•
Stakeholders list ways to revive telecoms’ firm
• GSM
operators leverage Nigeria’s market to boost global earnings
IT was a veritable cash cow for
the nation and one’s ability to use its services was a sign of belonging to an
affluent class. But that was years ago.
Today, the Nigerian
Telecommunications Company (NITEL) is moribund and its facilities in different
parts of the country are rotting away. Yet, the Federal Government
remains undecided on the fate of the national telecommunications company.
The Guardian’s investigations
revealed that several facilities belonging to NITEL, including buildings;
telephone exchanges (across the six geo-political zones in the country);
transmission channels, ducts and cables; and offices have been severely
damaged.
Indeed, 80 per cent of various
NITEL offices, especially in Lagos and its environs, have been taken over by
weeds. Others have become either warehouses or abodes for mentally-deranged
persons.
The same story of the sorry state
can be told of NITEL’s offices at Ladipo, Iponri, Race Course, Mushin in
Lagos, Ondo, Ogun, Imo, Abuja, Delta, Benin, Abia, Kano, Katsina, Jigawa
and Bauchi. They have been taken over by weeds with their
facilities wasting away, while sometimes, hoodlums use them as their hide-outs.
Several unserviceable NITEL vehicles litter the premises of some hitherto busy
complexes.
Indeed, the about 12 NITEL
exchanges in Jigawa have been abandoned with some of them overgrown with weeds.
Besides, some NITEL’s armoured
cables worth over several billions of naira have been lost to road
construction, as a result of cuts and other forms of damage. The Badagry NITEL
exchange has been shut for over eight years now.
A NITEL’s contract engineer based
in Ughelli, Delta State, Kingsley Agbor said about 20 exchanges with installed
capacity of 32,500 telephone lines had remained comatose since 2006.
According to him, these include
those in Asaba, Agbor, Ogwashi-Ukwu, Warri, Sapele and Ughelli.
Agbor explained that the
facilities broke down shortly after the company was acquired by Transcorp.
Also, a disengaged employee of
NITEL in Kaduna, who sought anonymity, appealed to the government to reactivate
the several exchanges of the telecommunications company in the state.
According to him, Kaduna can
boast of about 21 exchanges, two in the municipal, while the remaining 19 are
in the local council areas of the state.
He lamented that most of the
facilities, worth billions of dollars in the state, had been vandalised and
others taken over by weeds.
A technician with NITEL’s office
in Ado-Ekiti, Ekiti State, who simply gave his name as Akin, said that all the
five telephone exchanges and three booster stations in the state had remained
shut. He disclosed that weeds had taken over virtually all the offices of the
telecommunications firm in the state.
In Ogun State, investigation
revealed that the office of the telecommunications firm, which used to be
around Ibara in Abeokuta, has packed up, apparently due to lack of activities.
In Yola, all the six exchanges
have remained moribund with some already vandalised. The Iponri NITEL exchange
in Lagos has also been abandoned while the exchange office at Race Course,
Lagos Island, which hitherto housed the NITEL headquarters annex, has been
taken over by squatters.
Similarly, the PWD Bus Stop NITEL
Exchange in Ikeja has been taken over by hawkers and urchins.
The damage and neglect continue,
while government remains silent on what it intends to do with the
telecommunications firm in 2013.
The rot of NITEL’s facilities is
coming on the heels of increased mobile telephone penetration in the country.
As at December 2012, Nigeria can confidently boast of 113 million active mobile
subscribers, with over 150 million connected lines. The country’s teledensity
is firm at 80.85 per cent.
Pre-Global System of
Mobile (GSM) communication era, about 2000, NITEL had over 500, 000
functional telephone lines. Today, NITEL among other fixed wired and wireless
service providers had recorded severe losses in the number of their users in
the country.
Indeed, GSM operators, including
MTN, Globacom, Airtel and Etisalat, which have continued to record huge
profits as a result of increased patronage from Nigerians, finished 2012
with about 109 million subscribers that were active.
The Nigerian Communications
Commission (NCC) statistics revealed that MTN Nigeria finished 2012 with 47.4
million subscribers; Globacom had 24.1 million; Airtel had 23.1 million with
Etisalat closing the year with 14.9 million.
Visafone closed the year with
2.65 million subscribers, while Starcomms Plc went down to 307, 844. Multilinks
was left with just 263, 767, while Zoom mobile finished 2012 with just 111,077
subscribers only.
By and large, the Nigerian market
has become a pedestal of geometric growth for the parent companies of some of
these operators including MTN, Airtel and Etisalat .
The MTN Group, with South Africa
as the headquarters operates in more than 10 countries of the world
and it can boast of about 182.7 million subscribers.
From its audited results for the
year ended December 31, 2011, MTN said its group revenue increased by 6.3 per
cent to R121, 848 million due to sound growth in Nigeria, South Africa and Iran
by 4.1 per cent, 7.7 per cent and 20.1 per cent respectively.
Indeed, another report said
between 2001 and 2010, MTN, which like others paid $285 million for its GSM
licence to NCC in February 2001, grossed a total of N2.988 trillion in revenues
between March 2001 and December 2010, and posted profits after tax amounting to
N857.655 billion during the same period.
Airtel Nigeria, with its parent
company based in India, Bharti Airtel and several operations across the globe,
in its December 31, 2012 financial report boosted its global revenue by 15 per
cent, which came from its African operations, with the Nigerian arm doing the
delivery.
Indeed, Bharti Airtel, which
currently has about 262.3 million subscribers across the globe, raked in about
$4.1 billion from its operations in Africa, including Nigeria, Rwanda,
Seychelle, Tanzania, Uganda and Zambia.
Etisalat, with headquarters
in the United Arab Emirate, in its third-quarter report for 2012,
said that the group’s net profits jumped 28 per cent to Dhs2.2 billion
($599 million).
Etisalat, which also operates in
countries including Nigeria and Iran , said that its consolidated revenues
remained flat at Dhs8 billion ($2.18 billion), while revenue from international
operations grew to Dhs2.4 billion. The aggregate subscriber base grew yearly by
20 per cent, or 22 million customers to 130 million.
According to Etisalat, Nigeria
and other Africa’s cluster consolidated subscriber base grew to 11 million at
the end of September 2012 representing Year-on-Year (YoY) growth of 29 per cent
and Quarter-on-Quarter (QoQ) growth of 13 per cent, while Asia cluster
consolidated subscriber base grew to 8.2 million at the end of September 2012
representing QoQ growth of six per cent while YoY declined by three
per cent as year 2011 included the subscriber numbers of Indian operation that
was deconsolidated in March 2012.
Group Chief Executive Officer,
Etisalat, Ahmad Abdulkarim Julfar commented: “For some period now, we have
recorded significant growth in our international operations, despite regional
socio-economic tensions, and we are pleased with the developments we have made
across our key markets, specifically in the Kingdom of Saudi Arabia, Egypt and
West Africa, as well as Afghanistan and Sri Lanka.”
Indeed, a Pyramid Research
report said in 2010, telecoms companies, MTN, Globacom, Airtel, Etisalat
and CDMAs, earned N1.3 trillion ($8.6 billion) in revenue from billing
Nigerians for using their services.
The research firm predicted that
revenues would hit N1.7 trillion ($11 billion) by 2013.
Meanwhile, The Guardian also
learnt that in the early days of the GSM revolution in the country, some of the
operators used to interconnect through NITEL’s primary exchanges, the
interconnection circuit called E1, which are in Ikeja, Apapa, Iponri and
particularly Saka Tinubu in Lagos.
A telecoms expert, who spoke to
The Guardian said then, all the Private Telecoms Operators (PTOs) channeled
their optic fibre to the Saka Tinubu NITEL exchange point and
interconnect offering telecommunications services through micro wave
technology.
“But that stopped. The operators
complained that NITEL refused or was deliberately suffocating that link and
subsequently, they stopped connecting through NITEL. Some of the operators,
especially the GSM operators because of the peculiarity of their services got
Mobile Switching Centres (MSC), where all their Base Transceiver Stations (BTS)
are connected, by so doing giving them direct access in the country.
“Some of the reasons why they
dropped NITEL’s service was because they had more traffic than what NITEL
facilities can contain. They reported that NITEL couldn’t come up with enough
Call Detail Records (CDR). It was difficult for operators to get justified CDR
because NITEL users were few and they subsequently became hugely indebted to
the operators. They couldn’t reconcile. So along the line, in the mid 2000s,
NCC appointed a licensed Interconnect Clearing house to reconcile interconnect
debts among operators. That act eventually killed the ambition of NITEL”, he
stated.
Commenting on the richness of the
Nigerian market, a former General Manager with NITEL, who rather preferred
anonymity, said if government had done what it ought to have done, the several
billions of dollars accruing to these private companies would have come to the
Nigerian economy as the majority of their earnings are repatriated
to their home countres.
“You can imagine, MTN Nigeria
earning above N2 trillion within a decade of operating in the country. Bharti
Airtel, which acquired Zain boosts its global earnings by 15 per cent
from its African operations among others. Nigeria remains the market.
“However, I must commend them,
they took a decisive risk. In its 2002 financial result, MTN reported a loss
after tax of about N5.091 billion, but was able to turn this around by the next
year by investing in an aggressive network expansion programme and so many
others too. But I still believe that if government had been more proactive
about NITEL, it would have been the gateway to Africa’s telecommunications
network today. Is it the huge infrastructure, though in rot across the country
now, the technical workforce, the expertise, among others that you want to talk
about? Corruption, mis-management, too much government interference, policy inconsistencies
were among the bane of NITEL”, he stated.
In March 2012, the government
announced plans to liquidate NITEL and its mobile subsidiary M-Tel, which
signals an end to the various attempts to privatise the company since 2001.
Indeed, the NITEL privatisation
first began in 2001 when a strategic equity stake was sold to the International
Investors London (IIL) consortium for $1.3 billion.
However, the bid was cancelled
after IIL failed to pay the balance of the fee, with the consortium forfeiting its
$131 million deposit.
In 2003, the Nigerian government
appointed Pentascope, the telecoms consulting arm of Netherlands-based operator
KPN, as part of a management contract with a view to eventually selling NITEL
to KPN.
However, this effort also failed,
with the contract terminated within a year amid allegations from Pentascope of
mismanagement and incompetence, while the government cited a failure to meet
performance and roll-out targets.
The privatisation of NITEL went
through a number of additional bidding processes in 2007 and 2009, with bids
ranging from $750,000 to $2.5 billion, and players such as China Unicom
reportedly assessing the possibility of purchasing the operator.
The Guardian had exclusively
reported last July that about N500 billion in various litigations, unpaid
workers’ salaries and arrears, depleted assets and other “social challenges”
had hindered the proposed liquidation in 2012.
Efforts to speak with the Bureau
of Public Enterprises (BPE) spokesperson, Mr. Chukwuma Nwokoh, proved abortive,
as he refused to pick several calls made to him.
He had told The Guardian last
year that no news about NITEL yet, stressing that when there was any, “you will
know.”
However, telecommunications
experts, who spoke with The Guardian, differed on what it would cost to
reposition and rehabilitate the troubled telecommunications firm.
According to Fola Ayeni, a
retired telecommunications engineer, based in Abuja, more than N3 billion may
be needed by government to rehabilitate about 20 moribund exchanges in some
states due to neglect and years of disuse.
Ayeni, who said some of the
exchanges with installed capacity of 24,000 telephone lines could still be
viable if adequately reactivated, noted that the reactivation would entail the
replacement of some damaged cables; purchase of several 500KVA generators as
well as replacement of the air conditioning system, among others.
He said some vandalised exchanges
in some particular locations had installed capacity of between 8,000 and 10,000
lines.
Indeed, a recent Nigerian
Communications Commission’s (NCC) statistics currently put the number of fixed
wired and wireless subscribers in the country at 432,899. The players,
including NITEL, lost about 255,434 lines between January and November 2012.
Former Minister of
Communications, Mr. Olawale Ige, who spoke with The Guardian, said if NITEL
must be revived, government may need to ask from other countries’ national
carriers, which started with NITEL and were still in operation, how they were
able to survive.
Ige, an engineer, said Nigeria
may seek the experience of firms, including British Telecoms and German
telecommunications firm, to know their survival strategy.
The former minister, who said it
may be difficult to ascertain the level of depreciation of NITEL’s assets in
figures, noted that the telecommunications firm’s infrastructure had gone from
bad to worse.
But if NITEL must be revived,
Chairman, Association of Licensed Telecommunications Operators of Nigeria
(ALTON), Mr. Gbenga Adebayo in an interview with The Guardian, said the
telecommunications firm should be divided into various components to make it
easy for would-be buyers.
According to him, NITEL in its
heyday, especially in the nineties, enjoyed a huge market share; goodwill and
government support, “but things changed drastically in the years after and it
went like that till today. NITEL infrastructure have lost value. They have
depreciated seriously. I can’t quantify that now, but they have lost value.
“NITEL is a large corporation,
which I think is too big for one entity to purchase. For NITEL’s revival,
government may need to split it into component parts. Switching board;
backbone; transmission channels; submarine cables, among others, should be
divided. With this, it becomes easier for would-be investors to put money.
NITEL has exchanges in virtually all the local councils of the federation.”
Recently, an online telecoms
platform—ItnewsAfrica reported that China’s Huwei had plans to invest in NITEL.
ItnewsAfrica said Huawei had
planned to make a $627 million investment into the now-defunct NITEL.
The Platform quoted NITEL’s
former Chief Operating Officer, Nicholas Okoye saying, “Had the corporation
no sabotage by politicians and ridiculous litigations by state
governments, which sued NITEL’s new owners Transcorp for its taxes dating as
far back as 30 years, it would have been profitable.”
Source: Guardian
No comments:
Post a Comment