El-Rufai: How Vodafone recorded its ‘biggest’ investment mistake in Nigeria

Governor Nasir El-Rufai of Kaduna State has disclosed how telecommunication company, Vodafone failed to invest in Nigeria at a time despite having the backing of former President Olusegun Obasanjo.

El-Rufai recounted that prior to the arrival of MTN and ECONET, Vodafone was approached by the Nigerian government but the telecommunication company never saw the potentials in the Nigerian market.

According to the Kaduna State Governor, as reported by Guardian, the telecoms journey started with the late dictator, General Sani Abacha, but he couldn’t achieve much because of his death in June 1998.

El-Rufai said“Though Abacha issued one GSM licence, which we waited for to switch on, but the firm never did, till Abacha died.

 “Then came General Abdulsalam Abubakar. There was one Ibrahim Aliyu, who was the chairman of Intercellular, and later former Permanent Secretary, Ministry of Communications, who later became most senior adviser to Abubakar, so he was able to prevail on the Head of State, and some telecommunications sector’s move were facilitated. But still, nothing concrete was achieved until President Olusegun Obasanjo came on board.”

El-Rufai stated that when Obasanjo was in power, some telecoms experts, including Titi Omo-Ettu, Shola Taylor, and others in Diaspora, submitted a memorandum to the then President, appealing to him to license GSM operators.

While the appeal was on, El-Rufai was appointed the Director-General, Bureau of Public Enterprises (BPE), and was charged to privatise everything including NITEL.

The governor explained that in 2000, while President Obasanjo was in a hurry to issue GSM licences, “he called me and the then Minister of Communications, and said: ‘I want to issue one GSM licence for $1 to any major operator, who do you recommend?’ 

“I said to President Obasanjo,Vodafone! Vodafone then was the largest mobile operator in the world. He picked the phone, called the then Prime Minister of Britain, Tony Blair, and he said that some Nigerian delegation are coming to Britain to make presentation on the opportunities in Nigeria’s telecoms market and that Vodafone should be made to receive us. We went and met with the officials of Vodafone and we made our presentation.”

A few weeks after the presentation, El-Rufai said they were able to get a response from Vodafone.

The telco indicated that they wouldn’t invest in the country due to the fact that the market was too minute for them.

He said, “we got a reply letter from Vodafone. They said they have looked at our presentation, their analysts have looked at it and the forecast is that the Nigeria GSM market is just about five million subscribers in 36 states. That is the size of the market will just be five million subscribers. That only five million people, in general, can afford to pay for GSM service in three years. According to them, the market was so small; Nigeria you are so poor to afford a mobile phone.”

El-Rufai said the story changed when MTN and ECONET came on board, adding that within the first year of operations, they had over five million subscribers.

“This was Vodafone’s biggest investment mistake, because if they had come into Nigeria at that time, God’s know how much bigger they would have been today,” he stated.

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