Challenges of Telecommunication Privatization in Nigeria

Telecommunication Privatization in Nigeria

The Challenges of Telecommunication Privatization in Nigeria

In the 1990s, many multinational nongovernment agencies (such as: the IMF) encouraged the privatization of state owned entities in favor of privatization. The basic idea was to encourage these organizations to become more efficient, attract large amounts of working capital and to be more responsive to the needs of stakeholders. In Nigeria, this was touted as a solution for effectively dealing with inefficiencies impacting the telecommunications sector to include: corruption and the inability to modernize. This is having a positive impact on the telecommunications firms and consumers. Evidence of this can be seen with that fact that more people have access to these services and new technology (Anderian 2005) (Etieyibo 2011) (Dahlan 2009)

However, more improvement is needed in addressing critical problems. Most notably: effective strategies for leveling the playing field among carriers, better approaches for regulating the sector and innovative solutions for managing growth / maintaining a balance between governmental / privatized entities. This is useful in showing the positive benefits from the privatization of Nigerian telecommunication companies. It is also illustrating immediate challenges that must be addressed and solutions for dealing with these issues. These factors are highlighting the strengths and weaknesses of privatization over long-term and the best strategies for enacting positive changes. Yet, despite these benefits criticisms continue to mount. This research study will focus on these issues and how they can be addressed over the long-term. (Obo 2012) (Dahlan 2009)

Literature Review

The literature review is illustrating new challenges from the privatization of the industry. At the same time, it is highlighting potential areas where more investigation needs to be conducted in order to understand the overall scope of the problems and create workable solutions. That can address these issues and ensure an efficient model is created in the process. It is at this point when new strategies can be introduced to enhance the current approach.

One of the biggest challenges impacting privatization inside the Nigerian telecommunication industry is the lack of support among the general population and there are no social practices which are encouraging its development. According to Etieyibo (2011), this making the sector dysfunctional by having no model to work off of that is taking into consideration the needs of different stakeholders. This leads to various abuses and it increases corruption on the corporate level. It is also illustrating the challenges of making adjustments from a state sponsored monopoly based upon the industry's performance. (Etieyibo 2011)

Moreover, Chittoo (2010) came to similar kinds of conclusions in reference to the long distance carriers and their ability to privatize. This is because they were traditionally a monopoly and the public supported these kinds of structures. The challenges they are facing is many institutions are creating shifts in how they deal with customers and if society is in favor of these transformations. To create a more effective entity requires that reforms must occur inside the public sector and socially through liberalization / privatization. This is supporting Etieyibo's definition by offering enhancing views of the problems and the best ways to deal with them. (Chittoo 2010)

This information is highlighting gaps in the research to include: few studies that are dealing with characteristics of privatizing the telecommunication industries in Nigeria and how no single model has been found to support the best practices. At the same time, it is illustrating the different propositions of the study. Most notably: the problems Nigerian telecommunications companies are facing in their business performance. These elements help to answer the various research questions of: the challenges, effectiveness and the adequacy of this model. Furthermore, these ideas are supporting the main objectives to include: examining the problems faced by Nigerian corporations.

However, in spite of the many different criticisms, privatization is having a positive impact on the telecommunication industry. According to Okafor (2007), this kind of approach has helped to make telecommunications carriers more competitive. At the same time, it has increased the total amounts of working capital and ensured that they can effectively respond to the needs of stakeholders in the process. This is showing a competing view or definition of what is occurring inside the sector. (Okafor 2007)

In addition, Anderian (2005) found that privatization is having a positive impact on the telecommunications firms and consumers. This is offering more people with access to these services and new technology. To enhance these changes, effective policies must be incorporated into the existing structure. These include: greater transparency in licensing, openness to the management / operating procedures, better access of services to rural areas, maintaining / building upon the current infrastructure, a reduction in duty rates for the import of new equipment / technology and creating a level playing field for all operators. These sources are highlighting competing views by illustrating how this model has been successful and what strategies helped it create lasting changes. At the same time, it is looking at specific categories to enhance everyone's understanding as to the best approaches for improving the current structure. This is supporting the views of Okafor by highlighting how the model has been successful. Moreover, it is taking a different approach by illustrating ways to enhance these practices and make the sector more responsive to the needs of stakeholders. (Anderian 2005)