Leadership (Abuja)
13 January 2009
opinion
The year 2008 no doubt, was one of action in many respects and at other times, unfolded as one that could be associated with a verdict of poor performance by the standard of diverse industry players in Nigeria and the world at large. The e-business sub-sector was not an exception as major events kept on unfolding like a recurring decimal, gradually shaping the course of events for the better for Telecom Operators and subscribers alike as well as others in the e-business world.
For example, a look at the time frame of just 12 months of operations by Zain Group, showed that the period under review witnessed the further cementing and enhancement of the new Zain brand across the Middle East and re-branding of the 14 operations in Africa including Nigeria from Celtel to Zain in August 2008. Other bold steps made by the operator within the year included: • The successful acquisition of Iraqna in Iraq with over 3 million customers for $1.2 billion and the acquisition of Westel in Ghana for $120 million.
• Commencement of operations in the Kingdom of Saudi Arabia on August 26 and in three months attained over one million customers.
• Raising $4.5 billion from a capital increase despite the world economic turmoil.
• Introduction of "One Network" to the Middle East in April and later connected two continents in August encompassing 16 countries, 50 million customers and population coverage of 500 million people. The service is contributing to the economic and social well-being of many communities. • It is on record that two major GSM operators- MTN and Zain- started the year 2008 on a bad note when the industry regulator, the Nigerian Communications Commission (NCC) in February, sanctioned them by ordering them to pay millions of naira as compensation to subscribers for providing poor services to Nigerians. In addition, the two operators were also banned from embarking on any promotion activity that could attract more customers to their network. The year was indeed challenging and competing for the GSM sector following the entry of Mubadala Development Company of the United Arab Emirate (UAE) which had secured $400 million license from NCC in 2007 to commence mobile operation in Nigeria. Etisalat came when many Nigerians had already identified with one or two numbers from other competitors, so, for Etisalat, it was a battle to create market niche for its new products. The company spent a lot of money in advertisements and promos to attract subscribers while assurances of quality services also remained the key attracting point to prospective customers.
When it eventually entered into the Nigerian telecom market in 2008 to commence operation, the face of the business changed instantaneously. For Zain too, it entered the Nigerian telecom market not as a new operator, but as a new core owner of Celtel International which added on its global network, additional 15 million subscribers. However, the company has been accused by its subscribers of changing name too often. The name, Zain is it's fifth network name in eight years. The company injected more fund to upgrade the network which as a result, reduced network challenges for its subscribers.
The year 2008 for Globacom was prosperous because it admirably graduated from being a local operator to become an international firm by acquiring operating licenses in two West African Countries- Republic of Benin and Ghana. It also celebrated 20 million subscribers base on its Nigerian network when it marked 5 years anniversary. The story of Mtel is very pathetic. It still occupies the lower ladder amongst the GSM operators despite promises by the Federal Government and the new management of the Nigerian Telecommunications Limited (NITEL) to revive the company within 100 days after a new take-over. Mtel workers engaged the embattled organisation in many protests as a result of unpaid salaries and allowances, while the subscriber base of the network dropped to less than 1,000 nationwide with zero revenue. Moreso, some of its workers left the company for other telecom firms.
Private Telecom Operators, (PTOs) otherwise known as CDMA operators, utilised their Unified Access Service Licences, UASL which the NCC introduced in 2006 to advantage in 2008 to offer other services. UASL allows operators to offer services that their frequencies can provide. They include: Visafone, Multi-Telcom, Zoommobile and Starcomms.With the introduction of unified licence by NCC, many of these CDMA operators, who have been operating as Fixed Wireless Access firms and were offering only limited mobility service to subscribers, extended their services to subscribers as mobile firms.
One of such CDMA operators was Visafone, a firm promoted by the Managing Director of Zenith Bank, Mr. Jim Ovia, who veered into the murky waters of telecoms market business in 2008. The entry of Visafone into the telecom market changed the terrain and made it more competitive, more so, with the introduction of Phones which cost as low as N3, 000. At the moment, one can acquire Visafone for less than N2, 000 with the SIM inclusive and can offer users FM radio, among others features . This made many individuals to own mobile phones for the first time. It also offered subscribers effective alternative to the rather expensive use of GSM mobile phones. Before now, Starcomms had been the leader in the provision of mobile phones on the CDMA platform that offered subscribers the opportunity to make cheaper calls than subscribers of GSM mobile phones. Other companies like Zoommobile, Multi-Link Telkom and Starcomms may have snatched several subscribers of GSM operators for reasons that have to do with provision of low cost handsets, on- net and off-net call charges.
Many analysts and commentators attribute the situation to the fact that PTOs services are pro-poor because of the strategy to penetrate into neglected and under-served communities in the country. For instance, in less than one year of operation, Visafone has successfully established its presence in at least 17 states and over 160 cities and towns in the country while Starcomms said its subscriber base hit a 2- million mark. Another issue that made news in the telecom sector in 2008, was the mysterious disappearance of the Nigeria Communication Satellite (NigComSat-1) in the orbit. The Nigeria Communication Satellite Limited led by Engr Ahmed Rufai however told Nigerians that the facility was packed like a car in the orbit because it has a low battery to power it. He said it was parked to avoid it causing damages to other countries' satellite in the orbit. It is on record that the SAT-3 problem that reportedly disappeared continued to be a major problem that caused nightmare and generated a lot of controversies among many Nigerians and industry operators. The inability of Nigeria Telecommunication Limited (NITEL) to provide effective transmission services on the undersea cable (SAT-3) while the cable itself has continued to serve many countries effectively was not only embarrassing but unimaginable. The Nigeria landing point under the management of NITEL encountered a number of downtimes in 2008
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