IT was a veritable cash cow for the nation and one’s ability to use its services was a sign of belonging to an affluent class. But that was years ago.
Today, the Nigerian Telecommunications Company (NITEL) is moribund and its facilities in different parts of the country are rotting away. Yet, the Federal Government remains undecided on the fate of the national telecommunications company.
The Guardian’s investigations revealed that several facilities belonging to NITEL, including buildings; telephone exchanges (across the six geo-political zones in the country); transmission channels, ducts and cables; and offices have been severely damaged.
Indeed, 80 per cent of various NITEL offices, especially in Lagos and its environs, have been taken over by weeds. Others have become either warehouses or abodes for mentally-deranged persons.
The same story of the sorry state can be told of NITEL’s offices at Ladipo, Iponri, Race Course, Mushin in Lagos, Ondo, Ogun, Imo, Abuja, Delta, Benin, Abia, Kano, Katsina, Jigawa and Bauchi. They have been taken over by weeds with their facilities wasting away, while sometimes, hoodlums use them as their hide-outs. Several unserviceable NITEL vehicles litter the premises of some hitherto busy complexes.
Indeed, the about 12 NITEL exchanges in Jigawa have been abandoned with some of them overgrown with weeds.
Besides, some NITEL’s armoured cables worth over several billions of naira have been lost to road construction, as a result of cuts and other forms of damage. The Badagry NITEL exchange has been shut for over eight years now.
A NITEL’s contract engineer based in Ughelli, Delta State, Kingsley Agbor said about 20 exchanges with installed capacity of 32,500 telephone lines had remained comatose since 2006.
According to him, these include those in Asaba, Agbor, Ogwashi-Ukwu, Warri, Sapele and Ughelli.
Agbor explained that the facilities broke down shortly after the company was acquired by Transcorp.
Also, a disengaged employee of NITEL in Kaduna, who sought anonymity, appealed to the government to reactivate the several exchanges of the telecommunications company in the state.
According to him, Kaduna can boast of about 21 exchanges, two in the municipal, while the remaining 19 are in the local council areas of the state.
He lamented that most of the facilities, worth billions of dollars in the state, had been vandalised and others taken over by weeds.
A technician with NITEL’s office in Ado-Ekiti, Ekiti State, who simply gave his name as Akin, said that all the five telephone exchanges and three booster stations in the state had remained shut. He disclosed that weeds had taken over virtually all the offices of the telecommunications firm in the state.
In Ogun State, investigation revealed that the office of the telecommunications firm, which used to be around Ibara in Abeokuta, has packed up, apparently due to lack of activities.
In Yola, all the six exchanges have remained moribund with some already vandalised. The Iponri NITEL exchange in Lagos has also been abandoned while the exchange office at Race Course, Lagos Island, which hitherto housed the NITEL headquarters annex, has been taken over by squatters.
Similarly, the PWD Bus Stop NITEL Exchange in Ikeja has been taken over by hawkers and urchins.
The damage and neglect continue, while government remains silent on what it intends to do with the telecommunications firm in 2013.
The rot of NITEL’s facilities is coming on the heels of increased mobile telephone penetration in the country. As at December 2012, Nigeria can confidently boast of 113 million active mobile subscribers, with over 150 million connected lines. The country’s teledensity is firm at 80.85 per cent.
Pre-Global System of Mobile (GSM) communication era, about 2000, NITEL had over 500, 000 functional telephone lines. Today, NITEL among other fixed wired and wireless service providers had recorded severe losses in the number of their users in the country.
Indeed, GSM operators, including MTN, Globacom, Airtel and Etisalat, which have continued to record huge profits as a result of increased patronage from Nigerians, finished 2012 with about 109 million subscribers that were active.
The Nigerian Communications Commission (NCC) statistics revealed that MTN Nigeria finished 2012 with 47.4 million subscribers; Globacom had 24.1 million; Airtel had 23.1 million with Etisalat closing the year with 14.9 million.
Visafone closed the year with 2.65 million subscribers, while Starcomms Plc went down to 307, 844. Multilinks was left with just 263, 767, while Zoom mobile finished 2012 with just 111,077 subscribers only.
By and large, the Nigerian market has become a pedestal of geometric growth for the parent companies of some of these operators including MTN, Airtel and Etisalat .
The MTN Group, with South Africa as the headquarters operates in more than 10 countries of the world and it can boast of about 182.7 million subscribers.
From its audited results for the year ended December 31, 2011, MTN said its group revenue increased by 6.3 per cent to R121, 848 million due to sound growth in Nigeria, South Africa and Iran by 4.1 per cent, 7.7 per cent and 20.1 per cent respectively.
Indeed, another report said between 2001 and 2010, MTN, which like others paid $285 million for its GSM licence to NCC in February 2001, grossed a total of N2.988 trillion in revenues between March 2001 and December 2010, and posted profits after tax amounting to N857.655 billion during the same period.
Airtel Nigeria, with its parent company based in India, Bharti Airtel and several operations across the globe, in its December 31, 2012 financial report boosted its global revenue by 15 per cent, which came from its African operations, with the Nigerian arm doing the delivery.
Indeed, Bharti Airtel, which currently has about 262.3 million subscribers across the globe, raked in about $4.1 billion from its operations in Africa, including Nigeria, Rwanda, Seychelle, Tanzania, Uganda and Zambia.
Etisalat, with headquarters in the United Arab Emirate, in its third-quarter report for 2012, said that the group’s net profits jumped 28 per cent to Dhs2.2 billion ($599 million).
Etisalat, which also operates in countries including Nigeria and Iran , said that its consolidated revenues remained flat at Dhs8 billion ($2.18 billion), while revenue from international operations grew to Dhs2.4 billion. The aggregate subscriber base grew yearly by 20 per cent, or 22 million customers to 130 million.
According to Etisalat, Nigeria and other Africa’s cluster consolidated subscriber base grew to 11 million at the end of September 2012 representing Year-on-Year (YoY) growth of 29 per cent and Quarter-on-Quarter (QoQ) growth of 13 per cent, while Asia cluster consolidated subscriber base grew to 8.2 million at the end of September 2012 representing QoQ growth of six per cent while YoY declined by three per cent as year 2011 included the subscriber numbers of Indian operation that was deconsolidated in March 2012.
Group Chief Executive Officer, Etisalat, Ahmad Abdulkarim Julfar commented: “For some period now, we have recorded significant growth in our international operations, despite regional socio-economic tensions, and we are pleased with the developments we have made across our key markets, specifically in the Kingdom of Saudi Arabia, Egypt and West Africa, as well as Afghanistan and Sri Lanka.”
Indeed, a Pyramid Research report said in 2010, telecoms companies, MTN, Globacom, Airtel, Etisalat and CDMAs, earned N1.3 trillion ($8.6 billion) in revenue from billing Nigerians for using their services.
The research firm predicted that revenues would hit N1.7 trillion ($11 billion) by 2013.
Meanwhile, The Guardian also learnt that in the early days of the GSM revolution in the country, some of the operators used to interconnect through NITEL’s primary exchanges, the interconnection circuit called E1, which are in Ikeja, Apapa, Iponri and particularly Saka Tinubu in Lagos.
A telecoms expert, who spoke to The Guardian said then, all the Private Telecoms Operators (PTOs) channeled their optic fibre to the Saka Tinubu NITEL exchange point and interconnect offering telecommunications services through micro wave technology.
“But that stopped. The operators complained that NITEL refused or was deliberately suffocating that link and subsequently, they stopped connecting through NITEL. Some of the operators, especially the GSM operators because of the peculiarity of their services got Mobile Switching Centres (MSC), where all their Base Transceiver Stations (BTS) are connected, by so doing giving them direct access in the country.
“Some of the reasons why they dropped NITEL’s service was because they had more traffic than what NITEL facilities can contain. They reported that NITEL couldn’t come up with enough Call Detail Records (CDR). It was difficult for operators to get justified CDR because NITEL users were few and they subsequently became hugely indebted to the operators. They couldn’t reconcile. So along the line, in the mid 2000s, NCC appointed a licensed Interconnect Clearing house to reconcile interconnect debts among operators. That act eventually killed the ambition of NITEL”, he stated.
Commenting on the richness of the Nigerian market, a former General Manager with NITEL, who rather preferred anonymity, said if government had done what it ought to have done, the several billions of dollars accruing to these private companies would have come to the Nigerian economy as the majority of their earnings are repatriated to their home countres.
“You can imagine, MTN Nigeria earning above N2 trillion within a decade of operating in the country. Bharti Airtel, which acquired Zain boosts its global earnings by 15 per cent from its African operations among others. Nigeria remains the market.
“However, I must commend them, they took a decisive risk. In its 2002 financial result, MTN reported a loss after tax of about N5.091 billion, but was able to turn this around by the next year by investing in an aggressive network expansion programme and so many others too. But I still believe that if government had been more proactive about NITEL, it would have been the gateway to Africa’s telecommunications network today. Is it the huge infrastructure, though in rot across the country now, the technical workforce, the expertise, among others that you want to talk about? Corruption, mis-management, too much government interference, policy inconsistencies were among the bane of NITEL”, he stated.
In March 2012, the government announced plans to liquidate NITEL and its mobile subsidiary M-Tel, which signals an end to the various attempts to privatise the company since 2001.
Indeed, the NITEL privatisation first began in 2001 when a strategic equity stake was sold to the International Investors London (IIL) consortium for $1.3 billion.
However, the bid was cancelled after IIL failed to pay the balance of the fee, with the consortium forfeiting its $131 million deposit.
In 2003, the Nigerian government appointed Pentascope, the telecoms consulting arm of Netherlands-based operator KPN, as part of a management contract with a view to eventually selling NITEL to KPN.
However, this effort also failed, with the contract terminated within a year amid allegations from Pentascope of mismanagement and incompetence, while the government cited a failure to meet performance and roll-out targets.
The privatisation of NITEL went through a number of additional bidding processes in 2007 and 2009, with bids ranging from $750,000 to $2.5 billion, and players such as China Unicom reportedly assessing the possibility of purchasing the operator.
The Guardian had exclusively reported last July that about N500 billion in various litigations, unpaid workers’ salaries and arrears, depleted assets and other “social challenges” had hindered the proposed liquidation in 2012.
Efforts to speak with the Bureau of Public Enterprises (BPE) spokesperson, Mr. Chukwuma Nwokoh, proved abortive, as he refused to pick several calls made to him.
He had told The Guardian last year that no news about NITEL yet, stressing that when there was any, “you will know.”
However, telecommunications experts, who spoke with The Guardian, differed on what it would cost to reposition and rehabilitate the troubled telecommunications firm.
According to Fola Ayeni, a retired telecommunications engineer, based in Abuja, more than N3 billion may be needed by government to rehabilitate about 20 moribund exchanges in some states due to neglect and years of disuse.
Ayeni, who said some of the exchanges with installed capacity of 24,000 telephone lines could still be viable if adequately reactivated, noted that the reactivation would entail the replacement of some damaged cables; purchase of several 500KVA generators as well as replacement of the air conditioning system, among others.
He said some vandalised exchanges in some particular locations had installed capacity of between 8,000 and 10,000 lines.
Indeed, a recent Nigerian Communications Commission’s (NCC) statistics currently put the number of fixed wired and wireless subscribers in the country at 432,899. The players, including NITEL, lost about 255,434 lines between January and November 2012.
Former Minister of Communications, Mr. Olawale Ige, who spoke with The Guardian, said if NITEL must be revived, government may need to ask from other countries’ national carriers, which started with NITEL and were still in operation, how they were able to survive.
Ige, an engineer, said Nigeria may seek the experience of firms, including British Telecoms and German telecommunications firm, to know their survival strategy.
The former minister, who said it may be difficult to ascertain the level of depreciation of NITEL’s assets in figures, noted that the telecommunications firm’s infrastructure had gone from bad to worse.
But if NITEL must be revived, Chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Mr. Gbenga Adebayo in an interview with The Guardian, said the telecommunications firm should be divided into various components to make it easy for would-be buyers.
According to him, NITEL in its heyday, especially in the nineties, enjoyed a huge market share; goodwill and government support, “but things changed drastically in the years after and it went like that till today. NITEL infrastructure have lost value. They have depreciated seriously. I can’t quantify that now, but they have lost value.
“NITEL is a large corporation, which I think is too big for one entity to purchase. For NITEL’s revival, government may need to split it into component parts. Switching board; backbone; transmission channels; submarine cables, among others, should be divided. With this, it becomes easier for would-be investors to put money. NITEL has exchanges in virtually all the local councils of the federation.”
Recently, an online telecoms platform—ItnewsAfrica reported that China’s Huwei had plans to invest in NITEL.
ItnewsAfrica said Huawei had planned to make a $627 million investment into the now-defunct NITEL.
The Platform quoted NITEL’s former Chief Operating Officer, Nicholas Okoye saying, “Had the corporation no sabotage by politicians and ridiculous litigations by state governments, which sued NITEL’s new owners Transcorp for its taxes dating as far back as 30 years, it would have been profitable.”
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