Lagos — After several months of speculation, the General System of Mobile telephones (GSM) service has finally taken off in Nigeria, with one of the three licensed providers, Econet Wireless, commencing commercial operations.
"We have launched," Jubril Saba, an official of the company, told allAfrica by phone here, late Monday.
Last January Econet, and two other companies - MTN Nigeria and state-owned Nigerian Telecommunications (Nitel) - won three of the four licences available for GSM operation in Nigeria. A fourth winner, Communication Investments Limited, had its licences cancelled by the National Communications Commision, regulator of the telecoms industry in Nigeria, in controversial circumstances.
Rates announced by Econet and MTN show that subscribers will pay 30 -35 naira (N111 = US$1 ) per minute during peak period, and about 21 naira per minute during off-peak periods.
Rejecting complaints by potential subscribers at the tariffs announced by the GSM providers, Saba said the rates "are actually very competitive."
Last week, President Olusegun Obasanjo met with officials of Econet and MTN, as well as officials of Nitel, over complaints by the companies that Nitel would not be able to interconnect them for commencement of operations. Obasanjo at the meeting stressed the need to keep to the roll-out date of August 9.
The GSM services are expected to bring relief to Nigerians. A country with a population of about 120 million, Nigeria currently has about 700,000 fixed telephone lines. This gives the country extremely low teledensity - defined as the number of telephone lines per thousand people.
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Econet's Saba said his company was hoping to connect 100,000 lines before the end of the year. After that he, said, "there will be an explosion," which will see Econet providing as many as 700,000 lines.
The other two winners are expected to provide as many lines. MTN will also begin with an initial capacity to connect 100,000 lines, while Nitel is expected to start with 120,000 lines. The ability of the three companies to provide more lines will be boosted by ongoing projects aimed at expanding NITEL's network to interconnect them.
The projects are currently being handled by international telecommunications companies, including Siemens of Germany, Alcatel of Italy, and Ericsson of Sweden.
The Federal government last Wednesday signed a $39m contract with L M Ericsson of Sweden for the supply of GSM equipment for Nitel, witha completion period of five months.This is expected to help Nitel roll out 120,000 GSM lines.
Saba said the rates, which now seem so high, are expected "to come down as the network expands." His view supports that of Ernest Ndukwe, Chief Executive Officer of the NCC, who believes the rates will fall as the networks expand.
"The commission has done a lot of market studies on tariffs around the world. Usually, when GSM is introduced, tariffs are not introduced at the lowest range. But as the network expands and subscriber base increases, tariffs are forced to go down," he said here last weekend, according to media reports.
