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A Case Study of the Global System of Mobile Communication (GSM) in Nigeria

A Case Study of the Global System of Mobile Communication (GSM) in Nigeria
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Vol. X, issue No. 3, June 2009 CEPIS NEWSUP ENET (UP GRADE European NETwork) UP GRADE is the European Journal for theInformatics Professional, published bimonthlyat <> PublisherUP GRADE is published on behalf of CEPIS (Council of European Pro-fessional Informatics Societies, <>) by Novática <>, journal of the Spanish CEPIS society ATI( Asociación de Técnicos de Informática, <>) UP GRADE monographs are also published in Spanish (full versionprinted; summary, abstracts and some articles online) by NováticaUP GRADE was created in October 2000 by CEPIS and was firstpublished by Novática and INFORMATIK/INFORMATIQUE , bi-monthly journal of SVI/FSI (Swiss Federation of ProfessionalInformatics Societies, <>) UP GRADE is the anchor point for UP ENET ( UP GRADE EuropeanNETwork), the network of CEPIS member societies’ publications, thatcurrently includes the following ones:• Informatica , journal from the Slovenian CEPIS society SDI• Informatik-Spektrum , journal published by Springer Verlag on behalfof the CEPIS societies GI, Germany, and SI, Switzerland• ITNOW , magazine published by Oxford University Press on behalf ofthe British CEPIS society BCS• Mondo Digitale , digital journal from the Italian CEPIS society AICA• Novática , journal from the Spanish CEPIS society ATI• OCG Journal , journal from the Austrian CEPIS society OCG• Pliroforiki , journal from the Cyprus CEPIS society CCS• Tölvumál , journal from the Icelandic CEPIS society ISIP Editorial Team Editorial Team Chief Editor: Llorenç Pagés-CasasDeputy Chief Editor: Francisco-Javier Cantais-SánchezAssociate Editors: Fiona Fanning, Rafael Fernández Calvo Editorial Board Prof. Wolffried Stucky, CEPIS Former PresidentProf. Nello Scarabottolo, CEPIS Vice PresidentFernando Piera Gómez and Llorenç Pagés-Casas, ATI (Spain)François Louis Nicolet, SI (Switzerland)Roberto Carniel, ALSI – Tecnoteca (Italy) UP ENET Advisory Board Matjaz Gams (Informatica, Slovenia)Hermann Engesser (Informatik-Spektrum, Germany and Switzerland)Brian Runciman (ITNOW, United Kingdom)Franco Filippazzi (Mondo Digitale, Italy)Llorenç Pagés-Casas (Novática, Spain)Veith Risak (OCG Journal, Austria)Panicos Masouras (Pliroforiki, Cyprus)Thorvardur Kári Ólafsson (Tölvumál, Iceland)Rafael Fernández Calvo (Coordination) English Language Editors: Mike Andersson, David Cash, ArthurCook, Tracey Darch, Laura Davies, Nick Dunn, Rodney Fennemore,Hilary Green, Roger Harris, Jim Holder, Pat Moody. Cover page designed by Concha Arias-Pérez"Falling Upwards" / © CEPIS 2009 Layout Design: François Louis Nicolet Composition: Jorge Llácer-Gil de Ramales Editorial correspondence: Llorenç Pagés-Casas <> Advertising correspondence: <> UP GRADE Newslist available at<> Copyright  © Novática 2009 (for the monograph) © CEPIS 2009 (for the sections UP ENET and CEPIS News)All rights reserved under otherwise stated. Abstracting is permittedwith credit to the source. For copying, reprint, or republication per-mission, contact the Editorial TeamThe opinions expressed by the authors are their exclusive responsibilityISSN 1684-5285 Monograph of next issue (August 2009) " 20 years of CEPIS: Informatics inEurope today and tomorrow" ( The full schedule of UP GRADE is available at our website ) Monograph: Libre Software for Enterprises (published jointly with Novática*) Guest Editors:   Jesús-M. González-Barahona, Teófilo Romera-Otero,and Björn Lundell   54 UP GRADE Vol. X, No. 2, April 2009© CEPIS UP ENET Mobile Technologies A Case Study of the Global System of Mobile Communication(GSM) in Nigeria  Adeyinka Tella, ’Niran Adetoro, and Paul Adesola Adekunle © 2009 NováticaThis paper will be published, in Spanish, by Novática . Novática , <>, a founding member of  UP ENET,is a bimonthly journal published, in Spanish, by the Spanish CEPIS society ATI (Asociación de Técnicos de Informática – Associationof Computer Professionals). This paper presents a case study of the implementation of the Global System of Mobile Communication (GSM) in Nigeria,that started in 2001. The paper includes a discussion on the nature of this system, a brief history of GSM in Nigeria as asuccess story, demographics of users, benefits, problems/challenges and recommendations for future development and improvement of GSM services in the country. It also provides some insights into the problems developing countries face inthis industry compared to those of the developed world. Keywords : Africa, Case Study,Communications, GSM, ICT, Informa-tion and Communication Technolo-gies, Nigeria. 1 Introduction There is no doubt that communica-tions are a major driver for anyeconomy. Emerging trends in socio-economic growth show a high pre-mium being placed on Information andCommunication Technologies (ICT)by homes, organisations, and nations.Improved Information Technologies(IT), especially as far as digital com-puter systems are concerned, are be-coming more affordable and accessi-ble to an increasing number of people.Communication technologies, coupledwith the advances in information tech-nologies, are innovations which allowvoice and data to be communicatedanywhere in the world at affordablecost thus enabling a significant numberof people, rather than limiting its ac-cessibility to small minority of people.ICT have also permitted a range of technological and institutional devel-opments. These developments repre-sent a major break with the past that is AuthorsAdeyinka Tella is a graduating commonwealth doctoral student and Teaching Assistantin the Department of Library and Information Studies, Faculty of Humanities, Universityof Botswana. He has wider research areas of interest. These include information systemand management, e-learning system, psychology of information, digital divide, andinformation communication technology and education, etc. <> ‘Niran Adetoro received the Ph.D. degree in Library and Information Studies fromThe University of Ibadan, Nigeria, in 2008. He was formerly a librarian at the Tai-Solarin University of Education Ijebu-Ode, Ogun State, Nigeria and currently a lecturerin the Department of Library and Information Studies at the same university. His researchinterest is in the area of information technology. <> Paul Adesola Adelunke is a PhD student at the Abadina Resource Center, Universityof Ibadan, Nigeria, and a Librarian at the Bowen University, Iwo, Osun State, Nigeria.<> producing significant qualitativechanges in what is being produced,where, how and by whom. The changesare cumulative and incremental. Thereare already signs that ICT are begin-ning to transform systems of produc-tion and the relationships betweenfirms and States in the internationaleconomy. These changes are acceler-ating because technological advancescontinue to bring about reductions inthe costs of ICT. As cost reduces, therange of possible applications expandsinto new areas. One of the new areasor innovations brought about by ICTis the Global System for Mobile com-munication (GSM). 2 The Nature of GSM in Nigeria The world is fast becoming a glo-  UP GRADE Vol. X, No. 2, April 2009 55  © CEPIS UP ENET bal village and a necessary tool for thisprocess is communication of which tel-ecommunication is a key player. Thequantum development in the telecom-munications industry all over the worldis very rapid as one innovation replacesanother in a matter of weeks. A majorbreakthrough is the wireless telephonesystem which comes in either fixedwireless telephone lines or the GlobalSystem of Mobile Communications(GSM). GSM is a technology widelyappreciated and accepted by Nigeriansas it has helped in various aspects of the economy.Mobile phones are more than justa fixed-line alternative; however theyare now recognised that they are also‘mobile’. This ‘communications on themove’ means people can engage indevelopment activities that previouslywould not have been possible. For ex-ample, mobile phones enable State sur-veillance and also allow citizens tomonitor the State.GSM is multi-functional with manyopportunities, by means of whichmany of the world’s poor communitieshave access not just to a phone but to acamera, calculator, audio player, videoplayer, timepiece and good enough aplatform for email and Web use. GSMis also cross-functional by bringingtogether services that cut across exist-ing boundaries and present govern-ments with new platforms for takingdecisions.GSM technology is one of the lead-ing digital cellular systems. GSM usesnarrowband TDMA (Time DivisionMultiple Access), which allows eightsimultaneous calls on the same radiofrequency. It is considered as the mostadvanced digital cellular technology.GSM networks are leaders in manytypical digital services including theShort Message Service (SMS), OverThe Air (OTA) configuration and GSMpositioning. The SIM card (SubscriberIdentification Module) is also a uniqueand essential component of GSMphones. Technically, GSM was builtbased on the TDMA protocol. 3 Brief History of GSM in Ni-geria In July 1999, the reigning Presidentof the country announced plans to pri-vatise Nigeria TelecommunicationLimited (NITEL, as it is known), whichGlobacom (Glomobile) through an-other transparent auction process. Tofurther increase competition, a fifthmobile license (with GSM spectrum)was awarded to Emerging Market Tel-ecommunications Services Limited,otherwise known as Starcoms, in 2005.However, four years after the firstGSM trail was blazed, the GSM indus-try in Nigeria has changed tremen-dously. Competition for subscribers isgetting fierce. Operators have resortedto "price wars" in order to win sub-scribers. Subscribers, on the otherhand, have more choices than ever re-garding which GSM operator to use.To attract, maintain and move subscrib-ers to high-value services such asvoice, data and multimedia applica-tions, network operators must providehigh quality services. Providing qual-ity services will require monitoring andquality assurance with a view tooptimize the network. The ever in-creasing number of GSM operatorswith its lower tariffs on calls has led tocontinuously increasing number of subscribers, which has made Nigeriathe largest GSM market in Africa over-taking and beating South Africa. 4 Demographics of GSM Usersin Nigeria In Nigeria there were about450,000 connected lines in May 1999which had increased to over 38 mil-lion lines by July 2007, boostingteledensity growth from 0.4% to 24%[10]. As mentioned before, early in2008 Nigeria overtook South Africa tobecome the continent’s largest mobilemarket with over 44 million subscrib-ers. New customers are currently sign-ing up at a rate of almost one per sec-ond [5]. The capacity for growth in thenumber of phone lines in the countryover the next decade remains quitehigh, as some parts of the country areyet to be covered. 5 Benefits of Mobile Telephonyin Nigeria Nigerians have benefited im-mensely from the advent and maturityof a mobile telephone system. ManyNigerians now have easy and quick access to the phone, whereas comparedto when mobile telephones were intro-duced in 2001, only rare and wealthyNigerians could afford telephone linespreviously monopolised telecommuni-cation operation in Nigeria. Since thena number of operators have entered themarket, including Em international(EMIS), Prest Cable, Motophone Ni-geria and Wireless Systems Nigeria. Sofar these companies have concentratedtheir services on urban. Nigeria has hada very limited telephone network formany years and the waiting list is esti-mated to be over 10 million prospec-tive subscribers who have applied tothe operators for their services. About6 cities have IDD (International DirectDialing).The replacement of Nigeria’s out-dated telecommunications infrastruc-ture through both multilateral and Ni-gerian funding still constitutes a prior-ity program of the Nigerian govern-ment. NITEL has approved eight pri-vate firms to be connected to its switch-ing system in order to provide servicesto different Nigerian zones. Seven of these firms, VGC Communications,Mobitel, Multilinks, Intercellular,EMTelecommunications, Spar Com-munications and GSM Celia com-menced operation in Lagos area [12].In August 2001 the first GlobalSystem for Mobile (GSM) communi-cations call was made under a demo-cratic government. This event heraldedthe dawn of a new era, "the era of GSMtechnology", which has completelychanged the way of doing business inNigeria. Prior to 2001, the number of connected phone lines in the countrywere a mere 450,000 for an estimatedpopulation of 120 million at the timeand the level of investment in the tel-ecommunications sector was just aboutUS$50 million only [4]. Six years af-ter, the growth in telecommunicationssector is unmatched by any other sec-tor and it has recorded a phenomenalgrowth both in terms of subscribers’base and infrastructural developmentin the country. In January 2001, thecommission conducted an auction fordigital mobile licenses. This auctionwas acclaimed locally and internation-ally as one of the best in the world dueto its high level of transparency. Theauction brought about the emergenceof three mobile Operators: ECONETWireless now (Zain), MTN and MTEL,an offshoot of the incumbent operatorNITEL. In 2002 a fourth Digital Mo-bile License (DML) was issued to  56 UP GRADE Vol. X, No. 2, April 2009© CEPIS UP ENET [12]. Different categories of the popu-lation can now afford to own a mobileline. According to [9] it is instructiveto note that while connected lines onlygrew at an average of 10,000 lines perannum in the four decades betweenindependence in 1960 and the end of 2000, between 2001 and 2003, an av-erage growth rate of over 1 millionlines per annum was attained; as of September 2003, Nigeria had attainedover 3 million lines (2.3 million of which were digital mobile lines). To-tal teledensity, which had been 0.4 linesper 100 inhabitants in 1999, stood at2.6 per 100 inhabitants by September,2003. Ndukwe goes on to explain thatthis progress is largely due to the lib-eralisation of the Nigerian telecommarket.Essentially the advent of GSM inNigeria in 2001 has generated a hugenumber of employment opportunitiesfor all categories of the Nigerian popu-lation. Uko asserts that the advent of GSM sub-sector has added fillip to theFederal Government’s wary battleagainst unemployment [17]. Since2001 when the three GSM companiesbecame operational, some 3,000 peo-ple have been directly employed byMTN, Econet and M-Tel, whileGlobacom’s entry into the marketadded a couple of hundreds to the classof people who have been employed.However, the number employed indi-rectly by the GSM sub-sector is im-measurable because scores of newbusinesses have come about courtesyof the sub-sector. The list is endless,from various levels of dealerships, tothe cellphone vendors, and suppliersof accessories, repair shops, the staticand the itinerant call shops and streetrecharge card hawkers. This technol-ogy has to some extent alleviated theproblem of unemployment in the coun-try.Corroborating the point aboveOmeruo remarks that some of theblessings of mobile communication inNigeria have been directly or indirectlyon the common people, the corporateand business worlds, and the societyat large [14]. Job creation and employ-ment are some of the good things thatGSM brought to us, the sector been thehighest employer of both skilled andunskilled manpower in recent times. Agreat number of people, especiallyyoung graduates, have been given em-ployment in the GSM companieswhere they make a living and are use-ful to their families. This somehow hasreduced crime rate.Omeruo goes further to say that,apart from this direct employment, jobshave been created where many peopleare self reliant doing their own GSMbusinesses, one of such business ismaking calls and the sale of rechargecards to GSM users. This business ispopularly known as business centersor call centers. Looking around the cit-ies, towns and even villages one willhardly walk about two poles withoutseeing a business center mainly char-acterized by the use of umbrellas, ki-osks and even shops painted with thecolors of the mobile service providers.It is easy to start because it requireslittle initial capital, in fact all you needis your umbrella as a shade, a stool, atable and your handset loaded withcalling credit of any amount startingwith as little as 100 nairas (Nigerias’currency, approx. 0.50 euros). This hasprovided a means of livelihood formany people who would have beenunemployed otherwise. Some havealso learnt the technical aspect of thebusiness of repairing and fixing of mobile phones in their repair shops-mobile or stationary as the case maybe.On the social benefits of GSM tothe Nigerians, Omeruo points out thatNigerians have benefited from the cor-porate social responsibility of serviceproviders and phone companies [14].Some have provided educational facili-ties, AIDS campaign awareness andamelioration, state-of-the-art ICT labsto educational institutions, scholarshipawards to indigent and deserving stu-dents, financial and equipment dona-tions to hospitals and sponsorship of several events. One of such events isthe Globacom Premier FootballLeague in Nigeria and the African con-tinent with the Confederation of Afri-can Football (CAF) been the benefici-ary. This usually involves setting asidehuge amount of money for sport andfootball development in Nigeria, thehost community, in particular and Af-rican Continent in general. Many indi-viduals have also benefited from thesecompanies by being their ambassadors.Nigerian social life has also beingimpacted on. Relationships withfriends, relatives and loved ones arekept alive through phones calls. In thissense Omeruo says: "I have personallybenefited from the mid night free callsbeing offered by MTN, I have goodtime to talk to my friends and lovedones" [14, p. 4].Other by-products include the factthat GSM has greatly reduced the needand frequency of travelling for thosewho possess mobile phone and haveaccess to it. Instead of travelling todeliver some messages, people justmake the call and thus reduce the inci-dence of road accidents in the country.Olatokun and Bodunwa, in a studyon GSM usage conducted at the Uni-versity of Ibadan, Nigeria, remarkedthat GSM helps in proper managementof Nigerians’ time [13]. That is, it hasallowed for efficient use of their time.Students can call to find out when aclass or examination will hold, lectur-ers can be called to know if a classwould hold or not. Of the respondents,274 (68.2 percent) agreed that GSM isbetter than landline telephony. This canbe viewed from the point that GSMphones can easily be carried about,small and compact, convenient to useand have various subscriber servicescompared to landline phones.Moreover, Ndukwe points to an-other benefit of GSM to Nigeria byemphasizing that business transactionsare far more productive and yet cheaperand more convenient than they used tobe [9]. Citing the example of a jour-nalist, sourcing for news, conductinginterviews, reverting to bosses or sub-ordinates as the case may be, has be-come far more seamless and produc-tive than it used to be. The mobilephone is empowering every social classupper, middle and lower. Ndukwe con-cludes that if there is a list of outstand-ing dividends of Nigeria’s transition todemocracy in 1999, GSM must rank very high on that list if not top it alto-gether.On his own Aihe emphasized thatanother gift of GSM to Nigeria is thatit exemplifies the strength and beautyof industrial regulation [2]. While theuninformed may not fully appreciatethe complexity of telecom regulationespecially in a developing country likeNigeria, the truth is that the NigerianCommunications Commission (NCC)  UP GRADE Vol. X, No. 2, April 2009 57  © CEPIS CEPIS NEWS in the last 7 or 8 years has shown thecountry and the continent at large howtelecom regulation ought to be carriedout in order to preserve the delicatebalance of interests between investors/ financiers, government and telecomsubscribers respectively. It has demon-strated that there are times when moralsuasion should be applied and timeswhen force should be applied and yetother times when market forces shouldbe allowed to play their role. 6 The Success Story of GSMin Nigeria Nigeria is often identified as thefastest moving economy and one of themost advanced ICT market sectors inthe Africa. It has the largest popula-tion in Africa and Nigerian market’shigh level of sophistication makes it anexciting and attractive market. In justa few years, Nigeria has become theTelecom hotspot in Africa for bothtelecom operators and equipment sup-pliers.In 2004, Nigeria now has about fivemillion mobile lines and about onemillion fixed wireless lines, comparedto just about 450,000 NITEL workinglines three years before. Since the GSMlaunch, mobile telephony has rapidlybecome the most popular method of voice communication in Nigeria.Growth has been so rapid that Nigeriahas been rightly described by variouscommentators as "one of the fastestgrowing GSM markets in the world".The number of connected mobilephones in the country rose from266,461 in 2001 to 32,322,202 unitsin 2006, indicating a monumental in-crease of 12,030.18 percent. Accord-ing to the NCC, the total number of mobile subscribers in the country stoodat 18.6 million at the end of 2005, apenetration rate of around 16% andclose to the regulator’s predicted end-year figure of 20 million. The NCCsaid it hopes to see the total number of subscribers grow to 50 million by2010. At the end of 2005, there were1.22 million fixed wireless line cus-tomers in the country.In 2007 Online statedthat the mobile phone sector has beena booming industry [15]. At that timethere were approximately 1.25mlandlines in Nigeria, whereas therewere more than 30m mobile phonesubscribers. Analysts believed that thisgrowth would continue, with Nigeriaovertaking South Africa to becomeAfrica’s largest market by the end of 2007.In the first nine months of 2007, thecountry’s four mobile operators –MTN, Globacom, Celtel (presentlyZain) and M-Tel – added over 7mn netadditions to take the market total toalmost 37mn subscribers. Given thisrobust growth, the mobile sector com-fortably met the year-end target of 39.4mn, taking mobile penetration toalmost 30%. A number of major con-tract announcements prove that opera-tors are still in full expansion mood,with MTN securing a US$2bn loan tofund its network expansion over thenext five years. Meanwhile, in Decem-ber 2007 Globacom became the firstoperator to launch commercial 3Gservices in Nigeria. The service wasinitially available only in the cities of Lagos, Abuja and Port Harcourt, al-though Globacom said that they willbe extended to other major urban ar-eas in due course [6].In 2008 revealed[1] that Nigerians woke up to readabout the sustained growth of the posi-tive surprise that is now synonymouswith the nation’s telecommunicationsector – telephone subscribers were46.2 million! Having about 10% of thepopulation as mobile phone subscrib-ers is indeed a landmark for the NigeriaTelecoms sector –an industry that com-menced within the last decade. How-ever, it’s ironic that the new subscriberfigures were released about the time itwas almost impossible to have a fiveminutes mobile phone conversationwithout losing signal.The advent of GSM has broughtabout new opportunities and chal-lenges particularly to the millions of its users across Nigeria.Many Nigerians believe that theGSM revolution in Nigeria is the sec-ond independence for Nigeria, consid-ering the ample opportunities it offersand the ability it provides for stress-free communication. There is no doubtabout the fact that Nigeria GSM mar-ket is growing at an astronomical rate.Going by the current statistics, Nigeria– that currently account for 14 percentof Africa’s total mobile users – is ex-pected to increase the number of usersby 5 percent before the year ends. Inaddition, the country is expected to add13 million subscriptions above the year2006, which increases the subscrip-tions to 44 percent.Based on the information aboveand available statistics of GSM sub-scription and utilisation from the timeit was introduced in Nigeria in 1999till date compared to other Africancountries, one can emphatically andunequivocally conclude that GSM hasbeen a success in Nigeria. 7 Problems of GSM in Nigeria Every good invention comes withits attendant shortcomings. The sameis true for GSM. Due to daily expan-sion of the GSM technology, the net-works continues to experience prob-lems such as difficulties ininterconnectivity, network congestion,loading of recharge cards and occa-sional and abnormal billing practicesengendered by infrastructural break-down.   These problems associated withGSM since its introduction in Nigeriawill be discussed in this section. Boththe technical and social problems of GSM in Nigeria will be considered andpossibly offer solution and the wayforward to overcome the problems.There are several challenges facingthe GSM sub-sector in Nigeria. One of these is the need to extend mobile cov-erage to every nook and cranny of Ni-geria. At present, mobile coverage isyet to be extended to 40 percent of Nigeria geographical spread. Thismeans that people in those areas can-not benefit from the effects of mobiletelephony. It should be noted that mostof the uncovered areas are the ruralparts of the country where about 70percent of the inhabitants dwell.Another challenge is the need toincrease the number of mobile phonesubscribers. Nigeria is a vast countrywith a population of approximately140 million inhabitants. Thus, most of the inhabitants are not telephone sub-scribers. Though the number of sub-scribers keeps increasing since the ad-vent of GSM in Nigeria, more effortsneed to be made by the operators toensure that most Nigerians own anduse mobile phones. Some steps can betaken by the operators to achieve this.Ndukwe has identified some chal-lenges faced by the Nigerian telecom
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