Nigeria’s telecommunication has been very vibrant since its deregulation in 2001 by the Obasanjo administration. The advantages of the deregulation cannot be oversized. Besides, it was arguably the most successful deregulation carried out by a Nigerian administration.
Flip the coin and look at the oil or power sector, you will be genuinely worried about the government holding on to these sectors instead of selling it off. Interestingly, the telecommunication sector is performing, partly, due to deregulation. In line with this, innovation village shares five reasons to adopt the deregulation of the telecom sector as a model for liberalizing the oil industry.
Entry of capable players
The deregulation of the telecommunication industry saw the entry of three key players namely MTN, Glo, and Airtel from the onset while Etisalat joined later. Prior to this, the Nigeria Telecommunication Limited (NITEL) was the alpha and omega. Immediately after the government liberalization, NITEL went moribund and telecom services significantly improved. The role of the government now is just to regulate, roll out policies and take punitive actions against any erring companies like the reviewed $5.2 billion fine slammed on MTN. The same thing will happen in the oil sector.
Competition will drive down prices
So far, the competition among the telcos has been very exciting. A good example is the battle to provide cheap data. After MTN reintroduced MTN Pulse where you can buy 1GB for N500, Glo responded by shattering the data prices. For the same N1,000, you can buy 2GB on the Glo network. For the oil sector, the price of a litre is now 145. Just imagine how the price will crash if the government fully and comprehensively deregulate.
No monopoly
Obviously, there will be no monopoly after deregulation. After deregulation, all the organizations will have a level playing ground to legally run their businesses. They are free to introduce innovative technology and creative products for their customers. This rarely happens if the government is the sole provider of a particular service like the all-powerful-Nigeria National Petroleum Corporation (NNPC).
Creation of more jobs
Young people selling and printing prepaid card, customer service outlets opened at strategic locations around Nigeria, sponsorship of different talent hunt competitions like the MTN project fame, and other entrepreneurial programs that have uplifted thousands of Nigerians. Many young Nigerians now boast of owning small scale businesses while others have become celebrities. The NNPC only employ a handful of Nigerians. Same with the oil companies. If the sector is deregulated, everyone including Niger Deltans will not feel marginalized especially when it comes to distribution of wealth.
Companies will be socially responsible
Many Nigerians believe oil is a curse to the country. The Niger Delta is polluted. The people are disoriented and have resulted in taking arms against the government while the oil companies do not feel responsible to anyone. With all these happening, the price of oil has fallen below $40. These have affected the government which should not be the case. But if the government allow the forces of demand and supply to take its course, only the oil companies will be distressed and these companies will be socially responsible to the people and the government. It is unfortunate that this may not be happening because the government is dictating the politics of the sector.
