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Rural Telephony: 10 months later Shittu yet to identify investors with $4b

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In June 2017, in far away Geneva, Switzerland, the Minister of Communications, Mr. Adebayo Shittu and the leader of Nigeria’s delegation to the World Summit on the Information Society (WSIS FORUM 2017), through the media aid circulated news of a supposed business deal to facilitate over $4 billion telecommunication investments from India to Nigeria, especially on rural telephony.

At one of the sessions on the various business opportunities that beckon in the nation’s telecom sector and the need for investors around the world to take full advantage of Nigeria’s strategic relevance and positioning in Africa, Shittu extended a hand of fellowship to Indian investors and leading telecom stakeholders.

The beginning

The National Rural Telephony Project (NRTP) to extend telecommunication services to the rural communities dates back to Chief Olusegun Obasanjo’s administration.

To achieve the objectives of the project the Federal Government, through a $200 million concessionary loan from China, awarded the first phase of the project in 2001 to two Chinese companies – Alcatel Shanghai Bell (ASB) and ZTE Corporation (ZTE).

ASB was meant to provide the fixed wire-lines while ZTE provided the fixed wireless – code division multiple access (CDMA) systems. To accelerate deployment, the country was segmented into seven zones – Abuja, Bauchi, Enugu, Kaduna, Kano, Ibadan and Port Harcourt – while each zone is made up of six states (save Kano which has four).

In 2006, the Federal Government commenced the process to lease the networks to private operators to  manage and ultimately own  under the public private partnership (PPP) arrangement.

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Even an inter-ministerial committee was set up under the chairmanship of the Bureau for Public Enterprise (BPE)  to develop the framework for participation of private operators in the NRTP, and also to facilitate the process of identifying and selecting suitable operators.

In late 2008, under the then Minister of Information and Communication, Professor Dora Akinyili (now late), the financial bid was publicly opened  and fire companies emerged as the preferred bidders in the various zones.

There are as follows: Suburban Limited for Abuja and Kaduna Zones at the cost of $47 million and $42 million respectively, Gicel for Bauchi Zone at $30 million, Voicewares for Enugu Zone at $57 million, Key Communications for Ibadan Zone at $38 million, and Hezonic for  Port Harcount Zone at $38 million. Since the award of the contracts to the companies, the execution was stalled.

Bureaucracy/political interference sets in

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Not until a year after, the official letters of contract award, which should have been given to the winners not later than two weeks from the opening of the financial bids, were never released!

Later, the then Attorney General of the Federation (AGF), Mr. Michael Aandoka, advised that the matter be referred to the BPE for a certificate of no-objection.

By now, President Musa Yar ‘Adua (now late) was in power. He ratified the transaction and directed without any conditions that letters of award be issued to the winners and the networks handed over.

The disagreement between the AGF’s office and the BPE was a huge setback to the process.

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In 2014, under Dr. Goodluck Jonathan’s era, Chairman, senate committee on communications, Gilbert Nnaji, felt irritated by the back and forth process. It took a swipe at then Minister of Communications Technology, Mrs Omobola Johnson, over the non-take off of the National Rural Telephony Project despite government’s huge investments in the project.

Shittu’s era  

So, you can imagine the feeling in the industry when news broke that recipe was coming the way of the rural dwellers after the Minister’s captivating account of Nigeria’s government’s new capabilities, transparency and the new set of business ethos under President Muhammadu Buhari, as the impetus required for investors to be engaged in legitimate businesses without let or hindrance to get adequate and timely returns on their investments.

“The audience who were held spell bound by the various giant strides of the Minister, as encapsulated by the different on-going reforms in the agencies under the Ministry, and in the overall telecom sector in the country were desirous of doing business in Nigeria”, Victor Oluwadamilare conveyed in the press release.

It was even stated that at a side meeting with the ostensibly elated business gurus and key investors, “a couple of Indian entrepreneurs convinced of the Minister’s olive branch and sincerity of purpose, jumped at the offer to pull resources together in excess of $4 billion, to be invested in Nigeria’s telecom sector with emphasis on rural telephony and grassroots development.

The two parties were due to meet two months later (August 2017) to fine tune the necessary modalities.

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Well, since then, Oluwadamilare has since relinquished his appointment as the Minister’s aid and nothing has been heard about the supposed investors with $4billion funding for rural telephony, crucial to achieving the 30% broadband penetration target for 2018. Is this another failed attempt to get it right?

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The truth is that until Nigeria develops her rural area, its development will still be full of limitations.

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