The telecoms numbers that didn’t add up

Between 1985 and 2000 Nigeria mysteriously spent more than $5 billion digitalizing a landline telephone network that ended up with just 300,000 connected users. At the time, Germany’s Siemens had a dominant share of contracts from state owned Nigerian Telecommunications Nitel. Nitel is now defunct, Siemens had to pay fines in Europe for bribing Nigerian officials, and a former Nigerian telecommunications minister, David Mark, now senate president, must rue the day he once declared that “telephones are not for ordinary people.”

They weren’t back in the 1990s – only one in 300 Nigerians had a line. The likes of France Telecom, BT, Vodafone and other big international telecoms companies misread this fact when Nigeria auctioned off GSM licenses in 2001. The companies decided against entering the market because they felt it was too risky and there were insufficient Nigerians with enough money to afford a phone to make investment worthwhile. The problem across Africa, however, was not that ordinary people did not have money for phones but the extraordinarily inefficient way in which state owned telecoms monopolies had been run.