The NITEL Story
On assuming office as Military Head of State in 1975, General Murtala Mohammed discovered that the number of telephones in the country was just about 52,000. Dissatisfied with this situation, he initiated a plan to increase the number to one million within 18 months. This objective led to the invitation of several system suppliers and contractors—among them ITT Nigeria Limited, Siemens, Ericsson, Marubeni West Africa Limited, and Thomson CSF—to submit proposals on how to achieve this target. After due assessment of the proposals, the Federal Government finally signed a number of contracts with these companies to achieve the goal. The contracts involved the provision of Emergency Contingency telephone exchanges in 44 locations nationwide.
The companies were required to import and install equipment in several exchange buildings, many of which were not ready at the time. The 44-exchange contingency plan was later followed by another plan to introduce exchanges in an additional 147 locations across the country.
Regrettably, these contracts—worth several hundreds of millions of dollars—failed to yield the desired results. Many projects were not executed, while those executed were poorly implemented. The result was the abandonment of several pieces of equipment in warehouses across the country.
When the government realized that the funds disbursed had failed to produce commensurate results, it decided to merge the Post and Telecommunications (P&T) with NET, which at the time was an autonomous and viable government agency. By then, Murtala Mohammed had been killed in 1976, and General Olusegun Obasanjo had assumed leadership of the country. Obasanjo’s second-in-command, the late General Shehu Musa Yar’Adua, was appointed chairman of one of the many committees set up by the government to review these contracts.
Chief Patrick Kentebe, a former Commissioner at the Nigerian Communications Commission (NCC), also headed one of the committees tasked with investigating what went wrong and how the issues could be addressed.
One of the findings of the committees was that there were many gaps in the awarded contracts. There were no buildings to house exchange equipment, inadequate External Line Plants (ELP) to connect exchanges and subscriber premises, and insufficient transmission links.
During the period spanning the Obasanjo regime and the NPN government of Alhaji Shehu Shagari (1976–1983), the committees moved back and forth, often trading blame between the Ministry and committee members. When General Muhammadu Buhari took over leadership of the country following the December 31, 1983 coup that toppled Shagari’s government, Colonel Ahmed Abdullahi was named Minister of Communications.
One compelling recommendation from the committees was that the telecommunication arm of P&T be excised and merged with the Nigerian External Telecommunications (NET). The idea was to give the new company a commercial status similar to that of NET.
The new company was to handle the development and provision of both national and international telecommunication services.
Before 1985, P&T was responsible for domestic telecommunications, while NET handled international communications. The government wanted a single entity to manage both. Backed by the Companies Decree of 1968 and the federal government’s reform efforts aimed at growing the telecommunications sector, a committee was set up to recommend how best to achieve the merger and determine the structure of the new company.
The creation of NITEL coincided with the global push to modernize telecommunication networks in line with the digital revolution sweeping across the industry. Many national networks were transforming their analogue systems into modern digital technology. At home, dissatisfaction was rife: after almost a century of telecommunications in Nigeria, the country had fewer than 250,000 lines.
Moreover, these lines, including all national trunks, were based on analogue technology. More worrisome was the fact that though the international satellite gateways at Lanlate (Oyo State) and Kujama (Kaduna State) still enabled external communications, they were already becoming obsolete.
The external line plants were also outdated. By contrast, experiences in countries such as the United States (AT&T) and the United Kingdom (BT) showed that national telecommunications companies could only perform optimally if privatized and freed from government control. Indeed, the government’s plan was that the soon-to-emerge NITEL would eventually be privatized. BT had shown the way in 1984 with its privatization, and the rest of Europe looked to the UK as a model.
Engineer Olawale Ige, who rose through the ranks from a pupil engineer in P&T to become Minister of Communications and later Commissioner at the NCC, gave detailed insights into the reasons for NITEL’s creation and the objectives set for the company.
“Nigeria’s membership of the International Telecommunications Union and the global trend compelled the government’s decision. The British Telecoms Services had been the monopoly organization providing telecommunications and postal services in the United Kingdom. But it soon became apparent that the provision of national telecommunications was being hampered by government’s yearly budgets, which were increasingly inadequate to cope with the pace of sectoral development.
“The structure of telecom network development posed challenges to funding and expansion. Essentially, telecom is in three parts,” Ige explained.
“First, there is the access technology to the house, then called External Line Plants. This involves the cables laid outside in the conventional system of providing telephony and the connection of these cables to consumer premises. The second part is the consumer premises itself—the instruments therein: the telephone, PABX, fax machine, video machine, and other types of terminal equipment.
“And the third is the brain of the network, where interconnection to the main subscribers occurs. This constitutes the transmission link that connects one location, town, or environment to another. So, when you put telephony within Lagos, you are using the Lagos switching system, the external line plant, and the customer premises. But when you move to Ibadan, what carries that traffic from Lagos to Ibadan is the transmission path, now known as the backbone.”
Ige further noted that, just as in the UK and the USA, it became clear that though telecommunications were commercially viable, government budgets and planning could not keep up with demand or the rate of development. Nigeria’s government, therefore, considered forming a commercially viable telecom company.
“Initially, government thought of making the company wholly owned. But it also wanted to create an enabling environment with sufficient incentives for workers and one in which banks would be motivated to invest in the enterprise because of the high returns expected, in line with best practices worldwide. These were times when German and British Telecoms were being privatized,” he said.
With this global outlook, it was not surprising that “wise counsel informed government to take the decision then that telecom would be better run as a commercial business,” Ige added. The idea of merging P&T’s internal telecommunications arm with external communications (previously managed by Cable & Wireless of the UK before it became Nigerian External Telecommunications—NET, and later NET Limited) thus gained ground.
“NET, as a limited liability company, was solely responsible for external telecommunications. In the wake of the emerging reforms, the government excised the telecommunications arm of P&T and merged it with external communications to create a single entity handling both domestic and international services, and to run it as a commercially viable business,” Ige explained.
Once the decision was reached to form the new company, the government appointed a committee headed by an official of the Ministry of Communications.
The committee’s terms of reference included examining all the problems likely to arise from the company’s creation. It was to recommend ways of handling staff and equipment issues from the merger, address division of labour, and prune the workforce. At the time, the combined staff of P&T and NET was about 31,000, but following the committee’s work, this was reduced to 17,000.
To fine-tune the recommendations, British Teleconsult (BT), a subsidiary of British Telecoms, was contracted to bring its experience to bear on the new NITEL. BT had become a global reference point for governments seeking to commercialize and privatize their Post, Telephone, and Telegraph (PTT) agencies.
The new structure adopted a management model comprising a Managing Director, Deputy Managing Director, and five General Managers, corresponding to the division of the country into five zonal operational centres. NITEL became operational on January 1, 1985, with Engineer Patrick Uchidiuno, a former P&T staff, appointed as its first Managing Director.
to be continued.
