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INVESTMENT OPPORTUNITIES IN THE

TELECOMMUNICATION SECTOR
Nigeria is located in the region regarded to have the highest
level of international telephone traffic per subscriber. This is
estimated at over 200 minutes per year, but the overall level
of traffic per inhabitant is less than 1 minute. This suggests
that there is a pent-up demand that is not being met by the
existing supply of telecommunications services. The business
and investment opportunities in the sector are as follows

Huge, Untapped Market
!ith a population of 1"0 million people with improving
affordability, the mar#et potential for telecommunications
subscriptions and usage over the next few years is indeed
very great.

Profitabiit! of t"e Nigerian Tee#o$% Market
The Nigerian telecommunications mar#et, as is, is one of the
most profitable in $frica, and perhaps, the !orld. %or
instance, one of the Nigerian &'( companies declared full
profitability less than 1) months after service launch on
investments of over *'+,00m.

Pro&i%ion of Ser&i#e%
The need to meet up with the -T* standard led to the
deregulation of the industry by the Telecommunications law
of 1..2, which ushered in a new era. /rivate sector
participation and operation in one or more of the
deregulated telecommunications underta#ings is now
allowed. These are
'ales and installation of Terminal 01uipment2
/rovision and operation of /ublic /ay-phones2
/rovision and operation of /rivate Networ# 3in#s
employing cables, radio communications, or satellite,
within Nigeria2
/rovision and operation of /ublic (obile
4ommunications
54ellular (obile telephony, /aging, and Trun#ed
6adio72
/rovision and operation of 4ommunity
Telecommunication 56ural and *rban72
/rovision and operation of 8alue $dded Networ#9:ata
'ervices 5-nternet, 8oice (ail, 0lectronic (ail services72
6epair and maintenance of telecommunications
facilities, and
4abling 5e.g. Telephone-external and internal wiring for
residence, office etc.7.

Lo#a Manufa#ture of E'uip$ent
The local manufacture of switching and transmission
e1uipment is necessary to meet the desired expansion.
/resently, the country can only boast of local manufacture of
low pair capacity cables. Thus, there is the need for the
establishment of a plant to manufacture high pair cables as
well as fibre optic cables and other telecommunications
accessories.
;ther investment opportunities in the industry include
investing in any sub-sector of the industry such as
manufacture, and supply of e1uipment and accessories as
well as service provision. The industry<s si=e and growth
prospects are very high, thus ma#ing it a self-sustaining
sector.
!ith the deregulation of the industry, private sector
participation and operation is fully allowed in the
telecommunications underta#ings.
>owever, only corporate bodies registered in Nigeria and9or
Nigerian citi=ens can participate in telecommunications
service delivery. %oreign investment is encouraged through
?oint 8entures between the foreign investors and their
Nigerian affiliates.
-n addition to this, N44 licence should be obtained. The
licence may cover
The right to set-up and operate networ#s, and
The right to set-up operate and provide services for
third parties on commercial basis.
Ot"er (i)ed Nationa Operator%
i*+ Nationa Operator%
%ixed 'ervice National ;perators shall be licensed to
establish and operate telecommunications service facilities in
all the six 5@7 geographical =ones.
The functions include the following
To carry out the provision of 1uality service to its
subscribers and compliance with tariff regulations,
and
To carry out the responsibility of a National 4arrier as
a principal agent, trustee, contractor or otherwise
and, either alone or in conAunction with others.
To do all such things considered incidental or
conducive to the performance of that responsibility.
This category of operators includes the /rivate
Networ# 3in#s 5/N37 licences and is limited to
ownership and operation of facilities for domestic
services only.
ii*+ ,ona Operator%
$ fixed =onal operator shall be licenced to establish and
operate telecommunications services in one 517 of the 'ix
5@7 geographical =ones.
-ts functions include the following, among others
/rovision of 1uality services to its subscribers and to
comply with tariff regulations2
To carry out the responsibility of a National Bonal
;perators as principal agent, trustee, contractor or
otherwise and, either alone or in conAunction with
others. To do all such things considered incidental or
conducive to the performance of that responsibility.
iii*+ Mobie Ceuar Operator%
-n attaining the obAectives of liberalisation, globalisation,
economy of scale, effective national coverage as well as
efficient delivery and pricing, there shall not be more than
four 5"7 National 4ellular operators for the initial five 5C7
years.
The functions include the following, among others
To plan, develop, operate and administer the National
Networ#2
To provide service to all parts of the %ederation and
beyond2
/rovision of 1uality services to its subscribers and
compliance with tariff regulations2
To carry out the responsibility of a National 4ellular
;perator as principal agent, trustee, contractor or
otherwise and either alone or in conAunction with
others, to do all such things considered incidental or
conducive to the performance of that responsibility2
0stablishment and operation of international
telecommunications gateway for cellular traffic only, if
found necessary.
-t is worthy to note that another mobile cellular operator,
(ubadala :evelopment 4ompany, a *nited $rab 0mirate
base firm was recently licensed to provide nationwide
service. This is due to the fact that the initial five 5C7 years
free=e which commenced in 2001 has expired. There is
therefore room for additional mobile cellular operators
NOTE: The modalities for appointing the carriers shall be
competitive and transparent.

Te#"noog! -e&eop$ent% and Lo#a Manufa#ture
&overnment ensures that the Telecommunications
development follows the worldwide standard D the
establishment of digital or any other technology while
gradually phasing out the existing analogue system. 0fforts
shall be made to promote indigenous design and production
capability and manufacture of a substantial amount of the
components and sub-systems used in the
telecommunications services.