It has been stated, severally, how that an avalanche of reforms swept across national telecom networks in the early 80s. The concepts of liberalization, globalization, competition and privatization were overriding issues in local and international discourse. These ideas influenced national policies. In some cases, hitherto Public Switched Telephone Networks (PSTN), which enjoyed monopoly, had their dominant status broken. Some countries introduced second operators.
The United Kingdom pioneered the process in 1984 and she was followed by other countries of the European Union who saw the UK example as worthy of emulation. While in some others, the market had been ripped open to allow more than one operator come into the field. The principles of competition, fair play and appropriate pricing of services were adopted in advanced networks. The wind of change in global networks blew in the direction of Nigeria when in 1986 and 1987 the Ministry of Communication held a number of seminars to address a reaction to the changes in the global environment.
Specifically, between January 26 and February 6, 1987, government held a National Seminar on Telecommunications Policy for Nigeria with the cardinal objective of evolving a definite policy which will provide the guidelines for meeting government goals and future development in the rapidly changing field.
Besides addressing the evolving concept with special reference to the Nigerian monopoly network operator, government had become dissatisfied with the low level teledensity. It had considered a teledensity, which then stood at 0.33 million phones to an approximately 100 million people and the concentration of the existing numbers in urban areas as objectionable and anti-social.
At the seminar the government had set the goal of making telephone services to be within reach of all by the year 2000 whereas NITEL’s installed capacity at this time stood at 400,000, while only 205,000 were connected, according to figures released at the policy seminar. The government also had identified the need to recognize telecommunications as a support component for other development sectors such as agriculture, tourism, health and education. It had reckoned that it could fund telecommunications by appropriation from public sector consumers of telecommunication. Though the approach was considered strategic then, it never made any requisite impact in the funding of the PSTN.
In spite of government efforts, NITEL’s services continued to be characterized by low call completion, low investment rate, uneconomic investment pattern and management as the company was compelled by government to establish exchanges in uneconomically viable areas of the country. Congestion of exchanges was rampant, followed by poor system maintenance.
Two opposing groups emerged at the discussions. There were those who out rightly opposed the introduction of private operators and the privatization of the national carrier. The other group canvassed the privatization of the public carrier in line with growing global trends.
Professor Buba Bajoga who later became the Managing Director of NITEL and Dr Bala Usman were most vocal against privatization. Among the key protagonists for privatization were the telecommunications business mogul, Late Moshood Abiola and Ernest Ndukwe, who at the time, was Managing Director of GPT West Africa.
Despite opposing views against privatization, the 1986/1987 seminars had favoured the emerging concepts, in principle, with a call on government to set in motion vehicles for realizing the resolution. Though it considered privatization desirable, it nevertheless recommended commercialization of the PSTN as the first step toward its eventual privatization.
Some government functionaries and consultants even toyed with the idea of regionalizing NITEL’s operations. The top hierarchy of the NITEL management had given support to this idea as a possible alternative to government’s move to privatize the national carrier. The plan put forward then was to convert the five zonal operations of the company to subsidiaries with NITEL as the holding company.
This proposition did not sail through as the company maintained its status as a commercialised government company. Political considerations, which saw the regionalisation plan as bid to weaken telecommunication development in the North, which was seen then as the weakest of the five regions, had its sway.
Prior to 1990, the government had set up the Technical Committee on Privatization and Commercialization (TCPC) to realize the government’s new resolve to privatize and commercialise certain key government enterprise. One of the companies government listed to be commercialized was NITEL. The body headed by Dr Hamza Zayyad set to work in 1991 and eventually came up with a recommendation to commercialise NITEL.
The Government accepted the TCPC recommendation, which those who opposed the privatization of the company saw as a middle ground. And to ensure that the management of the company performs in line with the expectations of the commercialization policy, TCPC drew up a performance bond with key performance indicators and asked the management to sign it. The Otiji led management and a constituted independent board of directors led by late Alhaji Dodo Mustapha, which was set up as one of the conditions for the commercialized company, accepted the proposal and signed the document.
At the time NITEL was commercialised the global growing trend gravitated towards deregulation, competition and privatization which was diametrically opposed to the foundation of the public sector approach of monopoly on which Nigerian Telecommunications was founded. The government’s ideological and economic policies at the time were beginning to tilt towards liberalization as pursued by the Structural Adjustment Programme (SAP), and in tune with the European example in deregulation. It was not unexpected, therefore, when the government took a decision to liberalize Nigerian telecommunications in 1992.
Even though the Otiji-led management executed the performance agreement creditably, many, such as Ige still faulted the TCPC arrangement then because government remained the sole owner of NITEL under the commercialization plan put in place by the TCPC. The Technical Committee on Privatization and Commercialization, he argued, was expected at the time to perform a similar task as the Bureau for Public Enterprise (BPE) which it eventually metamorphosed to.
Ige commented thus: “I happen to have been in government then, and though the move made by the TCPC was in order, but the management of these agencies were a little bit confusing because on the one hand there was a presupposition of autonomy as commercialized agencies, yet as agencies of government, they were not isolated from the laws governing government activities. They still had to perform according to general orders and financial instructions of government”.
“The TCPC came along, gave them some contracts to sign and at the same time, tried to amend their methods of operations without government participation so they were caught in between. On the one hand the TCPC was writing directly to them asking them to operate commercially and giving them some level of authority which government as at that time had not certified in council, so there was some kind of dichotomy there”, Ige said.
Because government pursued the TCPC objective halfheartedly, it was not long before the model was scuttled and NITEL reverted to its former status without an independent board.
It even fell lower, to some extent, when it had a sole administrator appointed for it who reported to the Minister of Communications between 1994 and February 1995.
