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Cablegate: A Potential Powerhouse Among Nigerian Private

This record is a partial extract of the original cable. The full text of the original cable is not available.

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

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