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'Not Party Time Yet' as Nigeria grapples with telecommunications reform
Unformatted Document Text:  “Not Party Time Yet”: Nigeria grapples with Telecommunications Reform 2 Background Liberalization of the telephone industry in Nigeria was expected to dramatically improve access, generate cash for the government, and develop a telecommunications manufacturing base. Nigeria hoped that it would replicate liberalization results in other parts of the world such as India and Chile. India’s present manufacturing base was largely developed through the attraction of foreign investors such as AT & T, US West, Bell South, Motorola, and France Telecom (Mody, 1995). In Chile, liberalization dramatically improved access rates to 11:100 and competition, involving foreign interests such as Bell Atlantic (now Verizon), Bell South, and Southwestern Bell helped turn Chile into the leading telecommunications nation in South America (Hudson, 1997). This essay evaluates the Nigerian case by reviewing the Nigerian telephone industry history, the 1992 liberalization decree, and the reform activities that followed. In addition, it evaluates whether the goals of access, generation of cash, and development of a manufacturing base have been achieved in a liberalized environment. Review of Industry History Nigeria’s telecommunications market has been dominated by government ownership that goes back to the colonial days. The first telephone lines were designed by the colonial administration to help the political administration of the Nigerian colony, with very few lines installed to serve residential needs of Nigerians (Alabi, 1996 and Onwumechili and Okereke-Arungwa, 1999). Ajayi, Salawu, and Raji (1999) point out that the first telephone service in Nigeria began in 1886 when a cable connection was established between the colonial office in London and Lagos. They noted that the service spread to government offices in Lagos seven years later and then to cities such as Ilorin and Jebba. Telephone lines at the time were seen as essential to national security and a natural monopoly that needed to be under government control. The first commercial line service was not established until 1923 when cable was laid between Itu and Calabar (Ajayi, Salawu, and Raji, 1999). Even these commercial lines were government

Authors: Onwumechili, Chuka. and Okereke-Arungwa, Joy.
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background image
“Not Party Time Yet”: Nigeria grapples with Telecommunications Reform
2
Background
Liberalization of the telephone industry in Nigeria was expected to dramatically
improve access, generate cash for the government, and develop a telecommunications
manufacturing base. Nigeria hoped that it would replicate liberalization results in other
parts of the world such as India and Chile. India’s present manufacturing base was
largely developed through the attraction of foreign investors such as AT & T, US West,
Bell South, Motorola, and France Telecom (Mody, 1995). In Chile, liberalization
dramatically improved access rates to 11:100 and competition, involving foreign interests
such as Bell Atlantic (now Verizon), Bell South, and Southwestern Bell helped turn Chile
into the leading telecommunications nation in South America (Hudson, 1997). This essay
evaluates the Nigerian case by reviewing the Nigerian telephone industry history, the
1992 liberalization decree, and the reform activities that followed. In addition, it
evaluates whether the goals of access, generation of cash, and development of a
manufacturing base have been achieved in a liberalized environment.
Review of Industry History
Nigeria’s telecommunications market has been dominated by government
ownership that goes back to the colonial days. The first telephone lines were designed by
the colonial administration to help the political administration of the Nigerian colony,
with very few lines installed to serve residential needs of Nigerians (Alabi, 1996 and
Onwumechili and Okereke-Arungwa, 1999). Ajayi, Salawu, and Raji (1999) point out
that the first telephone service in Nigeria began in 1886 when a cable connection was
established between the colonial office in London and Lagos. They noted that the service
spread to government offices in Lagos seven years later and then to cities such as Ilorin
and Jebba. Telephone lines at the time were seen as essential to national security and a
natural monopoly that needed to be under government control. The first commercial line
service was not established until 1923 when cable was laid between Itu and Calabar
(Ajayi, Salawu, and Raji, 1999). Even these commercial lines were government


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