Relevance Of Global System For Mobile Communication To Business In Nigeria

Project and Seminar Material for Business Administration and Management BAM

Project and Seminar Material for Business Administration and Management BAM

Chapter One


1.1 Background Of The Research

Telecommunication arrived in Nigeria over 100 years ago. At independent in 1960, the country only had about 18, 724 phone lines for the use by a population of roughly 40 million from independence, various government made several attempts to increase the number of lines in Nigeria. However, these attempts failed woefully due to certain reasons, chiefly amongst those are monopoly of this sector by the country’s public utility. Nigerian Telecommunication Plc, NITEL and its inept corrupt management.

By the beginning of 1999, there were roughly 500,000 lines available for a population of around 120 million Nigerians.

The present administration of chief Olusegun Obasanjo broke the barrier of telecommunication by adopting deregulation through privatization. This it achieved by auctioning licenes for Global system for mobile (GSM) companies in January 2001 for $286 million each and further reserved a licence for NITEL.

However, only two (2) out of the three (3) companies at the auction, MTN Communications and ECONET Wireless were warded full GSM licences, the third a successful company at the auction, communication Investment limited (CIL) was refused alicence on the growth that two digital mobile licensed operating – ECONET and MTN who embarked on vigorous publicity drive to catch the large market in the country. Thus, the recent announcement by the operators of plans to commence operations by 7th and 8th August by ECONET and MTN came as much awaited news by many Nigerians.

The journey to success in Nigeria telecommunication milleu has been long and tortours. Telecommunication facilities in Nigeria were first established in 1886 by the colonial administration.

Between 1960 and 1985 the telecommunication sector consisted of the department of posts and telecommunications sector was (grossly underdeveloped) in charge of the internal network company the Nigeria external telecommunication (NET) limited, responsible for the external telecommunications services. NET provided the gateway to the outside world. the installed switching capacity at the end of 1985 was about 200,000 liens as against the planned target of about 460,000 all the exchanges were analogue. Telephones penetration remained poor equaling telephone line to 440 inhabitants, well below the target of 1 telephone line to 100 inhabitants recommended by ITU for developing countries. The quality of services was largely unsatisfactory. The telephone system was unreliable, congested expensive and customer unfriendly.

Arising from the foregoing in January 1985, the erstwhile post and telecommunication (P & T) department was split into postal and telecommunication divisions. The latter was merged with NET to form Nigerian telecommunications limited (NITEL), a limited liability. The main objective of establishing NITEL was to harmonise the planning and coordination of the internal and external telecommunications services, rationalize investment in telecommunications development and provide accessible efficient and affordable services.

Almost 46 years down the line, the Nigeria telecommunication lines available are roughly ever million to the 120 million people in the country.

1.2 Significance Of The Research

the significance of this research work are numerous, but I will like to focus on these:

  1. To enlighten the public on the usefulness of globalization of mobile communication to them.
  2. To expand people’s view on the operations of the various telecommunication services in the country.
  3. It is also meant to teach corporate bodies the relevance of GSM to their operations and business.
  4. Its relevance to the society as a whole.

Apart from the above mentioned significance of the research work, it is also for the general understanding of ways and areas which GSM affect the business world in the country.

Furthermore, it penetrates on the emergence of high profitability that accompany GSM communication in Nigeria. Most business and other opportunity that accrue to firms are easily tapped into, due to the fact that there is a cheaper and easy means to reach and exploit them profitability.

The disadvantages were not left out in this work. The tariffs charged by these operators are too high in Nigeria, compared to the tariff of other countries in which they operated. Another strong weak side of GSM is that their poor network coverage to reach people in the remote parts of the country. Most of these service providers do not reach for into some parts of the country which has been hampering their services from been qualified as fully efficient.

Another main set back of this study is the “network failure” syndrome. This is a common problem faced by customers of the PTO’s. There are several cases of network fluctuation on phones because these service providers are really focused on making back their license fees, so they are majorly targeting their capital and profit while the customers are left at the mercy of unsatisfactory services.

1.3 Objectives Of The Research

The objectives of carrying out this research is exclusively for academic purpose. Notwithstanding, the objective also spread across its tentacles beyond the academic purpose.

Another objective of this work is to fully discuss the anomalies in the telecommunication sector even with the emergence of the PTO’S and try to suggest a lasting solution that will actualize the relevance of GSM communication to the business world in Nigeria.

The level of competition brought about is the telecommunication sector of this country is due to the advent of GSM.

Another strong point is how the introduction of GSM has been amass employer of labour and also an opportunity for some people to discover their strength (GSM engineers).

It is also an eye opener to the fact that the preceeding service providers before GSm, offerd little or no service compared to what we have now. NITEL was the major provider of telecommunication service in Nigeria there was no competition so through people complain of the service they offer, but they still continue to patronize them.

1.4 Definition Of Terms

  • GSM:- Global system for mobile
  • ICT:- Information and communication technology
  • NCC:- Nigerian communication commission
  • NET:- Nigerian external telecommunication
  • CIL:- Communication investment limited
  • ITU:- International telecommunication unions
  • NITEL:- Nigeria telecommunication
  • IT:- Information Technology
  • ISP:- Internet service provider
  • GMPCS:- Global mobile personal communication service.
  • FWA:- Fixed wireless access
  • PTO:- Private telephone operator
  • SNO:- Second national operator
  • FTS:- Fixed telephone services
  • LAN:- Local area network
  • SIM:- Subscriber identify mobile
Short Message Service (SMS)

This allows customers to send and receive text message via their phones. Alerts will sound on handsets informing customers that a message has been received.

International Roaming

International roaming is probably the service feature that has the greastest value for international users of mobile telecommunications. It enables customers or subscriber of GSM networks to make calls to and from other countries, across scores of GSM networks worldwide.

Customers in Nigeria will thus benefits from the many roaming agreements already reached between the world’s GSM operators. Visitors to Nigeria with a Gsm account helped outside the country will also be able to use their phones here during their staying.


This is the common name used to refer to the telephone or better still the mobile phone.


These are the actual cost of the calls made. This simply means cost of airtime usage. For example N50 per airtime minute.

Access Period

This means how many days you can receive unlimited incoming calls.

Peak Period

This means the time when many subscribers are accessing the network. The time range is usually 07 hrs:00:00- 18hrs: 59:59.

Off Peak Period

This means the time when fewer subscribers are accessing the network. It is the opposite of peak period. The time range is usually 19 hrs:00-23hrs:59:59 also 23hrs:59:59-04hrs:00:00.

Pay As You Go

A versatile cellular package that gives you freedom of choice and freedom of movement. It offers immediate access to the GSM network through an access and airtime card that gets you connected quickly. It means that you are in control of you connected call cost. You buy the amount of call credits and cellphone call cost. You buy the amount of call credits and access time you want and pay for it in cash-before you make calls. This way you will never be faced will bills after your call.

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