lines to 90,000 by the end of the decade.
- Expansion of trunk dialing facilities to link the major
urban centres that were then springing centres that were then springing
up. Establishment of the Nigeria External telecommunications (NET)
Unfortunately, only 26,000 lines i.e 40% could be added to the
existing network partly because of under funding and partly because of
disruption caused to the economy by the Nigerian Civil War (1967-1970).
Nevertheless, there are some achievement which inc1udes:-
Installation of a microwave radio transmission system to link the
cities of Lagos, Ibadan, Enugu, Benin and Port Harcourt all of which are
in the southern part of Nigeria's transmission system. Preparatory work
toward the establishment of NET as a limited liability company also
1.1.4 Plan Period
It aimed at increasing the telephone facilities from 50,000 lines to
750,000 lines an increase of about 1,400%. In the area of switching,
three contracts were awarded to add over 340,000 lines to Nigeria's
- In the first contract for the contingency loan - forty five
locations were to receive exchanges with a total installation capacity
of 162,000 lines and twelve other exchange were to be expanded by 48,000
- The second covered turnkey projects 147 locations to
receive external line plant and switching equipment to add an additional
- The third contract covered mobile exchange provided for installation of29 mobile exchange with 11,300 lines.
It was envisages .that the total number of installed telephone lines
in Nigeria at the end of the plan period would increase to 612,000.
During this period, the telecommunication arm of the Department of
Posts and Telecommunications was merged with the Nigerian External
Telecommunications Ltd. (NITEL) a limited liability company that today
administers both Internal and External telecommunications services in
1.1.5 The Present
Nigeria is widely recognized as one of the major markets for
telecommunications business opportunities in the world with a population
of over 140 million. Since the democratic governance of the world had
turned to Nigeria as the country with the highest potential. Nigeria has
continued to attract the attention of serious local and foreign
Though some companies were given licenses to operate before 1999,
full market liberalization only commenced in earnest with government
enacting a new telecom. Policy document in September 2000, produced
after full stakeholder consultations. The telecommunication was finally
deregulated in 2001 and this change the story of the sector. Unlike the
days when it was just NITEL that people will have to wait for so many
years to get their lines fixed after paying huge amount of money , and
so many does have that privilege and so will have to go to call thereby
waiting for ages because of the long queue.
In 2003 a new law was enacted to boost investors confidence and
provide clear rules of engagement for industry stakeholders. Private
investment in the sector has grown from about 150m in 1999 to over $25
billion by 2010 with commensurate rapid growth in subscriber lines. The
nations teledensity stands at about 65% with about 89 million connected
lines by end of 2010.
In fact by year 2000, Nigeria had only 400,000 connected telephone
line and 25,000 analogue mobile lines. The total teledensity stood at a
paltry 0.4 lines per 100 inhabitants. Between 1960 and 2000 the number
of connected lines grew at an average of 10,000 lines per annum but
since 2001 it has witnessed an average growth rate of over 10 million
lines per annum. Bye end of 2010 Nigeria had attained over 80 million
lines and the teledensity figures soared from 0.4lines per 100
inhabitants recorded in 1999to 65 lines per 100 inhabitants by the end
1.2 STATEMENT OF PROBLEM.
Given the magnitude of economic problems which confronted Nigeria.
Since the early 1980s Stagnant growth rising inflation, unemployment,
food shortages and mounding external debts, The economic reforms became
paramount and telecommunication sector was equally reform to enhance a
better communication system.
For many years it was an exclusive preserve of the government.
The sole operation was the government monopoly NITEL. As at January
2001 only 400,000 functional lines was on ground and more than half
resided in the government offices and corporation, only a few of
Nigerians had access to their own telephones.
The customers service was poor and subscribers waited for years to
get phones installed after paying a high fee of about 150,000 and more
long queues were common at public payphone boots, getting a dialing tone
on phone was often impossible for hours especially during the peak
hours, As Telecommunication improves business processes becomes more
efficient and productive.
1.3 RESEARCH QUESTIONS.
Considering the projects topic. The economy impact of the
deregulation of the telecommunication industry in Nigeria, solutions
will be proffered to the following problems:-
1) Why do government deregulate the telecommunication industry in Nigeria?
2) What are the importance of deregulation to telecommunication industry?
3) What are the effects of deregulation on the growth of telecommunication industry in Nigeria.?
4) What benefit do governments derive from the growth of telecommunication industry?
1.4 OBJECTIVES OF THE STUDY
For every Endeavour of man on earth there are some objectives of this study include the following.
1) To trace the History of telecommunication in Nigeria.
2) To examine the effect of past government monopoly policy on telecommunication industry in Nigeria.
3) To enumerate measures of deregulation in the telecommunication industry.
4) To identify and examine the effect of deregulation on the growth of telecommunication industry in Nigeria.
5) To identify the challenges facing telecommunication industry in Nigeria.
1.5 SIGNIFICANCE OF STUDY
There are numerous benefits that could be gained from this study but I
will enumerates two major significance which are academic importance
and government Economic importance.
- Academic importance: This piece of research work will be of
immense benefit to students aiming at working on this aspect of the
economy because they will be able to make use of the information
-- Government / Economic importance. If government can adhere and
stick to. various facts which are generated through this research work,
it will help in economic policy formulation of the country.
Ho...The telecommunication industries have not been positively affected by deregulation.
Hi…The telecommunication industries have been positively affected by deregulation.
Primary data will be used to get enough information which will be
relevant to the study and this 'will be done through the use of
questionnaire. In light of this, percentage method will used to test the
validity of this research work.