Services: Supporting mobile miracles

By Leonard Lawal in Lagos, ?Richard Synge and Kaye Whiteman
Posted on Monday, 21 September 2009 15:55

The early-September arrival of the Glo-1 submarine cable linking Lagos to Europe will provide yet more confirmation of the transformative effect of tele-communications on economies, such as Nigeria’s, that at first glance appear utterly resistant to change. The benefits will be felt in faster and more reliable communications, and lower costs all round.

“I believe this is going to transform the way we do business [and] lower the cost of internet bandwidth access in the country,” said Lanre Ajayi, president of the Nigeria Internet Group. The cable, laid in partnership with Alcatel Lucent at a cost of around $800m, has a huge ultimate capacity of 2.5 terabytes per second for voice, video and data communications.

Each new advance in Nigeria’s connectivity over the past ten years has been a mini-revolution in itself. After a decade of phenomenal growth, from paltry numbers in 2000 to around 70m mobile telephone subscribers – making it Africa’s leading market – Nigeria’s tele­communications sector is still making new breakthroughs, ensuring its reputation as the toughest of testing grounds for new ways of doing things.

SERVICES: Companies to Watch

One of the winners from the consolidation
exercise in

the insurance sector, merging
with Admiral and aquiring Royal Trust

Golden, among others??

Raising a

5bn naira bond to expand into selected
airports in Nigeria and the

region, as well as
modernise equipment in Lagos airport??

The fourth largest phone operator in the country,
and first

to list on the NSE, Starcomms reached
2.3m subscribers in March 2009,

CDMA technology

South Africa’s MTN was the first to enter the fray of the newly liberalised mobile telephone market in 2001 and, thanks in large part to its success here, quickly became the most successful mobile phone player in Africa. Drawn to the attractions of the Nigerian marketplace from the Middle East, Zain and Etisalat have joined the throng – the latter rolled out its services last year. The competition is fierce, despite the fact that local tariffs are among the highest on the continent – as a result of the need for companies to spend heavily on diesel to power their generators at their base stations.

Opportunities keep on opening up, the latest being the government’s ongoing fire sale of Nitel, for which MTN and Nigerian player Globacom are among the leading bidders of 13 to express interest. After several years of failed efforts to sell off the official national carrier, Nitel still has attractions for the bidders, one of them being its valuable stake in the SAT-3 undersea cable that links Southern Africa to Europe. With President Umaru Yar’Adua wanting the sale to happen by the end of October, Nitel could be sold in different parts, but the Bureau for Public Enterprises has said preference will be given to bidders seeking to acquire the bundle of Nitel’s fixed lines, its transmission backbone, the stake in SAT-3 and the mobile unit (known as Mtel).

Other developments among ser-vice providers in Nigeria include the rapid expansion of business travel and increasingly upmarket retail facilities. New hotels have been sprouting up not just in Lagos but also in business centres like Port Harcourt and Calabar. And the South African group Shoprite is becoming increasingly visible, with 50 planned outlets throughout the country.

The single most ambitious physical development project underway is the free trade zone at Lekki, outside Lagos, and this could eventually lead to a fully integrated urban development project, including the construction of a new airport to service the southern capital.

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