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Starcomms, Intercellular, others face extinction

By BusinessNews Staff on July 1, 2014

Fixed telephony faces extinction as several operators of the system are listed as inactive, EVEREST AMAEFULE reports

There are indications that fixed telephony may be wiped out from the telecommunications landscape of the country as fixed telecommunications operators lost more than 56 per cent of their active lines in the past one year.

Statistics obtained from industry regulator, the Nigerian Communications Commissions, on Friday, showed that the active fixed telephone lines in the country were 172,876 lines as of April ending.

A year before, the number of fixed telephone lines stood at 396,939 lines. That means that within a period of one year, the fixed operators lost 224,063 active lines. This also shows a decline of 56.45 per cent in the number of active fixed telephone lines.

Within the same period of one year, Global System for Mobile Communications operators known as GSM operators gained 10.63 million new subscribers. This shows 9.14 per cent increase in the subscriber base of GSM operators.

Other marginal operators within the industry pushed the total number of subscriber lines in the country to 129,391,392 lines as of April.

This means that the total number of subscription lines increased by 10.03 million within a period of one year. It was 119,356,665 lines a year before. This shows an increase of 7.76 per cent in the total number of subscribers within the period of one year.

The decline of fixed telephony in the country is not helped by the rapid decline in the fortunes of operators that had hitherto offered fixed wireless telephony services.

In fact, the regulatory agency has listed some of the fixed operators as inactive. The operators consist of Starcomms Limited, Reliance Telecomms, Intercellular Nigeria Limited, MTS First Communications and Disc Communications.

Others are WiTEL, O’Net (Odua Telecom), Rainbownet Limited, Monarch Communications, XS Broadband, Webcom and of course, the Nigerian Telecommunications Limited.

Over the years, NITEL had been the major provider of fixed services in the country. The hope that this former sole national operator would bounce back has been dashed by conflicting stance of different arms of government on the path of revival to follow.

The liquidator appointed for the telecomms operator by the Bureau of Public Enterprises recently announced that the Federal Government was seeking buyers for the assets of the distressed former telecomms monopoly.

The government opted to wind up NITEL in March after almost a decade of struggling to sell it due to the shambolic state of its fixed lines and high levels of debt.

The liquidator said in an advert that it wanted bidders with five years of telecomms experience and a net worth of at least $200m.

It said bids must be submitted by 1600 GMT on June 30, adding that the assets would be handed over to the preferred bidder in December.

The privatisation body said it opted for a sale method it called ‘guided liquidation’ because it wanted to protect the government from future claims and liabilities, as proceeds of the sale might be less than the value of the debt.

NITEL is said to owe creditors – mostly suppliers – around N400bn, with creditors taking a loss if the proceeds from the sale are not enough to repay the entire debt.

The Chairman, Senate Committee on Privatisation, Senator Gbenga Obadara, said the Senate was opposed to the liquidation of NITEL and its mobile subsidiary, the Nigerian Mobile Telecommunications Limited.

He described the proposed guided liquidation of NITEL as fraudulent, alleging that through the exercise, the properties of NITEL, more than 5,000 across the country, would be given to cronies of people in government.

Obadara said the legislative house preferred a Build, Operate and Transfer arrangement with the private sector, arguing that the debt owed NITEL by government agencies could offset its debt.

The Managing Director/Chief Executive Officer, Comnavig, a telecomms consulting firm, Mr. Olufemi Adeagbo, said the decline in fixed telephony and fixed telecommunication operators was expected, given the revolution brought about by the GSM service providers.

Adeagbo said although fixed telephony had advantages of quality, reliability and lesser consumption of spectral resources, he argued that given the infrastructure requirement for fixed telecommunication, the operators could not stand against the rampaging force of the GSM.

He said, “In Nigeria, unlike in several advanced countries, the first contact that majority of the people had with telecommunications was mobile. We never had fixed telephony culture.

“What can I get from fixed that I cannot get from mobile? We never had the fixed line culture. In Britain, fixed telephony is almost free. If it is not cheaper, I don’t see the business sense in fixed telephony.”

The Comnavig boss said fixed operators needed to refocus their businesses or face total extinction, noting that chasing domestic subscribers could not revive fixed telephony.

He said fixed telephony could only serve the corporate market because of the imperative of driving businesses with fixed lines and the need to serve contact centres that could not be breached by mobile services.

Meanwhile, through the licensing of infrastructure companies, the NCC says it hopes to revive whatever is left of fixed telephony.

The target of the seven infrastructure companies that are in the pipeline is broadband and data revolution.

Concerned stakeholders expect that the licensing of these infrastructure companies will have the indirect effect of reviving of fixed telephony in the country.

[Punch]

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