PETER CUNLIFFE-JONES, Lagos | Monday
MTN Nigeria Ltd, the Nigerian subsidiary of South Africa’s Mobile Telephone Networks (MTN), launches its new mobile network Wednesday in a market that could eventually be a bigger earner than South Africa.
Mobile phones are spreading across Africa, circumventing infrastructure problems, but, until this week, access to mobile phones has remained limited in the continent’s most populous country.
Nigeria has a population estimated by the United Nations at more than 121,8 million, close to three times that of South Africa, and one of the lowest tele-densities in the world, with just four phone lines per 1_000 people.
MTN has some 3,5-million subscribers in South Africa and is predicting it will have 1,2-million subscribers in Nigeria within three years.
Under the terms of the company’s operating licence, granted in January, MTN has to provide 1,5 million lines within five years of its launch.
“We expect to go way beyond that. Potentially, potentially, this market could be even bigger for us than South Africa,” MTN Nigeria’s chief marketing officer Garth Hewitt said on Monday.
MTN believes that, at its current tariff structure, seven million Nigerians could afford a line, far more than can be rolled out immediately.
“There is such latent demand, one of our biggest challenges is going to be managing the frustration of the demand that is unsatisfied,” he said. “Already this will be one of the biggest and fastest roll-outs anywhere in the world.” The company won its 15-year operating licence, one of three given out by government, in an auction in January, paying out $285-million.
Along with the set up costs, it expects to invest $1,4-billion and to reach break-even after four years.
The company will put its first lines on sale Wednesday in Lagos, selling post-paid lines mainly to corporate clients.
Pre-paid services will be launched to the public in Lagos on August 23 and then elsewhere around the country.
“Because of the credit issue, we will be putting a major emphasis on pre-paid services. It is the best system all across Africa,” Hewitt said.
The cost of setting up the system, and the licence, has pushed up call rates and that has generated criticism in Nigeria.
MTN insists its rates are justified.
“People think the prices are too high, exploitative. That is far from a reality.
“You compare Nigeria with other countries, and here we have to put in our own power, we have to put in our own transmission system, and even property here is expensive. The licence is the most expensive on the continent,” Hewitt said.
President Olusegun Obasanjo is expected to make a symbolic first call on the MTN system on Wednesday. – AFP