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NIGERIA
A new business climate |
 Business - Economy - Lean and clean - Core issues - Home truth -
Oil business - Private sector - Banking 
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INTERVIEW
WITH:
ENGINEER ISAILA MOHAMMED,
MANAGING DIRECTOR AND CHIEF EXECUTIVE OF nigeriaN MOBILE TELECOMMUNICATIONS LIMITED
August, 4th 1999 |
1) Could you start this interview by briefly introducing us to M-Tel?
The nigerian Mobile Telecommunications is a federal government owned company which was established on the 1st of January, 1996. Prior to 1st January 1996, the cellular operations was managed by nigerian Telecommunications Limited, so the federal government decided to hand off the cellular operations, the management and services, nigerian Mobile telecommunications Limited (M-Tel) and the company incorporated on the 21stof May 1996. So far we have been operating analogue system to date. When we started, we had only about 10,000 lines, it was in 1996, and today we have about 20,000 lines and all of the lines are in analogue form. We have already identified 20 cities in an attempt to introduce GSM in the country. In order to achieve this goal, we have appointed a consultant to carry out the survey, design and technical specification and the ender documents. We are expecting that by September, we should be able to get the full report from the consultants so that we can hold the tender. We may not probably go to the 20 cities in a go, but we are going to implement the GSM in phases. So this is how far we have gone on the cellular system. In nigeria, so far the only cellular system providing cellular system is only N-Tel, although there are some companies who have been licensed but they are not fully on the ground.
2) In terms of figures, you said you have about 20,000 lines. Could you give us some more figures : coverage, market share, penetration…?
The market for mobile cellular in nigeria is enormous, it is unfortunate that only one company so far in the country is operating in nigeria and I’m glad the government is liberalizing the telecommunication industry, so that this liberalization and privatization of the telecommunication industry in the country will bring around rapid development of telecommunication and facilities as well as the growth expected. I think the country is stable now, democratic administration now is doing its best to make sure that foreign investors are attracted to this country so that the development in terms of telecommunication and other sectors take off effectively. The country has about 120 million inhabitants and for us to be providing 20,000 lines at the moment is grossly inadequate. I think there must be ways of providing facilities and maybe incentives too that can attract foreign investors so that they can assist or help in developing the telecommunication sector. The market is there, the customer is there, it is only the investment that remains now and I think one company cannot be able to cope with the demands of the telecommunication services especially the wireless system. So I think it is a very good idea for the government to introduce quite a number of private telecommunication operators to come and invest in the country.
3) When the government decides to issue those bids for private operators, how will this affect your business?
Like I said earlier, this country has a population of 120 million inhabitants and so far M-Tel has already established the South. Besides we have the advantage and we are working very hard to see that the GSM is introduced into the country early, and the capacity is going to be reasonable enough and the coverage too is going to be national. Our license is a national one. We intend to operate on dual mode, that is on GSM 900 and GSM 1,800 and I think that with this measure plus being an older company, the capacity we are going to introduce into the country, the 900 coverage will still give us an edge over the new comers.But like I said, the demand is enormous and the population is also quite enormous so I think that there is a market for quite a reasonable number of private operators.
4) Any dates in your mind yet?
We are hoping to start by the middle of next year. By this time, we should start selling the GSM lines, and by June, we should be able to start providing the GSM services in the country nationwide.
5) In terms of services you are currently providing value-added services such as international roaming, messages, mailboxes. What are your plans for the future?
So far, we only received ourselves for the provision of domestic voice services, so that’s all. Before January 1996, we provided international services but analogue system on the mobile has inherent problems of fraud that is why we could not be able when M-Tel was created to continue with the international services because continuing with that as a very young and small company, with limited capacity and an enormous level of fraud, we were going to pay bad money with good money. We still would have to pay Nitel for the international traffic and Nitel too would have pay other international administration costs on the traffic accounting so this is something if we introduced, would have made us to pay Nitel money that we cannot collect, so instead we say that to restrict ourselves to domestic voice services so that will be the level of expenditure. But as soon as we introduce the GSM, GSM is coming automatically with the international lines. So we have already secured a GSM/MOU membership which will allow us to introduce GSM as well as allow us to go into agreement with other international cellular operators. On analogue too we are trying to introduce 16 pin authentication which will protect the customer as well as the company, so that we will not have too many discriminating by itself. So as soon as we are able to activate the authentication equipment which is presently being installed by internationals services on the voice is going to be reintroduced in the next one or two months
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6) As you were saying telecommunication and information technology are converging internationally. When talking about international partners, are you planning to develop strategic partnerships?
This is the intention of the government, this is how the privatization process comes in. The government is planning on privatizing the telecommunication sector as well as the other sectors of the economy and M-Tel being 100% owned by the government. So whatever the government is planning on doing is a very welcomed idea. This is even an opportunity for the management to ensure the required development and growth of the telecommunication industry, particularly mobile is enhanced. I am sure that, by privatizing M-Tel, it will bring a lot of development. The telecommunication sector especially mobile is going to be revolutionized.
7) Do you know when M-Tel will be privatized?
According to the government, I think it will be a year after the first phase of the privatization of other sectors. The telecommunications industry is going to be privatized in the second phase. And that may be next year of 2000 or even 2001 but depending when the government intends to do it.
8) It is said that Analysts are calling for the communication policy to be updated. According to you, what aspects of the law should be changed today?
Well I think the number of licenses. The government has to be decisive as to how many operators are going to be allowed to operated in the country and because of the urgent need to develop the telecommunications industry in terms of service availability, I think the policy for example on certain incentives like in the reduction in customs duties and other tax rebates have to be introduced to attract foreign investors. I think these areas plus others are very important if you take into account when it comes to policy.
9) nigeria has a very low telephone penetration. This might be an impediment for the growth of the economy. What is your opinion and how do you see the telecommunications sector in nigeria?
The future of telecommunication in nigeria is very bright. But like you know telecommunication are very capital intensive so the government has to do all it can to allow and encourage foreign investors to come in. Like I said earlier the government is bent on liberalization the industry and privatizing the existing government owned telecommunication industry so I think that government needs to give a lot of encouragement and incentives to the foreign investors because there are so many social developmental projects which the government can take so if they can probably partially privatize then encourage foreign investor to come in then other social developmental projects can be tackled by the government.
10) You sound very confident !
Yes, I am.
11) Can you give us your personal background?
Well my name is Ismaila Mohammed, I am from Kano State in nigeria, I was born on 6 June 1952. I attended my secondary school in Kano Stare, my first degree was obtained from Plymouth Polytechnic in England and I spend the entire working life in the telecommunications industry, starting from broadcasting up until presently in the telecommunications proper. I was working in Nitel before the creation of M-Tel and after I was appointed as the Managing Director. I grew up in the telecommunications industry.
12) Then you are currently a member of the privatization committee on national policy, so you’re directly working with the government?
This committee is on an ad hoc basis, Ad-Hoc basis one in which after we finish meetings everyone goes back to his office.
13)Keeping in mind that we reach some 4.6 million readers what would be your final message to them?
My final message will be that the government of nigeria is trying to develop a telecommunication industry urgently. And the government is doing the best it can to make sure that politically the country is stable so as to reassure the investors that the country is now stabilizing that there investment will be secured and there is no fear for anybody that is investors to come and invest in nigeria, particularly in the telecommunications sector . The country has changed considerable and the fear associated earlier by the potential investors should no longer be exercised they should feel free that there investment is secured that country is stabilizing and the market potential in nigeria is enormous so the question of profitability is not in doubt. |
© World INvestment NEws, 1999.
This is the electronic edition of the special country report on nigeria published in FORBES Magazine,
October 18 th issue.
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