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Telecoms Race For Nigera (2)

Why Now?
Still, the profits are alluring enough to make some companies look past the hassles of doing business in Africa. Nigeria had 9.1 million mobile subscribers at the end of December 2004, according to the Nigerian Communications Commission. That represents growth of 180 percent over the prior year. The International Telecommunications Union, the United Nations agency that regulates telecom worldwide, claims that mobile subscriptions in Africa grew by more than 1,000 percent between 1998 and 2003. The ITU now estimates that the continent has 67 million mobile cellular subscribers. Still, in sub-Saharan Africa, only four out of every 100 people have a mobile phone. That?s a lot of room to grow, and a lot of business to compete for.

Indeed, the competition in Nigeria is fast and furious. In 2001, the state auctioned four GSM licenses for $285 million each. The winning bids came from South Africa?s MTN, Nigeria?s state-run Mtel, and two homegrown companies, Glomobile and V-Mobile. The four telecom companies are angling to expand GSM beachheads in Nigeria?s still largely untouched market, while others are clamoring to get in. MTN, the largest mobile carrier in Africa, dominates Nigeria with 42 percent of all subscribers in 2004. That number, however, represents a 10 percent drop from the prior year as Glomobile and Mtel have been gaining ground on MTN. The money at stake remains huge. MTN earned a profit of $1.1 billion from its Nigerian operations in 2003.

With profits like that, it?s not surprising that the GSM licenses fetched the sums they did back in 2001. The fact that the global telecom industry generally deemed the auction kosher was no small matter. It?s not exactly the sort of information a national trade ministry would highlight on its brochures, but over the last two years Nigeria has gone from being the world?s most corrupt nation to the sixth-most, according to Transparency International, a non-governmental organization in London that monitors corruption worldwide. While sixth-most corrupt nation on Earth is hardly high praise, it does reflect a growing openness in Nigeria that mirrors anecdotal observations from outsiders seeking to do business in the country.

In a fast-moving market like Nigeria?s, transparency is critical. For example, Nitel, the country?s national telecom, is up for sale. In the running to buy the carrier is MTC Celtel, a Kuwaiti-owned mobile company that already has operations in 13 African countries, including Uganda, Kenya, and the Democratic Republic of Congo. ?If Celtel gets into Nigeria, things will heat up,? says Tope Folayan, director of business development for Pan-African Telecom, a Sacramento, California-based company aiming to become the Nextel of Africa.

Resumos Relacionados

- Mobile Phones Help Fight Poverty In Africa

- About Mobile Phones

- Democracy And Political Life In Nigeria

- New News Out Of Africa: Uncovering Africa's Renaissance (w.e.b. Du Bois Institute)

- New News Out Of Africa: Uncovering Africa's Renaissance (w.e.b. Du Bois Institute)

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