US embassy cable - 03LAGOS2565

UNCLAS SECTION 01 OF 02 LAGOS 002565 
 
SIPDIS 
 
STATE PASS FCC, ALSO EXIMBANK 
 
E.O. 12958: N/A 
TAGS: ECPS, ECON, SCUL, NI 
SUBJECT: A POTENTIAL POWERHOUSE AMONG NIGERIAN PRIVATE 
TELEPHONE OPERATORS 
 
1. (U) Summary. Odua Telecommunicaions, a subsidiary 
of Nigeria's Odua Investment Group, is one of a handful 
of private telephone operators.  The firm won several 
3.5 GHz licenses in June 2002 and hopes to break new 
ground in Nigeria's southwest by introducing improved 
fixed wireless services.  If it succeeds, it will 
connect over a million customers to Nigeria's 
communications network and clinch a position as the 
country's largest fixed wireless operator.  End 
summary. 
 
2. (U) Odua has the potential to dominate the southwest 
region's telecommunications industry.  The firm won the 
right to provide fixed wireless services in three of 
Nigeria's southwestern states, Ekiti, Ondo and Osun, in 
June 2002 and acquired licenses to provide services in 
two more states, Ogun and Oyo, when the original 
licensees failed to pay a performance bond.  Odua has 
completed almost half of a microwave radio transmission 
backbone spanning the five states, and it hopes to 
finish work in March 2004, construct a complete loop by 
the end of the year, and begin expanding into Kwara and 
Kogi states shortly thereafter. 
 
3. (U) Given the firm's ambitious expansion plans, it 
is not surprising that Odua's Chief Technical Officer, 
Olusegun Owolabi, is an optimistic fellow.  Right now, 
he says, the firm has an installed capacity of 100,000 
lines.  Owolabi expects capacity to increase to 760,000 
lines by the time the first half of the network is 
finished, and he expects it to increase to 1.1 million 
lines by the time the loop is completed. 
 
4.  (U) If Owolabi's expectations are met, Odua will 
become Nigeria's largest fixed wireless operator.  With 
1.1 million lines, Odua's capacity will exceed that of 
the country's national operator, Nigeria 
Telecommunications Limited (which has only half a 
million fixed lines) and come close to matching that of 
the country's leading global system for mobile 
communications (GSM) provider, MTN Nigeria 
Communications Limited, which has 1.5 million 
subscribers.  Owolabi hopes the introduction of fixed 
wireless services will reduce traffic on Nigeria's over- 
subscribed GSM networks and improve the overall quality 
of communications, particularly through the 
introduction of an alternative to Nigeria's national 
operator. 
 
5. (U) Like other telecommunications firms, Odua has 
had to build its own backbone.  Much of its equipment 
is supplied by Harris Communications Systems Nigeria 
Limited, the local subsidiary of U.S.-based Harris 
Corporation, one of the world's leading providers of 
telecommunications equipment and services.  Odua works 
closely with Harris and other U.S. firms, and Owolabi 
expects the relationship to continue.  He also expects 
to draw on the relationship to expand into rural 
telephony.  In fact, Owolabi believes Odua's reliance 
on U.S. suppliers will improve the firm's chances of 
securing a $20 million U.S. Export-Import Bank loan to 
finance the construction of rural switches across 
Nigeria's southwest. 
 
6. (U) Owolabi plans, too, to implement a $5.4 million 
e-learning project through the University of Ibadan, 
once one of West Africa's premier universities.  Odua 
has agreed to supply 4,000 lines to the school, which 
ultimately hopes to work with Columbia, Johns Hopkins 
and Stanford Universities to provide online and video- 
conferenced courses to students.  If the school 
succeeds, it will be among the first Nigerian 
universities to introduce such technology. 
 
7. (U) Comment. Odua is one of only seven or eight 
functioning private telephone operators in Nigeria. 
Twenty-six firms won 3.5 GHz licenses in June 2002, but 
only a handful have begun operating.  As such, Odua's 
competition is limited.  If its introduction of fixed 
wireless services is successful, it can easily 
establish itself as one of the Nigerian 
telecommunications industry's major players.  It stands 
a chance of vastly improving access to communications 
services across the southwest, as well as of 
significantly expanding rural telephony and students' 
access to advanced technology.  Given its reliance on 
U.S. suppliers, Odua may also open doors to U.S. 
businesses seeking to enter the Nigerian market.  Odua 
is a firm to be watched.  If it succeeds, other firms 
may follow its lead. End comment. 
 
HINSON-JONES