investment opportunities in the telecommunication sector

8/12/2019 Investment Opportunities in the Telecommunication Sector

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INVESTMENT OPPORTUNITIES IN THETELECOMMUNICATION SECTOR

Nigeria is located in the region regarded to have the highest

level of international telephone traffic per subscriber. This isestimated at over 200 minutes per year, but the overall levelof traffic per inhabitant is less than 1 minute. This suggeststhat there is a pent-up demand that is not being met by theexisting supply of telecommunications services. The businessand investment opportunities in the sector are as followsHuge, Untapped Market!ith a population of 1"0 million people with improving

affordability, the mar#et potential for telecommunicationssubscriptions and usage over the next few years is indeedvery great.Profitabiit! of t"e Nigerian Tee#o$% MarketThe Nigerian telecommunications mar#et, as is, is one of themost profitable in $frica, and perhaps, the !orld. %orinstance, one of the Nigerian &'( companies declared fullprofitability less than 1) months after service launch on

investments of over *'+00m.

Pro&i%ion of Ser&i#e%The need to meet up with the T* standard led to thederegulation of the industry by the Telecommunications lawof 12, which ushered in a new era. /rivate sectorparticipation and operation in one or more of thederegulated telecommunications underta#ings is nowallowed. These are

'ales and installation of Terminal uipment /rovision and operation of /ublic /ay-phones

/rovision and operation of /rivate Networ# 3in#s

employing cables, radio communications, or satellite,within Nigeria


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/rovision and operation of /ublic (obile

4ommunications54ellular (obile telephony, /aging, and Trun#ed

6adio7

/rovision and operation of 4ommunityTelecommunication 56ural and *rban7

/rovision and operation of 8alue $dded Networ#9:ata

'ervices 5nternet, 8oice (ail, lectronic (ail services7 6epair and maintenance of telecommunications

facilities, and 4abling 5e.g. Telephone-external and internal wiring for

residence, office etc.7.

Lo#a Manufa#ture of E'uip$entThe local manufacture of switching and transmissioneuipment is necessary to meet the desired expansion./resently, the country can only boast of local manufacture oflow pair capacity cables. Thus, there is the need for theestablishment of a plant to manufacture high pair cables aswell as fibre optic cables and other telecommunicationsaccessories.;ther investment opportunities in the industry include

investing in any sub-sector of the industry such asmanufacture, and supply of euipment and accessories aswell as service provision. The industryowever, only corporate bodies registered in Nigeria and9or

Nigerian citi=ens can participate in telecommunicationsservice delivery. %oreign investment is encouraged through

?oint 8entures between the foreign investors and theirNigerian affiliates.n addition to this, N44 licence should be obtained. Thelicence may cover


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The right to set-up and operate networ#s, and

The right to set-up operate and provide services forthird parties on commercial basis.

Ot"er (i)ed Nationa Operator%

i*+ Nationa Operator%%ixed 'ervice National ;perators shall be licensed toestablish and operate telecommunications service facilities inall the six 5@7 geographical =ones.The functions include the following

To carry out the provision of uality service to its

subscribers and compliance with tariff regulations,and

To carry out the responsibility of a National 4arrier as

a principal agent, trustee, contractor or otherwiseand, either alone or in conAunction with others.

To do all such things considered incidental or

conducive to the performance of that responsibility. This category of operators includes the /rivate

Networ# 3in#s 5/N37 licences and is limited toownership and operation of facilities for domesticservices only.

ii*+ ona Operator%$ fixed =onal operator shall be licenced to establish andoperate telecommunications services in one 517 of the 'ix5@7 geographical =ones. ts functions include the following, among others

/rovision of uality services to its subscribers and to

comply with tariff regulations To carry out the responsibility of a National Bonal

;perators as principal agent, trustee, contractor orotherwise and, either alone or in conAunction withothers. To do all such things considered incidental orconducive to the performance of that responsibility.

iii*+ Mobie Ceuar Operator%


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n attaining the obAectives of liberalisation, globalisation,economy of scale, effective national coverage as well asefficient delivery and pricing, there shall not be more thanfour 5"7 National 4ellular operators for the initial five 5C7

years.The functions include the following, among others

To plan, develop, operate and administer the National

Networ# To provide service to all parts of the %ederation and

beyond /rovision of uality services to its subscribers and

compliance with tariff regulations To carry out the responsibility of a National 4ellular

;perator as principal agent, trustee, contractor orotherwise and either alone or in conAunction withothers, to do all such things considered incidental orconducive to the performance of that responsibility

stablishment and operation of international

telecommunications gateway for cellular traffic only, iffound necessary.

t is worthy to note that another mobile cellular operator,

(ubadala :evelopment 4ompany, a *nited $rab miratebase firm was recently licensed to provide nationwideservice. This is due to the fact that the initial five 5C7 yearsfree=e which commenced in 2001 has expired. There istherefore room for additional mobile cellular operatorsNOTE: The modalities for appointing the carriers shall becompetitive and transparent.Te#"noog! -e&eop$ent% and Lo#a Manufa#ture

&overnment ensures that the Telecommunicationsdevelopment follows the worldwide standard D the

establishment of digital or any other technology whilegradually phasing out the existing analogue system. ffortsshall be made to promote indigenous design and productioncapability and manufacture of a substantial amount of the


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components and sub-systems used in thetelecommunications services.

investment opportunities in the telecommunication sector

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