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THE ECONOMY IMPACT OF THE DEREGULATION OF THE TELECOMMUNICATION INDUSTRY IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1  Background of the Study

In most countries, telecommunications services historically have been provided by a state-owned monopoly (Evan et al 2005). Countries throughout the world are, however, rapidly liberalizing the provision of telecommunications within their borders.  Evan et al (2005) further posit that although deregulation does not create competition overnight, in countries that have deregulated telecommunications services, there have been clear benefits: prices for these services have fallen, customer service has improved, innovation has increased, and more advanced infrastructures have been built. Businesses have a vested interest in ensuring that telecommunications services are provided competitively. First, businesses are major consumers of telecommunications services and therefore receive a direct economic benefit from lower telecommunications prices and better service. Second, businesses that have affordable access to advanced telecommunications technologies are better able to compete in the increasingly global economy. Finally, the development of an advanced telecommunications infrastructure will give consumers better access to the products and services that the businesses sell.

 However, the Nigerian state, immediately after Independence was just beginning to start  her journey into development(Chidozie et al 2015).To undertake this journey, the government intervened and established its presence significantly in the economy. This was prompted by the fact that government was perceived to be a driver of economic development, expected to provide infrastructure and services, provide capital that could not be afforded by the private sector which was still undeveloped to take advantage of market opportunities. As a result, government established State Owned Enterprises (SOEs) in various sectors of the economy such as petroleum, telecommunications, power, aviation, steel, media and transportation.

The management of such extensive public structure was facilitated by the oil boom of the 1970s and 1980s (Jerome 2008). However, these SOEs proved detrimental to the economy of Nigeria, as they were characterized by poor performance due largely to gross mismanagement; were in precarious financial position with huge debts and losses. This made them heavily dependent on financial support from the government, through direct and indirect means such as grants, discounted loans and monopoly privileges. Adoga (2008) described the state of SOEs thus: At the same time, annual profit of these corporations plummeted due primarily to corruption and inefficiency, excessive bureaucracy, defective ownership structures, gross incompetent ,mismanagement, complacency, defective capital structures, lack of effective control and supervision by the government, outdated technology, nepotism, international competition e.t.c .

By mid-eighties, the international crash in oil prices, due to oil market glut resulted in reduced income for Nigeria, and the usual huge amount being pumped into these corporations could no longer be sustained by the government. The Structural Adjustment Program (SAP) designed by International Financial Organizations (IFO), specifically the World Bank and the International Monetary Fund (IMF), to help Nigeria and other African states out of the economic crises they faced was centered on the deregulation of the economies of these countries.

In effect, the deregulation of the Nigerian economy began in 1988 with the creation of the Technical Committee on Privatization and Commercialization (TCPC), to oversee the privatization program. From 1988-1993 when the program was suspended, TCPC had privatized 55 firms. Deregulation of the Nigerian economy was intended to serve as a tool of development and undoubtedly, some level of development have been recorded such as increase in profitability as most privatized companies have generated income for the government in form of taxes, better quality of goods and services provided. However, all these meet the criteria of development from an economic perspective. Other socio-economic indicators of development like inflation rate, per capita income, poverty and unemployment have not witnessed any improvement so far. More so, majority of the private companies that were allowed into the sector are Multi-national Companies (MNCs). The implication of this is that the vital sector of telecommunication in Nigeria is being dominated, indeed hijacked by foreign companies. In other words, the means of production and labour are controlled by foreigners and a few elites. This move is akin to colonialism by the West, when the whites controlled the affairs and ruled Nigerians via traditional rulers. However, this time, it is quite subtle and engages the use of economic instruments. The most suitable term for this condition is imperialism of which Griffiths, O’Callaghan and Roach argue: A policy aimed at conquering or controlling foreign people and territory-an imperial state that seeks to derive benefit of some sort from those states or peoples unable to defend themselves against its superior-economic force.

(Griffiths, O’Callaghan and Roach 2008 ).

The Nigerian Telecommunication sector was one of the sectors that experienced deregulation. Hitherto, the sector was made up of the Department of Posts and Telecommunications (P&T), in charge of the internal network and a limited liability company, the Nigerian External Telecommunication Limited (NET) responsible for external telecommunication services. It metamorphosed into NITEL in 1985 and on the heels of the privatization policy of the Olusegun Obasanjo administration in 1999 other private telephone operators became key players in the industry. Consequently, by 2007, the total number of telephone lines in the country had risen from 450,000 to 38 million and 85 million by 2010, due to the introduction of mobile network, and this huge success has been accredited to the effort of privatization in the sector (Ijewere and Gbandi, 2012; Okonjo-Iweala, 2012).

This success recorded in the deregulation of the telecom industry had ripple effects on the Nigerian economy, catalyzing development in other sectors of the economy such as agriculture, health, tourism and education. However, as stated earlier, these developments can be said to be superficial, satisfying only the economic criteria of development, and has become a tool of imperialism by the West, as the sector is currently dominated by foreign Multinational Companies(MNCs).

The first telecommunication facility in Nigeria was a cable connection between the colonial office in London and Lagos established by the colonial administration in 1886. Telephone services were later made available to government offices in 1893, and later extended to the hinter land such as Ilorin and Jebba. The first commercial trunk telephone service  between Calabar and Itu was established in 1923; a steady development of telecommunication in the country thus began. A three-channel line carrier system between Lagos and Ibadan was commissioned and later extended to Benin, Enugu, Kano, Kaduna, Kano and Osogbo; this took place from1946-1952 (Ajayi et al 1999).The equipments used were changed- small to medium capacity systems that employ the use of VHF and UHF radios were introduced, and also the use of Stronger exchanges as against manual pegboards. These telecom infrastructures were put in place by the colonial masters and they were intended to help in administrative functions and not mainly for socio-economic development of the country (Ajayi et al 1999).

At independence in 1960, there were only 18,724 phone lines available to a population of about 40 million (Ijewere and Gbandi 2012) and this was grossly insufficient. In the face of this reality, four national development plans were executed towards the improvement of the current state of the network and infrastructure, and they were supervised by the Ministry of Communications. Some of the intended objectives were: installation of additional telephone lines, expansion of trunk dialing facilities to link the major urban centers, and the establishment of an institution in the sector Nigerian External Telecommunications (NET) Limited (Ajayi et al, 1999).

These objectives were not totally achieved, but some level of improvements were recorded such as, the connection of major cities via microwave radio transmission system, the establishment of NET, increase in the number of lines in the telephone network from 52,000 to 241,000 lines, building of satellites that boosted external coverage, a microwave link connecting Nigeria and Benin Republic, and installation of an International Telephone Switching Center (ITSC). There were certain factors that limited the development of the telecom sector at this period such as inadequate funds, poor coordination of projects, interruptions such as the civil war of 1967-1970, and insufficient skilled labour force to manage the additional equipments.

Up until 1985, the institutions in the telecommunication sector were the Department of Posts and

Telecommunications (P&T) which was responsible for the internal network; and the Nigerian External Telecommunication (NET) Limited, which was a Limited Liability Company responsible for the external network. In 1985, the Posts and Telecommunications Department was separated into the Postal and Telecommunications sections, and the telecommunications sector was merged with NET to form Nigerian Telecommunications Limited (NITEL), which also became a Limited Liability Company. NITEL was established to supply to the Nigerian state efficient telecommunication services, and this required sufficient resources - financial and technical, as well effective planning and co-ordination, as it was to merge the responsibilities of planning and coordinating internal and external telecommunications, and ensure these services were affordable and accessible (Ijewere and Gbandi, 2012). NITEL was able to provide 60% of the N12 billion that was invested in the provision of certain infrastructures such as digital exchanges and transmission links, from internally generated revenues. This was a big credit to the institution.

The institution also engaged in Research and Development (RD) to develop system components that suit the environment, develop solutions to technical problems and introduce new services. In 1993, NITEL introduced the voice mail, the paging system, trunked radio and phone card. The Integrated Services Digital Network (ISDN) ensured the availability of services such as electronic mail, video telephone, telefax and many more. NITEL was also able to provide telecommunication services to local governments in the country (Odukoya, 2007).

However, NITEL was faced with problems of corruption, mismanagement, inefficiency in service delivery in terms of quality; the telephone system was congested, erratic, non-customer friendly and expensive. The immediate result of these was the public outcry for state intervention to remedy the epileptic telephony services of NITEL.

Consequently, the Decree of 1992 led to the establishment of the regulatory body in the sector- Nigerian Communication Commission (NCC) as part of state reaction to the challenges of NITEL. The NCC commenced operation in 1993 with the inauguration of the first commission, however full deregulation began in 2000. The NCC was charged with the responsibility of monitoring the evolution of competition in the sector, preventing hostility against new entrants by those already existing in the market, and protection of the public against the manipulation of the market by the firms via practices such as inflated prices, reduced quality and quantity of services provided (Sodiq et al 2011). The NCC is also in charge of licensing telecommunications operators, engendering of private sector participation and investment, tariff regulation, interconnection disputes, supervision of technical and operational standards and practices for network, and other matters affecting the industry; and it is meant to perform these functions without bias and with all sense of autonomy, on the basis of transparency, equity and fairness. The NCC granted licenses to three GSM service providers in 1999- Econet, MTN and MTel, a Second National Operator in 2002, which is Globacom, and another operator in 2008, Etisalat. In 2006, the Universal Access Service licenses were issued to provide fixed telephony, VSAT and internet services (Alabi, 1996).

The rationale behind the deregulation of the telecommunication sector include: the inability of the government to support the sector with subsidy; the need to reduce the burden on the government, the demand for efficient and current facilities, low rate of infrastructure growth, low access especially in the rural areas, and poor service delivery.

The commercialization of the operations of the state enterprise in the late 1980’s marked the beginning of the deregulation process. However, with the announcement of the National Communication Commission (NCC) Decree of 1992, telecom was divided into 2, with a part left in the hands of NITEL exclusively, while the other sector was opened to private sector participation. NITEL thus kept her monopoly over areas such as Exchange and Trunks and International Services. Section 10(a) of the Decree made provision for only Nigerians to participate in the sector, but this was amended in 1998 spelling out the criteria for being licensed.

In 1999, the then President of Nigeria, Olusegun Obasanjo made it a priority to privatize the sector totally, involving the Global System of Mobile Communications (GSM) service providers. Some private companies received licenses, but no operation took place until 2001 when three operators got digital mobile licenses auctioned by the NCC; the operators include Econet, MTN and MTEL. After this, there was a great explosion in the sector;within one year Econet and MTN gave the nation one million telephone lines  and by 2007 the number of telephone  lines in the country grew to 38 million as against 450,000 that was in place as at 1999, and 85 million by April 2010, due largely to the mobile network, which made the country the world’s fastest growing teledensity (Okonjo-Iweala, 2012).

The Telecommunication Act of 2003 encouraged more entry into the sector, engendering competition, and strengthened the role of the NCC. This paved way for the entry of the Second National Carrier which was GLOBACOM, and this has increased the intensity of competition in the sector, as each company introduces competitive and innovative packages, in order to gain the greater share of the market. As at 2004, the following had been achieved in the sector: a

teledensity of 3.9% as against 0.4% at 2001; average of 45% of the population in an area of about 156,200km2, 3.8 mobile lines connected in less than 3 years; 4 licensed service providers, including two National Operators; increased access to mobile phones by the people; reduction in acquisition costs of new lines; reduction in cost of internet access; employment generation on the path of the companies and the “umbrella people” (Ndukwe 2005).

Little(2005) posits that while achieving a lasting competitive market environment, deregulation is a logical step to sustain the further development of telecommunication industry. He further observes that the rational for deregulation is that less regulation will lead to higher competitive intensity, an increase in related investments, more innovation and higher customer benefits.

There is no doubt, ample telecommunications infrastructure is essential for a modern nation to develop to its maximum potential. Most developed countries have deregulated their telecommunication sector and it has given room for foreign investment, resulting in a developed private sector, more employment opportunities, better education and training facilities (Oshotimehin et al 2007).

Indeed, since the entry of private sector participants into the Nigerian Telecommunication sector, there has been a record of high level of development, particularly in respect to the Nigerian economy. Deregulation in the telecommunication sector has resulted in improved infrastructure as a result of foreign investments, enhanced communication among the people, simplified business processes and transactions, employment opportunities, enhanced productivity in other sectors and increased national output (Awoleye et al 2012).

According to statistics released by the Nigerian Communication Commission (NCC), the telecommunications sector has increasingly contributed greatly to the Gross Domestic Product (GDP) of Nigeria from 0.62% in 2001 to 8.53% in 2013; teledensity has also greatly improved from 1.89 in 2002 to 91.15 in 2013; and the subscriber base from 2,217,050 in 2002 to 127,606,629 in 2013 (NCC, 2014).The number of subscribers however, stood at 139,143,610 in 2014 while teledensity was 99.39(NCC, Website 2016).

A breakdown of the contribution of the telecommunication sector reveals that close to N400 billion has been paid in taxes as at 2012, with network operators paying about N160 billion in taxes annually and N55 billion as regulatory levies (Ogunsanya, 2013). Since 2001, about N640 billion has been paid in licenses and spectrum fees; other forms of contribution comes in payment of wages and benefits to employees, payments to contractors and Corporate Social

Responsibility (CSR) programmes. The telecommunication sector has led to the development of an ecosystem that involves a lot of members ranging from contractors to base member stations deployments and system integrators, to resellers of devices, and all these members arguably benefit from the activities in the telecommunication sector (Adeyanju, 2012; Ogunsanya, 2013).

The impact of deregulation of the telecom sector in job creation is a major contribution the economy. As at 2010, the sector had created 5,000 jobs directly, and more than 400,000 indirectly (Nigerian Bureau of Statistics, 2010).

According to a report in Nigerian Tribune Newspaper of July 16, 2004, government had received revenue in form of taxes and levies amounting to over N200 billion (Ajiboye et al 2007).

The advent of Global System for Mobile communication (GSM) in Nigeria was another benefit of deregulation in the sector and it has impacted other sectors of the country’s economy; for instance service sectors such as banking, education and health have had their operations made easy with ICT enabled products from the telecom sector such as mobile banking, e-payment, distance learning and e-health (Ndukwe, 2005).

Another area of development brought about by deregulation is in the area of infrastructure. In the course of their operations, MNCs have contributed immensely to the development of infrastructure in Nigeria, investing large sums of money into network roll outs, upgrades and expansion at various parts of the country. The operators have built backup networks to improve their services and such includes the construction of a core network, a transmission network and a power supply network (NCC, 2014).

For instance, MTN which has the largest infrastructure in the sector has invested a total of $7billion dollars in fixed assets and facilities nationwide. Few years after her entry into the country, MTN invested $120 million in establishing digital microwave backbone that currently spans to Cameroun via Cross rivers state, and Niger via Sokoto state (MTN, 2014). MTN has the longest and one of the most modern privately- owned fibre- optic cable in Africa, and 10,137 kilometers of it runs through Nigeria (MTN, 2014).

Since her acquisition of Zain in 2010, heralding her entry into Nigeria, Airtel has invested $ 1.5 billion in infrastructures and she is still investing (Ogunsanya, 2013). Globacom recently embarked on a network upgrade that involves building new switches and switching centers to ease congestion, construction of additional 4,000km of optic fibre cable, installation of new base stations and densification of existing ones, and improving customer service by setting up

three new mini call centers (Punch, 2013). All these efforts have helped the development of technological infrastructure and also contributed to the economy financially.

Deregulation has also led to the spread of telephone services, as against its concentration in urban areas, to rural areas, there by bridging the gap in the social, economic and political interactions between residents in the urban and rural areas. In other words, the inequality resulting from the urban-rural divide is lessened, which has implications for economic

development of the country (Ijewere and Gbandi, 2012).

It must be emphasized that, the essence of deregulation in the Nigerian telecommunication sector was to break the monopoly of Nigeria Telecommunication Limited (NITEL) by allowing private sector participation in the sector to encourage competition (Hassan,2011). Since the Nigerian Communication Commission (NCC) issued licenses to certain private operators in 2001, the Nigerian telecommunication sector has been dominated by private participants.

Truly, what is observable is the dominance of the sector by Multinational Corporations (MNCs) among the private participants, with very few indigenous participants.

1.2 Statement of the problem

Nigerians heaved a sigh of relief when Nigeria Telecommunication industry was deregulated. Nigerians have for long waited for the time  they will join the rest of the world in enjoying the benefits of deregulation and improved telecommunications system which apart from electricity, is about the most important critical infrastructure needed for the economic  growth and social development of any nation. Mamah(2012) opines  that the economic resuscitation of Nigeria lies in the sustenance of the deregulation policy of the federal government. The deregulation of the telecommunication industry brought about the entry of companies such as MTN, GLOBACOM and AIRTEL into Nigerian Telecommunication Industry. In the past the telecommunication system  was in a very  deplorable state, because of  the epileptic services being rendered by the Nigerian telecommunications limited (NITEL), which was the then national carrier. NITEL was essentially characterized by corruption and ineptitude in terms of its service delivery. Fijeh, (2002) posits that the few Private Telephone Operators (PTOs) namely multilink, intercellular and starcoms were handicapped as they have to go through the monopoly of NITEL to deliver services, the exclusive preserve of the rich with the attendant poor services. The deregulation of the telecom industry brought life into it with the entry of companies life MTN, Globacom and Airtel into the Nigerian telecom market making telecommunication services which used to be a luxury services something that is readily available and affordable for all and sundry. GSM is known not to be restricted to only just telephony. Indeed, it is an international standard that defines services in three broad areas, bearer services, tele services and supplementary services. It a well known fact that the  versatility regarding  the range of services that a GSM network is capable of providing makes it  a broader and more complex market. This is especially true when one considers that service providers will be dealing with a myriad of heterogeneous subscriber groups with homogenous need between them .Amidst the apparent goodness that is resultant from the deregulation process, some problems and disadvantages arise from this. In some cases, the key players in such industries are not usually carried in the design, implementation and execution of programmes and this brings about limited level of success for the programme and reforms. Also, it seems that deregulation brings about an increase in the cost and price of services which may not be easily and readily affordable for the poor masses. There are other problems being envisaged in the telecommunication industry. There is no gainsaying the fact that the deregulation of the sector has contributed to the growth of Nigerian economy. It has created jobs, attracted Foreign Direct Investments(FDIs), reduced cost of making calls and acquisition of SIM cards which can now be gotten free of charge and as well make telephony available to everyone whether you in urban town or in the village. These benefits notwithstanding it seems the industry is dominated by Multi-National Corporations(MNCs) and their board members are dominated by Nigerian elites that do not care about protecting the interest of the masses(Chidozie et al 2015).  Currently there are  5 mobile operators in Nigeria- MTN from South Africa, Bharti Airtel from India, Etisalat from United Arab Emirates, Globacom and MTel which are indigenous with MTel being the mobile arm of the Nigerian Telecommunication (NITEL). According to the statistics released by the Nigerian Communication Commission (NCC, 2014), the communication market is dominated by MTN 56,766,085 subscribers giving it 45% of the market. It is followed by Globacom with 25,933,867 subscribers’ equivalent of 21% of the market; Airtel with 24,847,567 subscribers, a total of 20% of the market; Etisalat with 17,035,276 subscribers, a total of 14% of the market and MTel with 258,520 subscribers, an equivalent of 0% of the market(Chidozie et al 2015.

 The composition of the leadership of the MNCs in the telecommunication industry in Nigeria is telling enough. MTN Nigeria’s key Executives are: Michael Ikpoki who is the Chief Executive Officer, Brett Goschen -the Group Chief Financial Officer, Afam Dozie- Chief Marketing and Strategy Officer, and Amina Oyagbola- Human Resources Executive. Other members include Dr. Pascal Dozie of African Capital Alliance; M. Sani Bello (OON) of Law Union and Rock Insurance; Dr. Matamela Cyril Ramaphosa of The Shanduka Group Pty Ltd.; Mr. Karel Pienaar (MTN Group); and Mr. Gbenga Oyebode (MFR) of Access Bank plc (Bloomberg Business Week, 2014). An assessment of this composition will reveal that though there is a fair percentage of indigenous membership of this board with only three foreign members out of nine, many of them belong to the elite class of the country and can be categorized as part of the elites of the society. Mr. Michael Ikpoki who happens to be the first local CEO of MTN Nigeria was formerly the CEO of MTN Ghana and was previously working with NCC until he joined MTN in 2001. Mr. Afam Dozie has spent a total of 23 years working with MNCS- Virgin, Procter & Gamble and Motorola in Europe (Bloomberg Business Week, 2014).

Dr. Pascal Dozie having spent most of his early years and career abroad, returned to Nigeria in 1972 and has since then occupied positions of influence at various times and in different sectors in Nigeria. He was a member of the Pius Okigbo panel in 1994, a member of the Board of Directors of Central Bank of Nigeria (CBN), a past president of the Nigerian Stock Exchange and still serves a member of the Exchange Council. Board members of Airtel Nigeria include: Dr. Oba Otudeko- Chairman; Segun Ogunsanya –Chief Executive Officer appointed in 2012; Ross Masterman- Chief Financial Officer, Khaled Khorshid- Chief Operating Officer, Shamel Mohammed Hanafi- Chief Commercial Officer; Emeka Oparah- Head of Public Relations; and Gamaliel Oforitsenere

Onosode. The board members of Etisalat Nigeria include: Mr. Stevens Evans- Chief Executive Officer; Mr. Gilles Kuntz- Chief Technology Officer, Mr. Hakeem Bello-Osagie, and Mr. Alhaji Garba Bello (Bloomberg Business Week, 2014).

Dr. Oba Otudeko is one of the business elites in the country; he is the head of the Honeywell Group and FBN Holdings plc; he has once been the head of First Bank of Nigeria Plc and FBN Bank (UK), the 16th president and Chairman of Council of the Nigerian Stock Exchange, he has served on the board of Central Bank of Nigeria and other blue-chip companies such as Guinness Nigeria Plc and Ecobank Transnational Incorporated (Honeywell Group, 2014).

Mr. Segun Ogunsanya has served as MD of Nairobi Bottlers, Ecobank Transnational Inc., Nigerian Bottling Company and Coca-Cola Nigeria. Mr. Hakeem Bello-Osagie has an elite family background whose father has a flourishing relationship with past Nigerian Heads of state; he is an Harvard trained petroleum economist; he has been in the cabinet serving as adviser to the President on petroleum and energy, and also in the Nigerian National Petroleum Corporation (Forbes, 2014).

All these point to the fact that while these MNCs employ average Nigerians as part of the labour force, the indigenous members of the board are business or bureaucratic elites, who arguably may not represent the interest of the average Nigerians in the board. This validates the claim that imperialism involves the local and metropolitan bourgeoisies working in concert at the expense of the masses.

 It is important to note that  in the wake of deregulation, not only is the telecom market being dominated, but local productive capacity and efforts have been choked out by competition from the MNCs. Considering the fact that the industry is capital intensive, all parts of the sector ranging from mobile phones and accessories to chips, to servers and softwares are dominated by the MNCs. The sections of the industry with local capacity input include distribution, sales and the staffs of the MNCS (Omoweh, 2002; Osemene 2012).It is also worthy of note that  telecom operators are in serious competition and in the bid to outwit one another they roll out different strategies that are in most cases not favourable to the consumers. The MTN talkmore service for example has to do with a situation where you buy N100 recharge card and load on your phone and you will be given N200 bonus and the N100 will be  reflected in your main balance.You can use the bonus to make call to any network in Nigeria but you can not use it to make international calls.It is observed that the tariff rate per sec is usually escalated and before one knows it the bonus balance is exhausted leaving you with the main balance. The speed at which this balance is utilized as you make calls can not be explained. The operators however introduce all sorts of products to attract new customers as well as existing ones to subscribe for one service or the other and at the same time short change them. There are many fraudulent ways they adopt to ripoff consumers with a view to generating huge revenue on daily basis. There  calls for the need for  NCC to ensure that these operators are fully regulated.

Today, the industry has surpassed telephony as there are quite a number of mobile service providers such as MTN, Airtel, Globacom, Etisalat which provide a range of services that include internet, Small Messaging Services (SMS), multimedia services, internet access and mobile banking. With such development, new challenges are also arising such as ensuring conformity to best quality of service delivery; upgrading of infrastructures to meet international standard; security and maintenance of facilities, especially in the remote areas; ensuring the framework of broadband that can be accommodated by the ecosystem; and security of data in this digital world.

1.3 Objectives of the Study

The main objective of the study is to examine whether deregulation has effect on the performance of telecommunication in the southwest Nigeria.

Other specific objectives are:

 1.To check whether the number of  GSM subscribers  in the southwest, Nigeria  have effect on GDP sector contribution.

     2. To ascertain whether the number of GSM subscribers in the southwest, Nigeria   have

       effect on  Foreign direct investment(FDI) attracted  by telecom operators.    

      3.  To check whether teledensity  associated with the southwest has effect on GDP sector

         contribution of the telecommunication operators .

      4. To determine whether teledensity associated with southwest has effect on foreign direct

      investment(FDI) attracted by the telecommunication operators.

     1.4 Research Questions

     The researcher would want to find answers to the following research questions.

      1.Do the number of  subscribers  of GSM  in the southwest  have effect  on GDP sector

     contribution?

      2.  Do  the number of GSM subscribers in the southwest  have effect  on Foreign Direct

        Investment(FDI attracted by telecommunication operators?

3.     Does teledensity associated with the southwest have effect on GDP sector contribution?  

4. Does teledensity associated with the southwest have effect on Foreign Direct Investment(FDI) attracted by Telecommunication operators?               

      1.5 Research Hypotheses

      The following hypotheses would be stated and tested in this study:

     1.H0:There is no significant effect of  number of GSM subscribers  on GDP sector

      contribution of    telecommunication operators in the southwest.

     Ha: There is significant effect of  number of GSM subscribers on GDP sector contribution of

       telecommunication operators  in the southwest, Nigeria.

     2.H0:There is no significant effect of number of GSM subscribers on Foreign Direct

      Investment(FDI)  attracted by telecommunication operators. in the southwest, Nigeria.  

     Ha: There is  significant effect of  number of GSM subscribers on Foreign Direct

       Investment(FDI)  attracted by telecommunication operators in the southwest, Nigeria.

     3.H0:There is no significant effect of teledensity  associated with the southwest on GDP sector

      contribution.  

     Ha: There is  significant effect of teledensity  associated with the southwest on GDP sector

      contribution.        

  4.H0: There is no significant effect of teledensity associated with southwest on Foreign Direct

       Investment(FDI) attracted by telecommunication operators.

 Ha:  There is no significant effect of teledensity associated with southwest on Foreign Direct

       Investment(FDI) attracted by telecommunication operators

1.6 Significance of the study

Telecommunication Industry is a critical sector in terms of contribution to economic development of a nation. We have to be grateful to the former head of state in the person of General Olusagun Obasanjo Rtd. who’s administration made the deregulation of telecommunication industry in Nigeria possible. A study in this industry is welcome at this period of Nigeria history in which the federal government is looking at how to diversify the economy. There are so many interest groups, organizations and institutions that would benefit from the findings that would be established in this study ,ranging from operators of telecommunication industry, the regulator of the industry- Nigerian Communication Commission(NCC),investors, researchers, scholars and students amongst others. For NCC, some of the shortcomings and challenges being experienced in the sector that shall be exposed by the study would help them in their continuous search for strategies they will adopt to fully regulate the sector for better performance. For investors, the established findings are  likely to show  the prospect of investing in the sector that is how profitable and attractive the industry is  so as to enable them make good  investment decisions. For the scholars, researchers and students studying information technology, the extensive literature review, gap  and findings established would help them obtain current information on telecommunication industry in  Nigeria and beyond. There is therefore no doubt, that the study will fill both theoretical and knowledge  gaps by providing theoretical and conceptual models that would further advance knowledge in deregulation, information communication technology(ICT), and telecommunication industry and research in this area through publications in local and international Journals.

1.7 Scope of the Study

The focus of this study is on  deregulation and performance of telecommunication industry in the southwest, Nigeria. The study examines deregulation of telecommunication with regard to its contributions to economic development in Nigeria and southwest in particular in terms of the sector contribution to Gross Domestic Product (GDP), Teledencity, employment generation,  increase in number of services,  attraction of foreign direct investments, increase in business activities ,  number of subscribers , profitability , quality of services amongst others.

The work would also evaluate theoretical and conceptual framework, methodological issues and empirical literature relevant to this work. The study shall cover the six states of the southwest, Nigeria which include Lagos, Osun, Oyo, Ogun, Ekiti and Ondo. It should be noted there were telecommunication operators like Starcoms, Reltel that are  now moribund and Nitel which is currently operating under the name Mtel with zero market share (NCC,2014).Visa phone was  currently acquired by MTN. Telecom operators we are targeting in study are MTN, Airtel, Globacom and Etisalat. They all have their head offices in Lagos with branches in the six states.. They have offices in the six states that should be covered. Globacom is however the country’s carrier. We intend to cover the period 2002 to 2014.This is for the fact that the secondary we shall use obtained from Central Bank of Nigeria( CBN) statistical bulletin and Nigerian communication commission(NCC) would cover the stated period.

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