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Monday, 4 June, 2001, 15:50 GMT 16:50 UK
Nigeria doubles phone charges
Street scene in Nigeria
Nigerians are expected to give the price rises a hostile reception
By the BBC's James Whittington

The Nigerian government has waved through plans by the state-owned telephone company, Nitel, to double the cost of ordinary telephone calls.

Other phone charges will also rise. It's likely to get a hostile reception from Nigerians from all walks of life - but they may get their own back when monopolistic Nitel faces competition later in the year.

After decades of underinvestment and poor service, Nigeria's monopoly fixed-line operators's business is in a pitiful state.

Nigeria is one of the world's most underserviced telecoms markets. And Nitel has only around 700,000 telephones connected for a country of more than 120 million people.

Positioning for traffic growth

The monopoly company now faces competition from two mobile operators later this year following the successful auction of GSM licences.

The two new operators are the South African company MTN and Zimbabwean Econet. There are also plans for a new fixed-line operator.

Analysts say that Nitel is positioning itself to profit from the growth in local call traffic expected when the mobile phone services are introduced later this year.

It stands to gain from interconnection fees and increased internet use.

Backlash expected

Nitel said it was restructuring its fees to prepare for privatisation which it hopes will be possible later this year.

But the price rises are expected to lead to a backlash from long suffering Nigerians who endure a daily struggle to make a phone call.

Earlier this year, there were protests erupted when the government tried to raise the price of petrol above the heavily subsided levels.

No date has been announced as to when the new telephone rates will take effect.

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See also:

25 Apr 01 | Business
Nigeria's currency battle
19 Jan 01 | Business
Nigeria awards telecoms licences
17 Jan 01 | Business
Nigeria kicks off telecoms auction
20 Apr 01 | Country profiles
Country profile: Nigeria
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