With more than 200 million active lines, public telephone kiosks are almost non-existent, writes Sonny Aragba- Akpore
With the entry price pegged at N20,000 for the Subscribers Identification Module (SIM) card at the advent of the Global System of Mobile (GSM) communications in 2001, not many people could afford it then despite the excitement in the air.
More worrisome was the prohibitive cost of the mobile handset. The prospects of acquiring one were dimmed.
But Nigerians must talk. Not long after, a number of people opened shops for mobile payphone services.
Virtually every corner of the country had a pay phone shop where people could get into, and make phone calls for a fee. Soon, one of the dominant operators began to distribute umbrellas to identified vendors as incentives to boost the spread of their reach. These umbrellas became ubiquitous trademarks.
These centres were able to meet a need of the ordinary folks in the land. For those who could afford the cost of the SIM cards and the handset, airtime was also not cheap.
Pioneers, MTN Nigeria, Econet Wireless Nigeria, and Nigerian Mobile Telecommunications Limited (Mtel) provided services in parts of the country but essentially in the urban centres.
Per second billing was a far cry until GloMobile came in 2003, with what was likened to a price revolution with its introduction. The pioneers told us it was impossible.
And so, the jostle for customer base began.
Despite all the seeming innovations of the operators, the pay phone service providers had a field day.
They were a stop-gap even for those who could afford both SIM card and handset at some point as the cost of calls at the phone Centres were flexible.
And because setting up the kiosks needed no formal permit, opening one became all comers’ affairs.
But as costs of acquisitions of the SIM card nose-dived backed by a very significant drop in the cost of handsets, many more people could now afford connectivity and the pay phone operators began to sing Nunc dimittis for a once-thriving business.
Mobile communications developments were in their infancy in Nigeria then, unlike South Africa which already had two very strong operators, Vodacom and MTN. So, the Average Revenue Per User (ARPU) in Nigeria was still very high as there rose an increasing demand for additional mobile indicators by the enthusiastic subscribers despite the bottlenecks associated with costs of acquisition.
The fixed-line acquisition was a far cry as only 500,000 lines were available for a population of nearly 131million in 2003. Fixed lines were exclusively provided by state-owned Nigerian Telecommunications Limited (NITEL) and its mobile arm, Mtel which had a little over 118,000 analog lines. And by the advent of mobile services, fixed lines took the back seat.
In almost all the countries then including Nigeria, there was now more mobile than fixed-line telephone subscribers. The mobile market was on the rise, but even the vexatious termination rates called interconnection rates became a major headache for the regulator to resolve.
Mobile termination rates became a subject of intense regulatory debate in many countries which required a number of indicators to address properly.
The use of mobile phones for non-voice applications was also growing. High-speed 2.5 and 3G technologies offered considerable scope for providing access to the Internet from mobile networks. A new set of indicators was also emerging to track this.
Multimedia and short message services were particularly being considered across networks by regulators.
ARPU figures released by Nigeria’s leading mobile operator MTN showed the country to be living up to its billing as a dynamic market ripe for outside investment. MTN Nigeria said its GSM network recorded an ARPU figure of $57 in the first quarter of 2003, more than double the $26 registered by MTN’s subsidiary in South Africa, its home market. MTN Nigeria recorded pre-tax profits of $89.7 million on revenues of $568 million for the 12 months to March 31, 2003. Had it not been for the depreciation of the naira at that period, the company claimed net earnings would have been closer to $140 million.
MTN Nigeria is part of the MTN Group, Africa’s leading mobile telephony company which in addition to South Africa, has operations in Cameroon, Rwanda, Swaziland, and Uganda. It paid $285 million for one of four GSM licenses in Nigeria in January 2001 and launched services seven months later.
By the end of 2002, it claimed 908,000 subscribers, equal to 51% of the market which it shared with Econet (775,000 subscribers) and state-owned fixed-line operator NITEL (118,000).
MTN pioneered the umbrella sharing business model before distributing kiosks as a scheme to empower retailers with a smart stall, to enable them to provide MTN’s bouquet of products and services more efficiently.
The “Kiosk-as-a-Service” scheme also enabled customers to have swift access to services like SIM registration, MoMo (mobile money), 4G migrations, airtime purchase, and much more.
The third-largest mobile operator, Econet (Airtel) was the first to launch Nigeria’s first GSM payphone system in the city of Onitsha, with a promise that the service will aid the government’s rural telephony development program.
Payphone kiosks have been popular in the United Kingdom, United States, Canada, India, among others but unlike Nigeria, telecommunications operators were predominantly involved in their operations.
In the UK, payphones have been deregulated. The great majority of them are still operated by British Telecom (BT) but other providers exist, mostly in urban areas like Hull, Manchester, London, Cardiff and Glasgow, at the turn of the 21st century.
In recent years, deregulation in the United States has allowed payphone service provided by a variety of companies. Such telephones are called “customer-owned coin-operated telephones” (COCOT), and are mostly kept in as good condition as compared with a payphone owned and operated by the local telephone company.
Most payphones in Canada are owned and operated by large telecom providers such as Bell, Telus, and SaskTel. In the last 20 years, customer-owned coin-operated telephones (COCOT) have also appeared in the market, but their numbers are smaller due to the emergence of mobile phones.
As of April 2022, mobile telephony had grown so much that just anybody could acquire services at minimal costs.
SIM cards are now sold at very insignificant prices while handset costs have also dropped to manageable prices.
Though the networks are still grappling with a number of challenges, and are not yet robust, services are being taken to many unserved and underserved areas of the country.
With 199 million active lines as of the end of the first quarter of 2022 and a teledensity of 103.7, the business of pay phones in kiosks and booths is on the downward trend. Now, anybody could buy a SIM card and connect to any network of choice.
Aragba-Akpore is a member of THISDAY Editorial Board