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Friday, 19 January, 2001, 17:42 GMT
Nigeria awards telecoms licences
A Nigerian woman using a mobile phone in Lagos
Wireless services are very limited in Nigeria
The Nigerian Communications Commission has finally awarded the country's mobile phone licences, raising more than $800m for the government in the process.

Each of the three successful bidders is now required to provide 100,000 lines within a year from this May.

The launch of the auction had come after several false starts and months of administrative turmoil.

And the problems that led to the sacking last year of the entire telecoms authority board amid allegations of corruption have been stopped, officials say.

Foothold

The global standard for mobiles (GSM) licences were sold at $285m each to local group Communication Investments, South African-backed Econet Wireless Nigeria and a group headed by South Africa's Mobile Telecommunications Network.

And these groups have far outstripped the minimum level acceptable to the government of just $100m for each licence.

Nigeria is Africa's most populous country with about 120 million inhabitants but has extremely limited wireless capacity in place.

Egypt's Orascom Telecom, one of the unsuccesful bidders, estimated the market for mobile phone users to be 30 million initially and said it would grow rapidly thereafter.

Dogged by problems

Five international groups put in bids for three GSM licences.

A fourth licence is being reserved for sale at auction price to Celcom - the recently renamed state-run operator.

The process of awarding licences, though, has been dogged by problems, leaving Nigeria's telecoms network several years behind those of nearby countries such as Ghana and the Ivory Coast.

Fixed telephone lines number fewer than four per thousand people while mobile phone penetration does not even register statistically.

Entire board sacked

One company, Motophone, was awarded a GSM licence by General Sani Abacha's government but the service was never launched.

The next regime sold 27 licences - far more than was ever technically or commercially feasible - but most of these were later cancelled.

More recently, an auction scheduled for last year was scrapped at the last minute and the entire board of the Nigerian Communications Commission - the body supervising the sale - was sacked amid allegations of financial irregularities.

Encouraging competition

In mid-2000, NCC chief executive Ernest Ndukwe hired the UK-government backed consultants Radio Spectrum International to devise and run a new auction.

Since then, several more senior NCC officials have been dismissed, the latest as recently as this month.

"There have been some changes [in the board's membership]," RSI's Peter Top told BBC News Online.

"[But] we have not encountered any problems [in setting up the auction]."

"[The NCC] is committed to achieving a licensing regime that will spur the rapid roll-out of digital networks and encourage competition," Mr Ndukwe is quoted on the NCC's website as saying.

The five bidders were:

  • Communication Investments, a group whose backers are reported to include Deutsche Telekom, Deutsche Bank and Dresdner Bank
  • South African-backed Econet Wireless Nigeria
  • MSI-Celtel Nigeria, a group reported to be backed by two former heads of state and also including US-based Monarch Communications and several private equity firms
  • South African-backed MTN Nigeria Communications
  • and United Networks Mobile, comprising Orascom and United Bank for Nigeria.

The licences will be valid for 15 years.

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See also:

13 Dec 00 | Business
Nigeria buys extra time for debt
20 Oct 00 | Business
London implicated in Abacha probe
10 Jan 01 | Country profiles
Country profile: Nigeria
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