Investigations by Highway Africa News Agency (HANA) have revealed that while operators have completed initial tests on the services, challenges relating to network capacity, readiness of users and limited 3G handsets is delaying the rollout of the services.
3G is third-generation technology in the context of mobile phone standards. The services associated with 3G include wide-area wireless voice telephony and broadband wireless data, all in a mobile environment. Video telephone, fast Internet access are some of the dominant applications for 3G.
The Nigerian Communications Commission had in March, 2007 awarded 3G licences to the nation's three major GSM companies - Celtel, MTN, and Glo Mobile, and a relatively unknown operator, Alheri Engineering Co. Ltd, at a cost of $150 million each.
However, industry analysts believe that with this massive initial investment in licensing fees, operators have gone back to the drawing board to see how to redesign their business plans to ensure a return of investment within a reasonable time frame.
MTN, Glo Mobile and Celtel had claimed to have completed their trials in December 2006, but with almost half of the year already gone, these firms are yet to rollout services.
Chief Executive Officer of MTN Nigeria, Mr. Faroukh Ahmad, said while GSM firms had already paid the heavy investment, they would have preferred a situation where the licence fee payment was invested in their networks.
According to Ahmad, the $150 million fee is a very high investment to make for a licence. He added however, this was not the only challenge, noting that the limited number of 3G handsets in circulation was another major problem.
According to Ahmad, only 2% of mobile phones in use are 3G compliant, adding that with this situation, the market to be immediately addressed would be too small once operators rolled out services.
High cost of 3G handsets is another reason for the delay in service rollout and Ahmad added that the firm would not want to overburden users with the task of having to acquire handsets at high costs for now.
The Vice-President of Networks and Sales Support for Ericsson, Peter van der Westhuizen, explained that Ericsson recognises this problem and that through SonyEricsson, its joint venture partnership with Sony, is ready to address this problem. According to Westhuizenn, new sets would be introduced into the market in the future to counter the issue. He said that globally high cost of handsets was a major reason why 3G services were slow to take off, adding that this was why the firm was focused in addressing the problem.
He however noted that probably the biggest problem causing delays is the high cost of bandwidth. These costs need to come down considerably if services are to be offered at an affordable price, he said.
Once services commence, Nigeria would be the third to introduce 3G services in Africa. Early 2007, Vodacom Tanzania switched on its 3G HSDPA in Dar Es Salaam, making Tanzania only the second country in Africa with such technology - the first being South Africa.
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