Business
How NATCOM can boost land phones in Nigeria
The nostalgic feeling of many Nigerians on the use of landlines may soon be a reality if the acquired Nigerian Telecommunications Limited (NITEL) is put on the stream by NATCOM, the new investor. According to the industry regulator, the Nigerian Communications Commission (NCC), NATCOM has expressed its readiness to revive the land phone use NITEL was known for before the inception of the Global System for Mobile communications (GSM) in 2001.
Speaking recently on television programme, the Director, Public Affairs at NCC, Tony Ojobo stated that reprieve would soon come the way of phones users to stem the tide of recurring network challenges they have been experiencing over the years.
NATCOM is said to be planning to launch its services on Long Term Evolution Technology or 4G which is known to be a more reliable technology for telecom services, especially data.
Shortly after the new investor won the bid to take over bid, NCC expressed satisfaction with the privatisation of NITEL. The regulatory body stated that the hope of Nigerians for diversified telecommunications industry had been rekindled.
Industry analysts also posit that NITEL had the resources and pedigree to bring back landlines and champion broadband revolution in the country. They also expressed optimism about NATCOM’s capability to revive landlines across the country.
However, there are reservations about the operations of landlines in the present industry environment, going by the challenges existing operators are going through.
Speaking with Hallmark, the Managing Director of Teledom Group, Emmanuel Ekuwem, said the revival of landline in Nigeria will further revolutionise the Information Communication Technology sector. He however stated that it would be a herculean task before NATCOM.
“In Europe and US, landline is used more than mobile phones. The reason for this is because of the technology that comes along with it. The cost is cheaper, voice clarity is guaranteed and more importantly, the speed at which data runs is quite appreciable when compared to that of GSM service. The new investor also knows the viability of the company, besides the property assets before going for it.”
Even though NATCOM has been given a three-year time frame within which to commence operations, Ekuwem expressed concerns over the task ahead for the new investor.
According to him, “Indeed, it will be a plus to the telecom industry and all Nigerians if landlines are brought back. Personal savings can be enhanced as people will spend less to talk or explore data services unlike now that they spend a lot on the same services.
Beyond that, being a national carrier, reinvestment on the company will create more employment opportunities.”
“But the fact is that NATCOM needs to have a comprehensive infrastructure auditing which will include NITEL exchanges, transmission backbone and other core assets. Of course, huge finance will be needed to do all these before even talking of rolling out services,” Ekuwem stated.
The issue of Right of Way (RoW) is being raised by industry stakeholders as a potential threat to NATCOM’s plan of landlines. The cost element, security of the fibre cable and access to some tough terrains are viewed to be critical determinants of NATCOM success.
In his view, the Association of Telecommunications Companies of Nigeria (ATCON) President, Lanre Ajayi, said NATCOM has a huge market to capture, especially in the data segment.
“The broadband market is very large. NATCOM can tap into it.
Currently, we have only about six percent of broadband penetration,” he said.
At the first bid, NATCOM offered a bid of $221m which was said to be lower than the reserve price. It was therefore asked to reverse the bid and in the second round, it offered the winning bid of $252.25m.
With the exception of LM Ericsson Nigeria Limited, all the other members of the consortium are equity holders with Prime Union and Olutoyl Estate holding 30 per cent equity each. LM Ericsson is a technical partner to the group.
Four of the equity holders, Prime Union Investment Limited, Olutoyl Estate Development & Services, Legal Resources Alliance & Co and Natspace Telecommunication Investment Limited with a combined equity of 80 per cent of the consortium are linked to businessman, Dr. Olatunde Ayeni.
Also commenting on the possible revival of landlines, the National Association of Telecommunications Subscribers (NATCOMS) President, Deolu Ogunbanjo, said it will be a relief for Nigerians if NATCOM makes the wish real as soon as possible.
In his words: “I believe the offer of land phones by NATCOM would be quite commendable.
In many developed countries; they rely mostly on this for call and data services. That is why somebody can talk for a very long time over there to their family members and friends in Nigeria in a relaxed state.
But for NATCOM to operate in the market competitively, NCC which is the industry regular has to step in and see to it that the mission is accomplished.
It is a fundamental issue that should be taken seriously by any forward-looking government; since it will address broadband penetration concerns.”
“What NCC needs to do is to set interconnect rates at a business-friendly level that will not scared NATCOM operations. In fact, that is what contributed to the failure of Starcomms, MultiLinks, ZoomMobile and others. I only hope this mistake would not be repeated.
According to analysts, NATCOM success in the telecom market is hinged on innovative technology like the Long Term Evolution (LTE) or Four Generation (4G).
