Nitel begins shifting fixed users to prepaid

Nigerian Telecommunications Ltd (Nitel), the incumbent telco in Nigeria, is aiming to convert its residential subscriber base to prepaid billing as part of ongoing efforts to clamp down on fraud.

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By  Richard Agnew Published  November 2, 2003

Nigerian Telecommunications Ltd (Nitel), the incumbent telco in Nigeria, is aiming to convert its residential subscriber base to prepaid billing as part of ongoing efforts to clamp down on fraud.

In October, the operator recruited UK-based telecoms solutions vendor, Redwood Technologies, to provide it with what is thought will be the largest prepaid system in Africa.

Set to go live before the end of 2003, the prepaid solution will be offered from nodes in Lagos, Abuja, Kano, Kaduna, Bauchi, Ibadan, Enugu, Benin and Port Harcourt, but eventually extended to 37 sites across the country.

Running on Redwood's DNX-1100 platform, the RedRouter system employs SS7 and compressed voice over IP (VoIP) for more efficient use of network infrastructure.

Subscribers will be converted to 'prepaid dial tone', meaning that they will only be able to make calls if their account is in credit. The move, Nitel hopes, will allow it to combat bad debt and collection issues.

"We looked at two benefits for Nitel - we're hoping bad debt will be removed in one fell swoop and the operational costs of maintaining the [billing] system will be reduced," says Sean Taylor, director, Redwood.

The move also forms part of a wider effort by Nitel to modernise its network in an attempt to cut waiting lists, combat competition from mobile operators and raise its value for potential privatisation.

Currently, the operator is only believed to have 500,000 lines installed to serve a country with a population officially placed at 120 million but estimated at up to 200 million. Up to 200,000 of these lines are also thought to be out of service.

"The penetration of lines is pretty low... and there's a very high percentage that just don't work," says Taylor.

As such, the project is also geared towards generating additional revenues that would enable Nitel to make further investments in infrastructure and services.

A prepaid calling card service is planned for launch with 7 million cards across the same platform, in an attempt to extend usability to those without residential accounts.

Value added services such as voice mail, fax mail, messaging, prepaid audio conferencing, and call-in services for radio and TV shows are planned for 2004.

Redwood worked with local partner, Imperial Telecommunications, on the project, valued at N585 million (US $4.5million.)

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