CHAPTER ONE

1.1 Backgroundof the Study

Telecommunications facilities in Nigeria which were first established in 1886 by the then colonial administration. These were geared towards discharging administrative functions rather than the provision of socio-economic development of the country. Between 1960 and 1985 the telecommunications sector consisted of the Department of Posts and Telecommunications (P&T) in charge of the internal network and a limited liability company, the Nigeria External Telecommunications (NET) Limited, responsible for the external telecommunication services. NET provided the gateway to the outside world. Telecommunications development during this period is characterized by serious short-falls between planned targets and their realization, principally because of poor management, lack of accountability and transparency and low level of executive capacity. Telecommunications department was split into Postal and Telecommunications Divisions. The later was merged with NET to form Nigerian Telecommunications Limited (NITEL), a limited liability company, while the Postal Division was reconstituted into another organization called the Nigeria Postal Service (NIPOST). The main objectives of establishing NITEL were to harmonize the planning and co-ordination of the internal and external telecommunications services, rationalize investment in telecommunications development and provide accessible, efficient and affordable services.

In 1998 the Ministry of Communications published the National Policy on Telecommunication under the President of the Federal Republic of Nigeria and Commander-in-Chief of the Armed Forces; Chief Olusegun Obasanjo, who then inaugurated a committee on telecommunications policy for Nigeria. This approved National Policy on Telecommunications was launched in October 1999. The policy was generally well-received in order to promote the policy goals of total liberalization, competition and the private sector-led growth of the telecommunications sectors. The chairman of the National Council on Privatization (NCP), Vice President Atiku Abubakar inaugurated a 22 member Telecommunications Sector Reform Implementation Committee (TSRIC) on 1st February 2000, to enhance domestic and universal acceptability in the anticipated new environment. The committee was encouraged by the National Council on Privatization to review the policy.

1.1.1 Policy Objectives of National Telecommunication

The general objectives of the National Telecommunication Policy (NTP) are to achieve the modernization and rapid expansion of the telecommunication network and services. This will enhance national economic and social development and integrate Nigeria internally as well as into the global telecommunications services that should, accordingly, be efficient affordable, reliable and available to all. The rapidly changing nature of technology in telecommunications makes it difficult to set long term policy and medium term policy objectives.

Short-Term Objectives of National Telecommunication

§     To develop and enhance indigenous capacity in telecommunications technology.

§     To ensure that the government divests its interest in the state owned telecommunications entities of Nigeria.

§     To review and adopt telecommunications laws in order to bring all telecommunications operators under the regulatory control of Nigeria Communications Commission.

§     To promote competition to meet growing demand through the full liberalization of telecommunications market.

Medium-Term Objectives of National Telecommunication

§     To protect the integrity, defense and the security of the state and its citizens.

§     To encourage Nigerian telecommunications operating Companies to become global leaders in the industry.

§     To meet telecommunications service needs of the social, commercial and industrial sectors of the economy.

§     To create enabling environment.

§     To encourage domestic production of telecommunications equipment in Nigeria and development of related software and services.

1.3Statement of the Problem

The adoption of the (GSM) Global System of Mobile Communication in Nigeria is a long awaited development expected in the telecommunication industry. It is expected that its introduction will bring about effective telecommunication services that will support good speech quality, employment, roaming, spectral efficiency, and minimized crosstalk, just to mention few items. Its deployment into the market was well embraced by Nigerians and found to be relatively efficient. But this efficiency is now being hampered by some factors leading to the degradation in growth and services offered by these operators. In view of this statement, this work is geared towards the assessment of selected factors affecting the growth of Tele-density in Nigeria using official statistical data.

1.3 Objective of the Study

The broad objective of the study is to examine the impact of selected factors affecting Tele-density in Nigeria. The specific objectives include:

(1)             Identification of factors with statistical data

 (As facts and figures) for numerical analysis.

(2)             To examine the impact of telecom subscribers on Tele-density growth in Nigeria.    

(3)             To examine the impact of private investment on Tele-density growth in Nigeria.

(4)             Making policy recommendations on the basis of findings of this study.

1.5Research Questions:

Based on the statement of problems and the objectives of the study, the researcher posed the following questions to himself:

1.     What are the factors affecting Tele-density with statistical data (facts and figures) for numerical analysis.

2.     To what extent do telecom subscribers affect the Tele-density growth in Nigeria?

3.     To what extent does private investment affect Tele-density growth in Nigeria?

4.     What policy recommendations can be made on the basis of the findings of this study?

These questions are to be answered on the basis of this study.

1.5 Research Hypothesis:

Hypothesis is an idea or the explanation of something that is based on a few known facts but that has not yet been proved to be true or correct.

Therefore, based on the nature of this work the researcher formulated the following hypotheses to guide the study.

H01 = Number of telecom subscribers has no significant impact on Tele-density growth in Nigeria.

HA1 = Number of telecom subscribers has significant impact on Tele-density growth in Nigeria.

H02= Private investment in telecom has no significant impact on the Tele-density growth in Nigeria.

HA2= Private investment in telecom has significant impact on the Tele-density growth in Nigeria.

H03 = Number of telecom subscribers and private investment in telecom collectively have no significant impact on Tele-density growth in Nigeria.

HA3 = Number of telecom subscribers and private investment in telecom collectively have significant impact on Tele-density growth in Nigeria.

1.6 The Significance of the Study

The importance of any research is tied to find out solutions to the various problems that face mankind in the environment or society. The findings of the study will create awareness to every citizen of this country and economic planners on the impact of Telecom subscribers and private investment as it affects the Tele-density growth in Nigeria.

The findings will help policy makers to assess the performance of Mobile Operators in the country following the NCC (Nigerian Communication Commission) policy. They will also help researchers on contemporary issues to have a first-class knowledge of the performance of all the mobile operators in Nigeria.

1.7 The Scope and Limitations of the Study

Notwithstanding that there are other players in the telecommunication industry in Nigeria such as the internet service providers (ISP), fixed and wireless providers such as visafone, starcomms etc. the researcher just concentrated on the four leading players which include Mtn, Globacom, Etisalat and Airtel.

Based on this, the scope and limitations of this study is limited to the Impact of telecom subscribers and private investment as it affects the growth of Teledensity in Nigeria i.e. (among these four leading service providers), which was enhanced as a result of the adequate service providers to the public which are the major benefactors of their services.