Obasanjo Details Nigeria’s $1.2B Earnings from Telecom Licences

Obasanjo explains the Nigerian government’s impressive $1.2 billion earnings from telecom licences. Get all the details on this revenue source.

At the emergence of mobile technology in Nigeria, major telecom operators such as MTN, Globacom, Airtel (formerly Econet), and 9mobile (previously known as Etisalat) paid an estimated $1.2 billion to the Federal Government for their license fees.

The Nigerian economy came to rely heavily on the telecom industry, which was established in 2000 with significant financial backing.

During the book launch and exaugural lecture of former The PUNCH editor, Dayo Oketola in Lagos on Tuesday, Former President Olusegun Obasanjo disclosed this information.

Insights were shared by him on how his administration declined offers to vend telecom licenses for as little as $3 million; rather, they insisted on vending them at their authentic value.

MTN, Glo and Etisalat each paid $280 million for their licenses. However, as the last entrant to the sector, Etisalat contributed a higher amount of $450 million.

Obasanjo stated that initially, the first three mobile telecom companies were granted licenses at a cost of $280m each. However, it was later discovered that certain individuals within the previous government intended to sell these same licenses for only $3m to their acquaintances.

According to him, even though these investments have resulted in noteworthy advancements, it is vital to establish appropriate circumstances that can allure further investments and uphold the growth of the sector.

He stated that although Nigeria can still attract investments today, the appropriate conditions must be established to re-attract such funds.

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Having launched in Nigeria back in August 2001, MTN – a South African company – rapidly emerged as the market leader. Two years later, telecoms firm Globacom burst onto the scene with an inventive per-second billing system that ultimately motivated both MTN and Econet to integrate similar processes.

Commercial GSM services were introduced by Econet Wireless Nigeria in August 2001, just a year after its launch in 2000. The Nigerian telecom market welcomed another player when Emerging Markets Telecommunications Service began trading under the name Etisalat back in 2007.

Additionally, he admitted that the telecommunications sector experienced considerable influence from operators’ competition such as MTN, Econet and Glo.

“We accomplished competition. The trio were in a contest with MTN seemingly having the edge in terms of reach, followed by Glo and then Econet causing some disagreement among themselves initially but eventually resolving it. As for their arrival, they came last,” stated the former president.

Landlines were the primary mode of communication before mobile telephony arrived in Nigeria circa 2000. However, they were scarce and commonly viewed as a luxury available only to those who possess affluence during this era.

Despite significant investments, limited infrastructure resulted in less than 500,000 phone lines being secured according to the ex-head of state who shared how Nigerians encountered notable challenges.

The tale of telecommunication, specifically mobile communication, is quite intriguing as a lot had already been accomplished prior to its arrival.

Obasanjo revealed that despite inviting companies from America, France, and Britain, they were only able to produce 500,000 lines after spending a considerable amount of money. This has resulted in people having to wait in line for telephone services.