TELECOMMUNICATION – its importance—The world is becoming a global village. Telecommunications are a key infrastructure of economic and social development for the second half of the 21st century. As a result of advances in technology, rapid changes are taking place in telecommunications. Telecommunications is both dynamic and capital intensive. In view of its catalystic effect on the development of other sectors of the economy (agriculture, health, tourism and education) and its necessity for the commercial, industrial, socio-economic and political development, the need for an orderly and efficient development of telecommunications infrastructure in developing countries like India and Nigeria has become all the more important.

NIGERIA the rising sun———–The journey to success in Nigeria’s telecommunication milieu has been long and tortuous. The Nigerian telecommunications sector was grossly underdeveloped before the sector was deregulated in 1992 with the establishment of a regulatory body, the Nigerian Communication Commission (NCC). Their mission to create a knowledge-based information society through participatory and innovative regulation of the telecommunications industry by a responsive and self-motivated team. It has issued various licenses to private telecommunications operator. These include 7 fixed telephony providers that have activated 90,000 lines, 35 Internet service providers with a customer base of about 17,000. The emergence of mobile telephony is obviously one of the major revolutions of communication in Nigeria. Its simplicity has facilitated its use by both literate and illiterate people. It has become one of the technologies to be readily embraced by all and sundry. Use of cell-phones have soared, and have mostly replaced the unreliable services of the Nigerian Telecommunications Limited (NITEL).

The telephone industry in Nigeria has undergone dramatic changes since 2001. Some key problems which were considered as hindrances to the building of mass and wide extension of telephone services have been overcome to a great extent.

While the telephone service providers have focused their services and marketing in the urban sectors, there exists a huge potential in the rural areas. Low costs along with some other contributing factors including regulation, competition, aggressive marketing, latent demand, economic commerce boost and a boisterous informal economy have contributed to increase access to telephone users in Nigeria.

Nigeria is one of the fastest growing telecom industries in the world with a mobile penetration of 20%. Deregulation (in 2001) of the mobile phone market has led to the introduction of GSM mobile network providers operating on the 900/1800 MHZ spectrum, MTN Nigeria, Gloabcom, Celtel Nigeria and MTel. The current estimate of mobile users in April 2007 is 38,000,000.

Initially, it was NCC that was instrumental in transforming the telephone industry in the country. With emergence of new competitive providers entering the market, the telecom industry has experienced rapid growth. While VMobile earned N22 billion in 6 months in 2004, MTN managed to make a gross earning of N119 billion for a 6 month period.

The entrance of the second national operator, namely Gloabcom has revolutionized the market competition. It was the first to introduce per second billing in the market which was dominated by per minute billing. It also introduced Glo Mobile starter packs in 2004 which were N1 (as compared to the previous starter packs which were sold at N20, 000) and forced competitors to discount their starter packs.

UAE telco operator Etisalat, through a strategic partnership with Mubadala Development Company, is the latest to enter the scene of fast growing telecom industry in NIGERIA. This is Etisalat’s 15th market globally and 11th in Africa. Etisalat is the third fixed-line service provider and fifth mobile operator in Nigeria.

Despite the challenges that the country is facing at the moment, it is officially being recognized as the largest telecoms market in Africa. Nigeria has made a remarkable progress in 6 years with less than half a million connected lines in 2001 to nearly 42 million active subscriber base in 2007 thus pushing South Africa aside to the 2nd position. It has got yet another endorsement from none other than US govt.

The year 2007 strongly emphasised the important role of ICTs as a tool for strengthening the economy and bringing in the much desired socio economic changes. ICTs are technologies that enable communication and information processes and transmission through electronic means. ICT is being considered as a panacea to grinding poverty faced by 70% of the population. It has become one of the most important tools to curb the menace of poverty, drive sustainable growth in the country and ultimately position Nigeria to the top 20 economies by 2020. But this is will be possible only when the information communications technology (ICT) is deployed to fight poverty, generate wealth and ultimately take Nigeria to greater heights.

Nigeria currently has 42,915 867 million active subscribers and with the entrance of new players into the telecoms scene, it is all set to reach 60 million active subscriber base by end of the year.

The onus lies on the government to make the deployment of ICT a focal point of its policies by establishing telecentres in rural areas and IT parks in different states to bring the country in line with the developed nations of the world.

INDIA———Leading the way in telecom industry

For the past decade, telecommunication activities have gained momentum in India. Sincere efforts have been made from both governmental and non-governmental platforms to enhance the infrastructure. The Indian telecommunications is emerging as one of the key sectors responsible for India’s resurgent economic growth. The idea is to help modern telecommunication technology penetrate India’s socio-culturally diverse society, and to transform it into a nation of technology aware people. It is the fastest growing telecommunication market in the world, and the third largest telecom market (with 281.62 million telephone connections till January 2008). India has become one of the fastest-growing mobile markets in the world.

A large population, low telephony penetration levels, and rise in consumer income have contributed to making India the fastest-growing telecom market in the world. The first and largest operator is the state-owned incumbent BSNL, which is also the 7th largest telecom company in world in terms of number of subscribers. The year 2007 saw India achieving significant distinctions: having the world’s lowest call rates (2-3 US cents), the fastest growth in the number of subscribers (15.31 million in 4 months), the fastest sale of million mobile phones (in a week), the world’s cheapest mobile handset (US$ 17.2) and the world’s most affordable colour phone (US$ 27.42) and largest sale of mobile handsets. After the telecommunication policy was revised to allow private operators, many new companies such as MTNL, Reliance, BPL, Tata Indicom, to name a few, successfully entered the high potential Indian telecom market. The rural India, however, still lacks these facilities.

India has achieved its target of reaching 250 million telephone subscribers by 2007, two months before target. Simultaneously, overall tele-density has increased to 24.63 % in January 2008. Wireless segment has emerged as the preferred mode of telephone service by the consumers. The share of mobile phones has increased from 71.69 per cent at the end of March 2006 to 86.07 per cent at the end of January 2008. While total mobile subscriber base was 242.4 million, wire line subscriber base was 39.22 million. Private sector has become the dominant player in the industry, especially in the mobile market.

Telecommunication is the lifeline of the rapidly growing Information Technology industry. Internet subscriber base has risen to 6.94 million in 2005- 2006. Out of this 1.35 million were broadband connections. More than a billion people use the internet globally.

The Indian telecom industry has been attracting accelerating amount of investment. For example, during the first nine months of the current fiscal year (April-December 2007), US$ 1.04 billion of FDI has been made against US$ 478 million for the whole of 2006-07. The cumulative FDI inflows from April 2000 to December 2007 have been US$ 3.62 billion, accounting for 7.99 per cent of the total FDI inflows into the country. A report by Merrill Lynch puts Indian telecom industry’s EBIDTA (earnings before interest, tax, depreciation and amortisation) ahead of developed countries like US, UK, Japan and France among others. With such growth projection, this industry is likely to see increased investments. In fact, total investment is projected at US$ 76.6 billion during the eleventh plan period (2007-12).

India is going to be positioned as a “Regional Hub” for Telecom Manufacturing Creation of additional 0.5 million jobs by 2010 and 1.5 million jobs by 2015. The nature of the telecom industry has changed, and will continue to evolve. There are numerous opportunities for people who understand the new types of technologies & services, and they must come with the right skills

Filed under: Telecommunications