AN INVESTIGATION INTO THE ROLE OF GSM OPERATION IN DEVELOPING DIRECT MARKET IN NIGERIA (A CASE STUDY OF MTN NIGERIA)

ABSTRACT

GSM communication is vital toll in the Nigeria economy as most sector depends on it for the effective communication and development of direct marketing in the nation GSM have a direct relationship with direct marketing as most people use their phone for creating awareness about their product the study was conducted to investigate the role of GSM in developing country. The study also expatiate more on the important of GSM. The study also look at contribution of GSM to overall economy development of the nation. The aim of marketing tool and development of direct marketing in the course of the study both primary and secondary data was used in gathering data, but secondary data was used most GSM is faced with challenges and the most pressing one is high tariff charges. Recommendation was made based on the findings his tariff charge should be reduced to enable the consumer enjoy uninterrupted services. Basic amenities like good road network security should be provided to enhance the performance of GSM operators in Nigeria

TABLE OF CONTENT

Title page

Certification                                                             ii

Dedication                                                               iii

Acknowledgment                                                     iv

Abstract                                                                   vi

Table of content                                                       vii

CHAPTER ONE

1.0   Introduction                                                    1

1.1   Background of the study                                  1

1.2   Statement of problem of the study                   10

1.3   Aims and Objectives to the study                    11

1.4   Significance of the study                                  11

1.5   Scope of the study                                           12

1.6   limitation and Constraint of the study            13

CHAPTER TWO

2.0   Literature Review                                             15

2.1   Concept of Direct market                                 15

2.2   Effect of GSM on Direct Marketing                   16

2.3   Important of Direct Marketing in Nigeria          17

2.4   Challenges Facing GSM Market in Nigeria               19

2.5   Causes of High Charges by GSM operators      20

2.6   Solution to Problem of GSM                            21

2.7   Problem of the Markets                                    22

2.8   Prospect of the Market                                     25

2.9   Formation of hypothesis                                  26

CHATER THREE

3.0   Research Methodology                                     28

3.1   Research Design                                              28

3.2   Sources of Data Collection                               29

3.3   Population of the Study                                   29

3.4   Sampling and Samples of size                         30

3.5   Method of data Collection                                        30

3.6   Instrumentation of Direct Market                    31

3.7   Validity and Reliability of Instrument              31

CHAPTER FOUR

4.0   DATA PRESENTATION AND ANALYSIS            33

4.1   Brief history of the Case study                         33

4.2   Presentation of Data                                        35

4.3   Discussion of Finding                                      42

CHAPTER FIVE

5.0   SUMMARY CONCLUSION AND                                45

 RECOMMENDATION

5.1   Summary of Findings                                      45

5.2   Conclusion                                                      46

5.3   Recommendations                                           47

     References                                                          49

CHAPTER ONE

1.0     INTRODUCTION OF THE STUDY

1.1           BACKGROUND OF THE STUDY

       Nigeria is a commercial manufacturing and transportation country. Individual people business and government use many difference type of telecommunication in the country. Telecommunication arrived in Nigeria over 100years ago. At independence in 1960 the country has about 18,124 phone lines, from independence, various government made several attempt to increase the number of telephone lines to Nigerians. However these attempts failed woefully due to certain reason chiefly amongst. These are monopoly of this sector by the country public utility Nigerian telecommunication plc. NITEL and its corrupt management. By the beginning of 1999, there were roughly 5000,000 lines available for a population of around 120 million Nigerians.

       Whatever complimentary things justified or not that many may have to say about the olusegun Obasanjo administration since its in caption in may 1999 one thing has become in controvertible this government successfully brought us a deregulated communication sector by auctioning is global system for mobile (GSM) license in January 2001 and 285 million each and further resented a license 3 for NITEL administration succeeded where other before it had fail in the end these 3 lines the MTN is at the production MTN communication wireless were awarded fully GSM license.

       An underline vision for the introduction to GSM by the Nigeria government was to expand the Nigerian tendency and directly make telephone communication cheap and accessible to common man MTN telecommunication opens its door to its customer to days later that the ECONET wireless has open it own MTN has a similar package Trust Nigeria eager subscribe bombarded both network operators to great available line. The third network NITEL was no where to be found mainly due to its unpresented and internal disequilibrium.

        These two companies according to their image makes have within 2 month add more telephones lines. Over 1 million as at the last count into the Nigeria environment more was ever the case in 40 years of independence.

        One year after GSM has come to stay in Nigeria, infact many have called for the introduction of the GSM telephone a revolution in way, but one can also refer to GSM as a quatrum leap for Nigerians infrastructure capacity building which is a major ingredient for the much debated jump starting of the strangulated national economy. According to a world bank comparative study on information and communication network between 1994-1997 in some African countries, Nigeria was discover to have 4 phone line per 100 people as opposed to 5 in Cameroon 9 in Kenya, 11 in Senegal, and 15 in Zimbabwe. Another study contained in the world development report 1999/2000 situates Nigeria as having merely 400 telephone main lines and 0.00 mobile telephone respectively as at 1997, thus Nigeria embraced the GSM at its introduction. Expectation has always been high for the introduction of a mass based telephony which is both convenient and cheap to acquire.

      The nation treasury also benefited through license fee payment and import duties through discounted and will continue to benefit through payroll and other taxes from these companies many direct and indirect dealers street recharge/fill card hawkers, downright -out selling second-hand handset and accessories, we can also say that the Nigerians lines of the people of kwara state especially have been transform and the socio-economic settings has been re-energized.

       We should not neglect the fact that GSM has actually created the habit of time management in Nigerians and Kwara state particularly. This can be notices right from the curtailment of expensive salutation while contribution to the reduction of motor accident on major highways due to the elimination of long journeys for pleasure and business. It is now convenient to place a call to business associates or relative rather than waste valuable time embarking on sometimes needles journey top among is the gait to the Nigeria business environment has assured with improve cost and information technology awareness through wap services (wireless application protocol) e-commerce through mobile payment system called m-payment among others.

     Further investor feel free and more secure investing in the economy now as the GSM offered a corner stone in Nigeria race towards attainment of adequate infrastructure. According to most user the greatest worry and drawback that GSM bears is cost of maintenance most have argue that call charges are too exorbitant at around 60 naira per minute at the interception but now about 30 naira where as our per capital income in Nigeria is low. The telecom companies on the other hands have insisted that they are still at lost and would probably not break ever than until 2005 they have both rules out direct tariff.

     The managing director of MTN Mr. Andrian would speaks sometimes in August 2005 that the economics of operating cost require by the business of this states do not make a downward side. The naira is witness in the recent times this is not withstanding he stated the MNT tariff remains comparable to continental European network that are now at 6 to 7 years maturity, charges on average 15% higher than we do.

     ECONET and MTN have both claimed that their supposed high tariff result from the enormous start up cost they had to endure to virtual nil telephony infrastructure when they paid harrowed in Nigeria and also an inefficient and disorganized power sector to top it all up, these companies add that the 285US million dollar they paid for the licenses were too high indeed there is some truth in this claims. However, it will be difficult for any discerning mind to accept that the 285US million dollar, ECONET and one have to consider the size of Nigerians market if well served harnessed, would generate enormous revenue for these telephone companies in the medium to long term.

     To ask a simple question in how many countries are they operating withing a year and sold over a million line, Nigeria communication commission NCC has been called upon by many Nigeria to put a check on pricing structure of these GSM companies with NITEL lately coming into the fame with N22per minute talk time at peak period, it is perceived that the competition we be more balance, it is able to push adequate line with reliable service into the market in the process, the tariff of both ECONET and MTN would have become infer-able.

     Another GSM menace probably in the short time, is the short term, is the nonchalant attitude of motorist in handing the set while driving, this necessitate the Kwara State Government to carve out a law banning the use of GSM while driving. GSM may have increase the volume of armed robbery and assassination in the country. Even bank have disallowed the use of GSM withing the banking hall. This though could be described as the failure of the police than anything else if you are a stranger or visitor at Lagos the false rule of the game is not to flaunt your GSM wardals who serves as the conduct pipes to strum GSM black the low and show data carrying capacity of GSM telephones means that business government gentles education institution, individual e.t.c are still not fully reaping the benefit of GSM mobile telecommunication. The internet and fax capabilities of GSM mobile phone still have a lot to be desire in these areas and make the development efficient.

     What lies in the future? The operation have promised wider courage better, connecting contribution to the reduction of motor accident on major highways due to the elimination of long journeys for pleasure and business association or relatives rather than waste valuable time embarking on sometimes needless journey.

1.2    STATEMENT OF PROBLEMS OF THE STUDY

     They study will be conducted to investigate the role of GSM developing country. The study will expatiate more on the importance of GSM. Also the study will examine the position of Kwara state in the country tendency these have been identified as lack of financial muscles to deliver efficient and effective services.

1.3    AIMS AND OBJECTIVE OF THE STUDY

     The importance and usefulness of GSM in Nigeria has become idely accepted in our society the result is the growing and increasing of GSM has help in making use of GSM to get their product into the market and have better share in the market. This has proved to determines the relationship that exist between mobile telecommunication and social economics development in Nigeria. The study identify the problems confronting mobile telecommunication in Nigeria.

1.4    SIGNIFICANCE OF THE STUDY

     The outfit of this research study could provide a benchmark for economy circumstance as well as the problem attributed to social economic development mobile telecommunication operators so as to increase their level of efficiency and effectiveness.

     The result will be usefully to the marketer as sources of communicating effectively than transportation.

     Also the result will be useful to the government as it will provide information on the require amenities and level of availability.

Above all this work will serve as a source of information to any student who may in the nearest future wish to undertake a similar research or future research.

1.5    SCOPE OF THE STUDY

     The study will principally cover all aspect of the role of GSM in developing direct market in Nigeria emphasis would be on the impact growth and contribution of GSM in developing forward the social economics and political advisement of Nigeria.

     The research work will be limited MTN Nigeria limited in Ilorin Kwara State, where all the respondent shall be drawn from with the hope that result ill be equally applicable related users.

1.6    LIMITATION AND CONTRAINT TO THE STUDY

     In according a research of this nature researchers are bound to have limitation that include the extent to which it could go. Therefore the revenue of the limitation to the writer include financial constraint, availability of time and attitude of the respondent to the information requirement, financial constraints is one of the limitation that the writer faced. Before some data are collected to write his project a lot of money was required to travel down to the source of the information student there was not enough money to travel up and down. There was time constraint such that enough time of the research to go far as actually wanted was not available. The attitude of some  of the respondents in the organization of the case study tends to be back and many respondents do feel such as exercise is a waste of time and to not see reasons why their time should be waste in giving information.

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