RELEVANCE OF GLOBAL SYSTEM FOR MOBILE COMMUNICATION TO BUSINESS IN NIGERIA

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CHAPTER ONE

1.0BACKGROUND OF THE RESEARCH

Telecommunication arrived in Nigeria over 100 years ago. At independent  in 1960, the  country only had about 18, 724 phone lines for the use by a population of roughly 40 million from independence, various government made  several attempts to increase the  number of lines in Nigeria. However, these attempts failed woefully due to  certain reasons,  chiefly amongst those are monopoly of this sector by the country’s public utility. Nigerian Telecommunication  Plc, NITEL and its  inept corrupt management.

By the beginning of 1999, there were roughly 500,000 lines available for a population   of around 120 million Nigerians.

The present administration  of chief Olusegun Obasanjo broke the barrier of telecommunication  by adopting deregulation through privatization. This it achieved by auctioning  licenes for Global system for mobile (GSM) companies in January 2001 for $286 million each and further reserved a licence for NITEL.

However, only two (2) out of the three (3) companies at the  auction, MTN Communications and ECONET Wireless were warded full GSM licences, the third a successful company at the auction, communication Investment limited (CIL) was refused alicence on the growth that  two digital mobile licensed operating – ECONET and MTN who embarked on vigorous  publicity drive to catch the large market in the country. Thus, the recent announcement by the operators of plans to commence operations by 7th and 8th August by ECONET and MTN came as  much awaited news by many Nigerians.

The journey to success in  Nigeria telecommunication milleu has been  long and tortours. Telecommunication facilities in Nigeria were first established in 1886 by the colonial administration.

Between 1960 and 1985 the telecommunication sector consisted of the department  of posts and telecommunications sector was (grossly underdeveloped) in charge of the internal network company the  Nigeria  external telecommunication (NET) limited, responsible for the  external telecommunications services. NET provided the gateway to the outside world. the installed switching capacity at the end of 1985 was about 200,000 liens as against the planned target of about 460,000 all the  exchanges were analogue. Telephones  penetration remained poor equaling telephone  line to 440 inhabitants, well below the  target of 1 telephone line to 100 inhabitants recommended by ITU for developing countries. The quality of services was largely unsatisfactory. The telephone system was  unreliable, congested  expensive and customer unfriendly.

Arising from the  foregoing in January 1985, the erstwhile post and telecommunication (P & T) department was split into postal and telecommunication divisions. The latter was  merged with NET to form Nigerian telecommunications limited (NITEL), a limited  liability. The main objective of establishing NITEL was to harmonise the planning and  coordination of the internal and external telecommunications services, rationalize investment in telecommunications development and provide accessible efficient and affordable services.

Almost 46 years down the line, the Nigeria telecommunication lines available are roughly ever million to the 120 million people in the country.

1.1   SIGNIFICANCE OF THE RESEARCH

the significance of this research work are numerous, but I will like to focus on these:

(1)        To enlighten the public on the  usefulness of globalization of mobile communication to them.

(2)        To expand people’s view on the operations of the various telecommunication  services in the country.

(3)        It is also meant to teach corporate bodies the  relevance of GSM to their operations and business.

(4)        Its relevance to the society as a whole.

Apart from  the above mentioned significance of the  research work, it is also for the   general understanding of  ways and areas which GSM affect the business  world in the country.

Furthermore, it penetrates  on the  emergence of  high profitability that accompany GSM communication in Nigeria. Most business and other opportunity that accrue to  firms are easily tapped into, due to the fact that there is a cheaper and easy means to reach and exploit them profitability.

The disadvantages were not left out in this work. The  tariffs charged by these operators are too high in Nigeria,  compared to the tariff of other countries in which they operated. Another strong weak side of GSM is that their poor network coverage to  reach people in the remote parts of the country. Most of these service providers do not reach for into some parts of the country which has been  hampering their services from been qualified as fully efficient.

Another main set back of this study is the “network failure” syndrome. This is a common problem faced by customers of the PTO’s. There are several cases of network  fluctuation on phones because these service providers  are really focused on making back their  license fees, so they are majorly targeting their capital and profit while the customers are left at the  mercy of unsatisfactory services.