The Teething Problems
Like every company in its infancy, NITEL was faced with many teething problems at inception; and it spent several months tackling these problems. One of the major problems that faced the new company was how to ease out the unwanted workforce and harmonise both the work ethics and pay structure of the two government agencies that formed NITEL.
By its operational structure NET workers were slightly insulated from the work culture predominant in the public sector of the economy and its pay structure was also different from what obtained in P&T. Both also approached the provisions of their services differently.
While NET leaned more towards the commercialization of its services, P&T viewed its services offer more from the point of social responsibility. This conflict of attitude to processes, work culture and pay structure was noticeably the first obstacle to the development of the new company.
The company was also faced with the challenge of right sizing, the implementation of which created new problems for the management. There were agitations that the exercise was not fairly implemented as many who were affected by the exercise alleged favoritism.
After the first pruning exercise, the workforce was brought to about 17000. But, due to loop holes in the conduct of the exercise there was a new need to fill certain positions that were critical to the operation of the company. Thus, the company soon got into another recruitment exercise that increased the workforce. But again, one main feature of that exercise was that many who were employed then lacked the basic skill requirement to work in a telecom company.
Many who came into the company were not really needed for the job that was given to them. They were engaged based on political sentiments and tribal cleavages. Also in their assignment, square pegs were placed in round holes and consequently staff morale soon became low. Loyalty was factionalised as it was not basically to corporate goals but to individuals. This caused huge problems for the management and the advancement of the company.
Consequently, the first five years of the company was spent by the Engineer Patrick Uchidiuno-led management in handling malignant personnel and administrative issues.
According to Ige’s testimony, NITEL indeed, faced several teething problems. He said, “Initially there were problems about staffing, because of the merger of two organizations, the external and the internal arm of telecommunications in Nigeria. There was, therefore, the need for staff re-orientation as one arm was used strictly to obeying general orders and financial instructions of government, while the other was used to private sector dealings.”
So, there were teething problems for the first five years about staff orientation, restructuring and reorganization.
One other major problem that the new company faced was that it reported to the Ministers of Communication, who were chairmen of the company’s board. The NITEL management could not take any decision except it was approved by the board chairmen. The federal government soon found out that this arrangement was inimical to the progress of the company. It later changed this structure, separating the board from the ministry.
In spite of the fact that there were sufficiently trained technical staff inherited from the old P&T training school to run the core business of the organisation, invariably, there was a dearth of sufficiently experienced personnel to run the organization as a commercial entity with regard to the administrative, legal and financial competencies, thus creating a lacuna that necessitated fresh recruitment from the private sector.
Whereas there were enough technicians, technologists and engineers to take off, but relative to the issues of the collection of revenue, planning, attracting investment, carrying out financial accountability as is in the private sector, it took some time before NITEL mustered the relative human capital for the role.
Telecoms Development in NITEL’s Early Years
The next challenge of the management of NITEL was how to grow the telecommunications network to serve the political, social and commercial needs of the country. This task led to the design of a National Telecommunications Implementation Project (NITP) plan between 1985 and 1986 by the Uchidiuno-led management.
The company was to begin the bid to modernize the public network as part of its mandate by the provisions of the Project. Its implementation commenced in 1986, and was concluded in 1991. This led to the provision of 98 new exchanges, bringing the national total to 212.
The various exchanges were equipped with STD and IDD (International Direct Dialling) facilities that were extended to about 32,000 subscribers. New digital radio and fibre optic cable systems were brought into the network in the following routes: Abuja-Lagos-Ikorodu-Lanlate digital links with a total of 1,604,736 channels; Ikorodu-Lagos fibre optic cable link with 460,800 channels. These were in addition to the analogue microwave system which enjoyed appreciable increase in network capacity.
A new 5,000 trunk, fully digital International Telephone Switching Centre (ITSC) was installed at Victoria Island, Lagos in 1990, bringing to three the country’s international transit switching centers, the first two having been located in Marina, Lagos and Kujama in Kaduna state.
The construction of a fourth ITSC commenced in Enugu. A new Intelsat standard “A” Digital satellite earth station constructed at Victoria Island, Lagos was added to the former two at Lanlate (Oyo State) and Kujama (Kaduna State).
During this plan period, emphasis was placed on improved maintenance culture and customer services satisfaction through prompt attendance to complaints and faults as well as routine issuance of regular monthly bills and bill delivery.
Though the 1986-1991 plan periods witnessed some improvement in the quality of service and the geographical growth of telephone exchanges, the exercise nonetheless fell short of the objectives enumerated in the NTIP.
Telecom development in the early years of NITEL was characterized by long term planning, and all the milestones enumerated in the plan were not attained.
Preceding the Commercial Years
Between 1986 and 1987, seminars on Telecommunications policy were convened with the cardinal objective of evolving a definite policy, which will provide the guidelines for meeting the government’s objectives of growing and modernizing the telecommunication sector and how to meet future developments in the rapidly changing field of telecommunications.
Key issues and decisions of the seminars hinged on how to raise the NITEL services tariff, which at the time, were considered very low. The government at the time sought an appropriate tariff structure to enable the company earn enough revenue to finance its development projects.
The second-tier and foreign exchange market (SFEM) introduced by the Babangida government (which toppled the Buhari administration) had made charges of telecommunications services inadequate and unrealistic. Because NITEL was losing heavily on every call emanating from Nigeria the seminar had recommended an appreciable increase that would earn it a level of profit that would consequently guarantee its independence from government.
The various seminars also highlighted the need for government to embark on a systematic telecommunication development of the rural areas, and grow the network to a minimum of one million lines.
A harmonized strategic planning, systematic network development and modernization, enhanced traffic and revenue generation became the conceived factors for Nigeria telecommunication growth. In the final analysis, much of these ideal considerations were never really actualized.
NITEL: The Commercial Years: 1990-1995
Dissatisfaction in the implementation of the NITP resulted in a number of government-sponsored seminars in which position papers put forward canvassed the way out for NITEL to meet government yearnings in the wake of increasing deregulation, liberalization and privatization that had begun to crystallize in the global telecommunication arena from 1984.
Though there had been some measured efforts to turn around the telecommunication fortunes of the country from 1985 when NITEL was created to 1991, the year 1992 signaled a turning point in the sector with a tempo that heralded that the sector was on the path to achieving the laudable objectives for creating NITEL.
Two extraneous factors ignited this tempo and fanned to flame earlier efforts of the management of the company at goal attainment.
Primarily, the deregulation policy of government had been introduced in 1992, resulting in the liberalization of the telecommunication sector with Decree 75 of 1992 and the setting up of the Nigerian Communication Commission (NCC) to pave the way for other telecommunication operators to come into the field to provide alternative services to the one provided by NITEL.
Secondly, by 1992, through the activities of the government’s Technical Committee on Privatization and Commercialization (TCPC), the status of NITEL changed to become a commercial enterprise and the appendage ‘Limited’ was changed to ‘PLC’ (Public Limited Company). This appendage was however reverted in the last quarter of 1996.
To spur the management of the company to achieving the goals of the commercialization policy, the federal government through the TCPC headed by Dr. Hamza Zayyad signed a performance Bond with NITEL’s new board, headed by Alhaji Dodo Mustapha on May 22, 1992. The agreement gave the company operational autonomy and freedom to seek for funds to finance its projects. By the agreement government freed itself from directly interfering with the finances of the company.
With the TCPC agreement government subvention to the company stopped. Though the board was given the freedom to source, manage and appropriate funds, the federal government still saddled itself with the duty of guaranteeing those funds.
The Quadruplets Struggle for NITEL
With the government green light given to NITEL to source for funds, many systems suppliers expressed their readiness to provide the company with funds for the expansion and development of the telecommunication network.
Global digital system suppliers such as Siemens AG of Germany, Marubeni of Japan, Ericsson of Sweden and ITT Nig. Ltd presented contractor-financing proposals to government to enable NITEL realize its dreams. These four system suppliers began a race towards what can be rightly described as the balkanization of NITEL contracts. They began to evolve strategies on how best they can serve the Nigerian telecommunication need.
They were outstanding in their quest to capture the juicy potentials open to international systems suppliers and the intent of the newly created company to embrace the new digital technology and modernize its network.
As far back as 1986, they had organized several workshops and presentations to demonstrate the superiority of their digital systems and canvassed why NITEL should embrace them. Siemens projected its version of digital technology, Extended Wide Switched Digital Network (EWSDN), Ericsson its Axe 61, and ITT its System 12 as the best options. Marubeni through its parent company, Nippon Electric Corporation (NEC), also presented its version of digital technology.
In that year NITEL management threw open its door for these companies to present their proposals on how they intended to expand the country’s telecommunication network based on the digital technology.
In a bid to accommodate all the four bidders and speed up the process of modernizing the network, the management under Patrick Uchidiuno opted for a proposal that divided the country into four contract implementation zones and appointed the four international systems suppliers to handle assigned regions.
Siemens presented a DM500 million contract-financing proposal to handle the Lagos and Abuja digitalization programme; Marubeni offered to execute the South East network; Ericsson was given the North East task, while ITT got the South West project. The World Bank offered another $500 million loan to handle some of the projects, especially the South West end of the programme.
Thus, from 1992, the tempo of network expansion and modernization gained momentum. Priority was given to digitalization of the network to equip it for the new changes of meeting the ever-growing customer demand for quality service delivery. But due to a number of reasons ranging from political consideration, technical performance and economic blockades on the part of some contract financing arrangements, the rationalization of the contract execution plan was not fully realized in any of the four implementation zones.
For instance, while the Lagos and Abuja contracts under Siemens got underway, the South East project was stalled due to the inability of Marubeni and government to reach an accord on the terms for the loan it offered. Both the federal government and Marubeni/NEC were not able to settle a dispute on financial settlement that was outstanding over a previous contract in the agriculture sector. On the heels of this came suggestions from within the NITEL’s management that the country’s digitalization programme could best be served through a turnkey project.
The arguments for the execution of NITEL contracts through the turnkey model gained currency between 1992 and 1996, during the Ibrahim Babangida era. The period in view was characterized by delay of several contracts. Typical among these was Ericsson’s inability to complete the North Eastern project in good time. There were several issues relating to the Bauchi and Jos networks between Ericsson and the NITEL management.
Contracts that were awarded to ITT Nigeria Limited were also badly hit. There were cases relating to several equipment that were brought in by ITT being left to waste in various warehouses because the contractors handling the buildings to house the exchanges could not meet contract deadlines. Besides, ITT’s contract also suffered a setback due to reports in the international media that its technology had a system error which should be corrected before the contract could go ahead.
The ITT contract predates the 1992 commercialisation. ITT owned by Late Moshood Abiola, had had a head start long before the other three companies, but he blew it through complacency and perhaps his belief at the time that the then government under General Mohammadu Buhari was going to over look the issue of discrepancy that was reported against the company’s technology.
Chief Rufus Odusanya, a onetime Secretary of the Communication Ministerial tender board that assessed NITEL projects, who was at the centre of the case at the Ministry of Communications gives a graphic detail of what happened and how ITT eventually lost out:
“ITT caused the whole problem, because the first project awarded was to ITT. In just about two weeks, Buhari who was the then head of State hosted them in Abuja to sign the contract. Abuja was not the capital then, but they flew there and signed the contract. Shortly after the signing, we received a magazine in the Ministry which reported some discrepancies in the ITT Systems 12 equipment, and advised that it should not be used unless it was corrected”.
According to Odusanya’s testimony, the draft paper on the ITT contract proposal was put off because it would have been unethical to detect a fault and yet allow government to go ahead with it. As a result, “I put in a memo to my boss drawing his attention to what the magazine reported. I did not fail to suggest that it was better that Abiola and his team be invited so that they would find a way to rectify the fault. It was something that could be rectified. After all, ITT equipment was in use in other countries, and I am sure they would have rectified the problem in those places”, Odusanya explained.
“Unfortunately, when Abiola’s attention was drawn to this, his team dilly dallied: they just wanted the project to go ahead as signed. They were adamant that the project should be executed as signed, but we were just as insistent on the need to rectify the system error.
That was how the South West project was delayed. It was only after the ITT contract was put off that Siemens brought their own contract proposal and the contract financing offer of DM500 million for the Abuja digital project. This was signed two years after the ITT project was put off. During his tenure as Communications Minister, Chief Olawale Ige insisted that the ITT project be revisited. And coincidentally, the problem with the ITT equipment had been rectified at that time.
The two year delay of the South West digitalisation contract awarded to ITT brought about the introduction of the digitalization system first in the Northern region, beginning with Abuja. Siemens was also to go ahead to sign contracts for the Lagos zone and some portions of the Southeast.
Systems compatibility, inter-operability and ease in project management and monitoring, were also advanced as reasons for resorting to the turnkey option in building the telecommunication network.
The South West plan, which was to be financed by a $200 million World Bank loan, could not go through at the time following the withdrawal of the global financial institution on political grounds.
Nevertheless, NITEL went ahead with the first phase of the digital project, which was implemented by Siemens under another World Bank loan package amounting to DM500 million. The loan was backed by the German government.
In June 1990, the first 500 line rural digital telephone exchange at Irrua, in Edo State (then Bendel) was commissioned. The commissioning of this exchange in the village of the then Vice-President Admiral Augustus Aikhomu was however met with criticisms.
The argument was that Irrua was not a commercial centre, and therefore, unsuitable for the kick starting of the digitalization of the country’s telecommunications network. In September 1990, the incumbent President, Ibrahim Babangida, commissioned the first phase of the new Abuja digital telecommunication project.
These two efforts brought about a major turning point in Nigeria’s bid to adopting modern techniques towards enhancing efficient and reliable telecommunication services for its citizens.
In 1992 alone NITEL had added 149,484 digital lines to its existing total of 295, 370 analogue telephone lines as at January, 1985 when it commenced operations. This increased its network capacity to about 500,000 lines under a 1990-1992 rolling programme of injecting 374,500 digital lines into the network. Notwithstanding these efforts, the fruits thereof fell short of the target.
From the NITEL Story book
