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Recent Developments in Nigerian

Recent Developments in Nigerian

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Published by: deperfectstar on Aug 20, 2010
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.The Nigerian government has renewed its efforts towarddevelopment of the Nigerian telecommunications sector inline with international standards. A cornerstone of the newpolicy is the realization of Government’s of stated aim of making telecommunications services affordable to themillennium and utilizing state of the art telecommunicationsequipment for optimum reliability and efficiency.Against this background, in 1992 Government commencedthe privatization of certain activities, over which the NigerianTelecommunications Plc. (“NITEL”) hitherto held amonopoly. Through promulgation of the
NigerianCommunications Commission Decree No. 75 of 1992
,Government established the
Nigerian CommunicationsCommission (“NCC”)
and charged it with the function of regulating operations in the telecommunications industry.The Decree also privatized the following telecommunicationsoperations:
Installation of terminals and related equipment;Provision and operation of 
Public pay-phones;
Private network links, employing cable, radiocommunication and satellite, within Nigeria;
Public mobile communication links;
Community telephony;
Value-added networks (including e-mail, voice-mail,Internet services, paging etc.);
Repair and maintenance of telecommunicationsfacilities; and
Cabling servicesNITEL expectedly retained its monopoly over the PublicSwitched Telephone Network (PSTN) and Basic NationalVoice Telephony (BNVT) systems, thereby remaining thesole national carrier and operator of Nigeria’s international
gateway. However, a few licenses were granted to provideoperators for international carriage purposes, using satellitetechnology. These licenses are however in danger of beingrevoked following the Minister’s indication that the licenseswere improperly issued. Potential investors in any of theprivatized operations need to secure an appropriate NCClicense. Only Nigerian registered corporations are eligible toapply for and hold NCC licenses.To be eligible for a license, an applicant must be acorporation incorporated under Nigerian law. A Nigeriancorporation can be registered in three (3) weeks or lessunder the Nigerian Companies and Allied Matters Act, Cap69, Laws of the Federation of Nigeria, 1990. Theincorporation application, which is to be made on thestructure of the company, its shareholders and directors.Each Nigerian company must have at least two shareholdersand two directors. In the case of foreign equity involvement,a further application to Government agency known as theNigerian Investment Promotion Commission for registrationis also required. Work permits for expatriate works inNigerian companies can be relatively easily obtained.The holder of an NCC license to engage in atelecommunications operations must co-operate with NITELand the
National Frequency Board
for the purpose of achieving inter-connectivity with NITEL’s existing publicphone network, Satellite channel and frequency allocation.Although, a licensee is nominally given a right tointerconnection,this right is subject to reaching an agreementwith NITEL as to terms and conditions of suchinterconnection.Where a licensee is unable to agree with NITELupon agreement terms, the NCC is empowered to act as anarbitral panel for the purpose of resolving such dispute.Recently, the
Public Enterprises (privatization and
Commercialisation) Decree No. 28, 1999
, waspromulgated. The Decree included NITEL among the list of companies to be partially privatized. Under the Decree, thepost-privatiisation structure of NITEL (which is currentlywholly-owned by Government) will be as follows:
Maximum strategic investor participation – 40%
Maximum Federal Government participation – 40%
Participation by Nigerian individual – 20%In pursuit of Government’s efforts to ensure a vibranttelecommunications sector, a workshop on the “NationalPolicy on Telecommunication for the Next Millennium” wasrecently held in Abuja, Nigeria. Following therecommendation of the participants at the workshop a newNational Policy on Telecommunications was formulated.Under the new policy, NITEL is to be subjected to the fullcontrol of the Nigerian Communications Commissionsthereby placing the company on the same regulatorypedestal with other private operators.Highlights of the new policy include the following:i) Appointment of 4 (four) GSM operators for an initialperiod of 5 years;
Appointment of another National Carrier to competewith NITEL in the provision of PSTN and BNVTservices (with a possibility of appointing a third carrier based on economic viability);
Prescription of a US$100 million (One Hundred MillionUnited States Dollars) license fee for GSM licenses;
Establishment of a National Frequency ManagementBoard to plan, co-ordinate and monitor the allocation of the national radio frequency.The policy envisages the provision of 2 million fixed linesand 1.2 million mobile lines within 24 months of its operationwith a view surpassing the ITU standard of 1:100 minimumteledensity. Accordingly, the policy set specific targets to beachieved by any company, which may e granted a license to

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