Investment Opportunities in the Communications Sector

COMMUNICATIONS SECTOR

The deregulation of the telecommunications sector in 1992 through Decree 75 was to allow for private sector participation in the sector and expand the nation’s communication facilities. The Nigeria Communications Commission (NCC) was established consequently to regulate the performance of the sector. The liberalization thrust was further strengthened by the Nigeria Communications Commission (Amendment) Decree No. 30 of 1998 which deleted those provisions in the first decree that inhibited competition in the sector thus enhancing the expected role of private sector enterprises.

The functions of Nigerian Communications Commission include:

  • Regulating the privatized sector of the telecommunications industry.
  • Facilitating entry into the telecommunications market by private entrepreneurs.
  • Creating a regulatory environment for the supply of telecommunications equipment and facilities.
  • Issuing of telecommunications licenses.
  • Promoting fair competition and efficient market conduct among all players in the telecommunications industry.
  • Arbitrating disputes between participants in the telecommunications industry and protecting consumers against unfair practices.

 

INVESTMENT OPPORTUNITIES IN TELECOMMUNICATIONS INDUSTRY IN NIGERIA

 

 LOCAL MANUFACTURE OF EQUIPMENT

The telecommunications industry in Nigeria is far from being developed. There is a dearth infrastructural facility, and this has placed a constraint on the provision of services to existing and potential customers. There is therefore an urgent need to expand the infrastructures in this sector if it is to effectively play its role in the economic, social, political, cultural and in fact overall development of the Nigerian society and properly integrate it into the international community. Such desired expansion cannot be achieved under the present dispensation where the needed equipment is usually imported with attendant problems of foreign exchange procurement, freighting cost, long delivery period etc. There is therefore no other realistic option than the local manufacture of these equipment and spares.

SWITCHING AND TRANSMISSION EQUIPMENT

Local manufacture of switching and transmission equipment is required since no single company exists in Nigeria or even neighboring countries for this purpose. Hence any company that goes into the venture will have its market beyond the frontiers of Nigeria.

CABLES

In Nigeria, there are three companies engaged in the production of telecommunication cables using imported copper and other local resources like poly vinyl chloride materials for insulation. There is no company that is currently producing fiber optic cables in the country.

The copper cable producing companies are producing only low pair capacity of 50, 100, 200 pairs. There is need for a plant that will produce high pair capacity cables that will enhance massive provision of lines to the teaming population.

FACILITIES AND SERVICES PROVISION

With Nigeria’s population that is over 108 million people, an installed telephone capacity of about 700,000 lines and a telephone penetration of 0.65 lines to 100 persons, it is abundantly clear that telephone service to the populace is grossly inadequate. Even with the Government introduction of competition in the sector and the subsequent licensing of Private Telecommunications Operators. (PTOs), the market has not experienced any noticeable change. Although some of the PTO’s have commenced operation for over two years, they have not been able to collectively introduce up to 100,000 telephone lines into the country’s telecommunications network.

Hence, the sector is still a virgin land for investors wishing to provide and operate private network links employing cable, radio communications, data services, INTERNET Business and Satellite communication, Payphone services and Cellular radio phone services.