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Giant steps in telecoms but bottlenecks still remain.

The face of Nigerian telecoms has changed dramatically in recent years making cable satellite television available even to the ordinary man. But as Baffour Ankomah reports, Nitel, the parastatal telecoms company is still struggling with telephone congestion and other problems.

Foxboro Stadium, Boston, USA. One minute and 40 seconds stand between Nigeria and a famous victory over Italy, and a quarter-final berth in the 1994 World Cup. Lagos has come to a standstill, all eyes glued to thousands of TV screens - thanks to pictures coming via cable satellite television.

The seconds are ticking away. Mussi, the Italian right back, picks up the ball and opens the Nigerian defence with a surging run. He passes to Robert Baggio and the next second the ball is at the back of the Nigerian net. Italy have equalised. Lagos sinks to its knees.

Ten years ago only a few super-rich Nigerians would have watched this dramatic end of Nigeria's heroic World Cup campaign live on TV. Today, thanks to a vast improvement in global telecommunications making the world an even smaller village, millions of Nigerians watched their gallant Super Eagles do battle with the elite teams of the world live in their living rooms. Nigeria is now basking in cable satellite TV. And Lagos, the erstwhile nerve centre of the country, is fast becoming a city of huge satellite dishes.

But with a population of 88 million people (some say 100 million), Nigeria is still an untapped communications market. Even with the recent (by Nigerian standards) quantum jump in the provision of facilities, Nigeria's current telecoms strength is still below satisfactory.

There are only 0.24 telephone lines per 100 inhabitants in Nigeria compared with 9.70 lines per 100 inhabitants in South Africa. The world average is 19 lines per 100 inhabitants. The International Telecommunication Union (ITU) target is one line per 100 people.

With Nigeria still way behind with only 0.24 lines per 100 people, the country has a lot to do to catch up with the rest of the world. In the modern information-driven world, where a nation's competitiveness hinges on its ability to access and exchange information, Nigeria cannot afford to mark time while others fly past it.

Last year, as part of a restructuring effort, the Federal Government proposed to cancel the monopoly of the state-owned Nigerian Telecommunications (NITEL) which was incorporated in 1984 as a limited liability company.

For all practical purposes, Nitel has been a huge disappointment. It has not been able to meaningfully improve the bad telephone situation that existed before its incorporation in 1984. Today telephone congestion is so bad in Nigeria that many businesses have given up on Nitel and are sending messages by hand within their own cities.

The government realises that Nigeria cannot achieve its full business potential and attract foreign investors without an efficient telecom network.

Therefore it sees the removal of Nitel's monopoly as a way of bringing in efficiency by allowing private operators to compete with Nitel. Soon Nitel will have serious competitors breathing down its neck. The advantages thereof can only be good news for Nigerian businesses and ordinary telephone users.

Nitel sees the proposed removal of its monopoly as a life and death matter and has already embarked on an ambitious $480m rehabilitation programme to upgrade both the international and domestic networks in the country. The programme involves the installation of digital and cellular radio networks and the construction of a satellite earth station at Victoria Island in Lagos. In all, over 12 telephone exchanges will be installed.

The World Bank is supporting the programme with a $255m loan. When it is completed (hopefully by the of 1994), Nitel hopes to add more than 500,000 direct exchange lines to the current 400,000 lines. Telecom experts say Nigeria needs at least 10 million lines to cater for its ever growing population.

But with oil (Nigeria's major foreign exchange earner) not bringing enough revenue into the national exchequer, government officials say the country cannot afford to provide the 10 million lines now, not even in the near future.

Experts estimate the cost of a single fixed telephone line at $2,500. If you multiply $2,500 by 10 million, you are talking about megabucks (to use the American parlance) which Nigeria cannot afford.

Some Nigerian businessmen have therefore suggested that the government should rather concentrate on modernising the networks in the country's key centres, ie, Lagos, Abuja (the new federal capital) and the other 21 state capitals. This, they say, should involve the provision of a modern network for businesses and a radio-linked pay phone system for the public, especially in the rural areas.

But so far Nitel has concentrated its efforts and money on improving the congested networks in the state capitals without much success.

Hopefully by the end of the year when Phase 2 of the digitisation programme is completed, most of the 21 state capitals will be hooked to the national digital transmission network and from there to the international grid.

In the past Nitel had blamed its problems on the myriad of imported equipment used in the system. Nitel now plans to manufacture its own equipment locally but under license from a still unnamed foreign company.

Insiders say the licence might come from one of the four major equipment suppliers to Nigeria - Siemens, NEC, Plessey and Northern Telecom. Nitel engineers has already developed a 32-channel digital PBX to be manufactured locally.

Other Nigerians say Nitel is getting its priorities wrong. The problem, they say, is not manufacturing your own equipment but about finding answers to the congestion already blocking the system. Early this year, a Nitel telecoms analyst said the Lagos zone was so congested that subscribers had their numbers routed through Abuja. "If this continues", he said, "the whole system will soon collapse".

Communications Minister Alhaji Mohammed Abubakar Rimi said in March that he himself was suffering from "the congestion" but the best Nitel could do in the face of its ever shrinking budget was to install one million new lines in the near future to meet the ITU target.

For a start, he said, 500,000 lines would be added to the existing network before 1997. Of these, the Lagos area will get 140,000 lines, the former Eastern Nigeria 63,000 lines and the Northern zone 71,000 lines. Already some 12 billion Naira has been spent on the expansion programme, Rimi revealed.

He said Nitel would push ahead with its digitisation programme despite the financial constraints facing the company. Digitisation is, in fact, rapidly taking over from the old analogue system.

So far, the programme is going according to schedule and the end of the year completion date is likely to be met.

In the past few years, the provision of facilities at Abuja, the new federal capital, was one of Nitel's major headaches.

The transfer of government ministries from Lagos to Abuja sharply increased the telecoms demand in the new capital overnight. Nitel had to move fast and thank God there was money ready to award a $163m contract to the (ex-Siemens company) Electro Technologies Nigeria to expand and upgrade the telephone and telex network in Abuja.

Other telecom jobs currently underway in the country include a $42m digital radio link between Port Harcourt and Warri. The job is being done by Sweden's Ericsson and Nigeria's L.M. Ericsson for Shell Petroleum Nigeria.

Nitel recognises that the future really lies with satellite communications. Nigeria is currently hooked up to the INTELSAT's domestic satellite services which handle the country's telecom network.

Nitel's voice and data network is routed through three leased transponders on an INTELSAT satellite, and a further network of 23 Standard Z earth stations located throughout the country. With an additional 58 land mobile INMARSAT-A terminals in use, Nigeria has the largest satellite ground network in Africa. Yet it still has not solved its telephone congestion problem.

Two of the country's Standard-A satellite earth stations located at Kaduna and Lanlate (near Lagos) access INTELSAT's worldwide services via its Atlantic and Indian Ocean satellites - and this is the mainstay of the country's international communications network. The new $143m satellite earth station being built at Victoria Island in Lagos by Electro Technologies of Nigeria for Nitel is expected to increase the country's international telecom capacity when it is completed.

This will take some of the load from the 600-mile coaxial submarine cable link between Lagos and Abidjan in Cote d'lvoire which was installed in 1980.

This link provides a capacity of 480 voice circuits and it is enhanced by another submarine cable link from Abidjan to Dakar (Senegal) which goes on to Brazil, France and the USA.

Nigeria has an additional microwave radio network which links it up with neighbouring countries. Its 30-year-old telex network (installed by Siemens) is still popular with subscribers even in these days of fax machines.

The telex network has over 14,000 subscribers and 14 telex switching centres. The telex demand in Abuja alone is estimated over 3,000 new lines which will have to be installed by 1999.

Nigeria still has a long way to go if it is to become the telecoms giant it hopes to be.
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Title Annotation:African Business Special Focus: Telecoms in Nigeria
Author:Ankomah, Baffour
Publication:African Business
Date:Jul 1, 1994
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