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THE IMPACT OF INTRODUCTION OF GLOBAL SYSTEM FOR MOBILE COMMUNICATION (GSM) ON THE NIGERIA ECONOMY

CHAPTER ONE

INTRODUCTION

1.1    Background of the Study

It a crystal clear that without communication, there would be no society. Communication gives room for peaceful co-existence among human being. That is why there are series of school of thoughts on the concept of communication. Development and growth of any country depends on the mode of communication of international relations, that is why most countries of the world has its own official language. This shows that communication is pertinent in all human activities and development. Communication has been defined variously by academic scholars and students, but the older meaning of the term in English can be summarized as passing of ideas, information and attitudes from person to person.

Prior to the emergence of the Global System for Mobile Telecommunication (GSM), table telephone and cellular phones existed in Nigeria. The telephone industry was monopolized by the government during pre-liberalization period at it was thought that only the government had the funds to develop the nation’s telephone infrastructure. Before independence in 1960, telephone access was first developed in 1886 to provide a telecommunication links between British Colonial administration in Nigeria and their home country, Britain (Ajayi, Salawu and Raji, 1999). Thus, telephone access was severely limited to these few administrators. The world is fast becoming a global village and a necessary tool for this process communication, of which telecommunication is a key player. The quantum development in the telecommunication industry all over the world is very rapid as one innovation replaces another in a matter of weeks. A major breakthrough is the wireless telephone system, which comes in either fixed wireless lines or the Global System for Mobile Communication (GSM) (Wojuade 2005).

Global System for Mobile Telecommunication (GSM) was recommended to the Military administration of General Abdulsalam Abubakar which caused Nigerian Communication Commission (NCC) to grant licenses to Celia Motophone Limited, Mobile Services Limited and United Networks Limited and they were charged to provide GSM network services in Nigeria. However, the Olusegun Obasanjo administration in 1999 tagged the exercise fraudulent, revoked the licenses and introduced the telecommunication policy which empowered the Nigerian Communication Commission (NCC) to re-organize, auction and issue fresh licenses to successful companies who could provide for Nigerians an efficient and cost effective telephone system.

After rigorous bidding and payments of license  fees of $285million, three companies, Nigeria Telecommunication plc (NITEL), MTN Nigeria and Econet Wireless were granted Digital Mobile Licence (DML) on 23rd March, 2001 with 90days deadline to start operation, operating license validity of 15years, five years exclusivity period, dual band frequency assignment, a waiver of annual operating levy (not more than 25percent of annual turnover) direct international access for the first year of operation, direct international access for own subscribers to facilitate roaming. Thus, on 7th August, 2001, Econet Wireless (now Airtel) commenced operations for GSM Services in Nigeria, followed by MTN, Nitel, Globalcom and recently Etisalat. According to NCC, there are 63 million GSM subscribers in Nigeria as at 30th September, 2010.

In Nigeria, there are various categories of GSM products and Services. Conceptually, the users include the high political office holders, movers and shakers of the society, youths, entrepreneurs, artisans, military rank and file and many more. With the passage of time, people are more inclined towards technology and mobile phone is the burning example of the technological influence upon human being. You can talk with others, record some spectacular moments of life, listen to music, install game, application, videos, transfer data and files to other compatible devices and visit World Wide Web, these are the basic qualities of the latest mobile phone which makes life faster and mobile. Therefore, looking at various uses of GSM product and Services it bring to mind the great impact and influence the new technology has brought to bear on the time of Nigerians.

In the recent past formal/informal communication were carried out through letter writing, a process which take upward of three month to move from one part of the country to another, but it is common place today to sent or call short text message to9 one or more individuals at the same time. Some folks have become fashionable with trendy handsets and special ring-tones. To this class your handsets or ring-tone must make a statement as to what class one belongs. They believe that poor folks tend to buy cheap GSM handsets while the high and mighty carry more expensive handsets. Some GSM handsets are equipped with digital cameras which come handy at occasions where events are recorded for the future. Those who are familiar with the computer environment could transfer such pictures to screen savers, send them to others via the internet or print them with colour printers. GSM handsets have become mobile album of some sorts.

Others are with built-in radio for news, sports, music and entertainment in an attempt to replace transistor radio. It could be carried from one place to the other without interference with incoming calls or messages thereby making users to be up-to-date with information as they unfold in the course of the study. Journalists have come to appreciate the immense contributions of GSM to their work of news gathering, telephone interviews and reporting have become common place especially in the electronic media as well as video clips and photographs on the spot to support new stories.

The GSM handsets are equipped with calculator that could take up 12 digits, calendars beyond 2050, time, date, torch light, alarm clock, browser, and many more. Advertisers are catching in on the GSM revolution as products and services are regularly advertised through the GSM thereby boosting sales and increasing profits for the growth of the economy. For want of relaxation or fun, facilities like games are abundant on GSM handsets to task minds and relax the individuals. GSM has reduced the cost of doing business as it has shortened distances, bridged gaps between business associates, facilitate work coordination, manage time effectively thereby increasing productivity. The introduction of the GSM makes appointments more re-assuming as cancellations of meetings are immediately communicated. Business in Nigeria has improved with the introduction of GSM, goods time, goods and services are delivered in good time, delays are better managed and crisis are timely averted.

Families have become closer than ever through the use of GSM, information is passed easily to members, especially when partners are staying apart due to work, school or other challenges. Equally important feature of the GSM is the ability to connect to the internet with the Blackberry. This has made communication a lot easier for business men and women and others who require the internet to do their work. The Blackberry gives access to the World Wide Web in any location within or outside the work environment. Seasonal greetings, religious messages, invitation to ceremonies and others have found a safe heaven with the GSM because it saves time, money to use the electronic device than the conventional methods of invitation or seasonal cards.

1.2   Statement of the Problem

Without mincing words, communication is a major driver of any economy. Nigeria is not left out in the race for rapid development, as the years of economic reversal via management have had of adverse effects on its rate of growth and development. The Nigerian telecommunication sector was grossly under – developed before the sector was deregulated under the military regime in 1992 with the establishment of a regulatory body, the Nigerian Communication Commission (NCC). Since then, the NCC has issued various licenses to private telephone operators (PTOs) to roll out both fixed wireless telephone lines and analogue mobile phones. The return of democracy in 1999 however paved way for the granting of GSM licenses to three service providers, MTN, ECONET, (which is now AIRTEL) and NITEL plc in 2001; with GLOBACOM joining in 2003. Seven years after the introduction of GSM in Nigeria generally, problems association with usage and effects of GSM is still present. Users are still faced with challenges of how to maximize the advantages brought by new technology, manage high tariffs, cope with poor services, face challenges of theft, mobile lies, scammers and host of others. Recently, the Federal Road Safety Commission (FRSC) identified use of GSM while driving as a major cause of road accidents in Nigeria. School authorities have noted in recent past, the astronomical increase in the use of GSM by students to cheat during examinations. On the family front, couples are known to have quarreled, instituted divorce cases over evidence of infidelity by one of the partners with the support of the GSM. Fraudsters have cashed – in on the GSM device, using it as a reliable tool to dupe, steal and kill innocent victims.

1.3  Research Questions

To achieve the objective of this study, the following questions were raised.

i.  Does the introduction of GSM provide job opportunities to Nigerians?

ii.  Has the introduction of GSM reduce the rate of crime in Nigeria?

iii.  What are the contributions of GSM to the Nigeria economy?

iv.  Has mobile telecommunication (GSM) increased income and the living standards of Nigerians?

1.4 Research Hypotheses

The following tentative statement should be treated for significance to help the researcher make valid conclusions in the course of the project, these are:

Hypothesis I

Ho: The introduction of Global system for Mobile Communication has no significant impact on the Nigerian economic development.

Hi: The introduction of Global system for Mobile Communication has significant impact on the Nigerian economic development.

Hypothesis II

Ho: Introduction of Global system for Mobile Communication has not reduced the rate of crime in Nigeria.

Hi: Introduction of Global system for Mobile Communication has reduced the rate of crime in Nigeria.

Hypothesis III

Ho: The advent of Global system for Mobile Communication has no significant impact on job creation in Nigeria.

Hi: The advent of Global system for Mobile Communication has significant impact on job creation in Nigeria.

1.5 Aims and Objectives of the Study

The specific objectives addressed in this study are the above research questions which eventually dove – tailed into research hypotheses.

This research work aims at:

i.  Determining the direct impact of GSM on the development of Nigeria economy.

ii.  To serve as a guide to policy makers to review the policy on telecommunication so as to allow for more and more competitors to engage in the telephony services.

iii.  To determine the effects of GSM on users and society at large.

iv.  To find out the impact of GSM in Nigeria economy.

v.  To expose operations and the challenges facing network providers.

The purpose of this study is to investigate the impact of Global system for Mobile Communication (GSM) on Nigeria economy and emphasizing the nature and characteristics of the activities for which it is used, the factors that promote its uses and its benefits.

1.6 Significance of the Study

As a study that seeks to investigate the impacts of GSM in Nigeria economy, it will suggest ways of maximizing benefits of the new technology as well as proffer solutions on managing its effects. It is particularly because it will educate the people on the best ways of managing negative effects of GSM services in Nigeria. The study will increase literature for mass – communication students and professionals wishing to carry out similar studies for further research on uses and benefits.

1.7 Scope of the Study

The area of coverage of the study focuses principally on the effects of Global System for Mobile Telecommunication (GSM). Nonetheless, Mobile Telecommunication Network Nigeria (MTN) was used on the case study; this led to the derivation and conservation on the staff and workers of the mobile firms. The research work will be a half done loaf of the users of the network operators was left out. The study conducted some investigation as regard the users and subscribers of the firm (MTN). Though, focusing much attention on the MTN staff investors, users and subscribers does not regard other network providers (such as GLO, Airtel ETISALAT, etc) irrelevant to this cause of study. They also helped on making this work useful and relevant material.

1.8 Operational Definition of Terms

GSM: It is a second generation telecommunication technology, otherwise known as Global System for Mobile Telecommunication.

Stakeholders: A person or company that is involved in a particularly organization, project system etc especially because they have invested money in it. In this context, those who have invested resources in provision of GSM services in Nigeria.

Users: According to Oxford Advanced learner’s Dictionary, a person or thing that uses something. In the context of the study however, users are the subscribers of the GSM services and products.

Teledensity: Number of serviceable lines to number of population of a given location.

Uses: In the context of this study, various forms of action which GSM could be put.

Mast: A tall metal tower with aerial that sends and receives signals for the telecommunication companies.

Communication: Passing of ideas, information and attitude from person to person.

Subscriber: in the context of this study, a person who pays to receive telecommunication service.

Internet: an international computer network connecting other networks and computer from one place to another.

Media: the main ways that large numbers of people receive information and entertainment i.e. radio, newspaper etc.

Technology: scientific knowledge used in practiced ways in industries.

Tariff: in the context of this study, a list of fixed prices that are changed by telecommunications companies for a particular service.