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Volume 20, No. 3, October 2010

Table of Contents


The Impact of Global System for Mobile Communication (GSM) Revolution on Low Income Earners in Nigeria

Efe-Omojevwe, Zelda. A and Adesope, Olufemi M.

Department of Agricultural Economics and Extension University of Port Harcourt, Rivers State, Nigeria

Corresponding author’s email: omadesope@yahoo.co.uk





The revolution of information and communication technology (ICT) has brought assurance to many people especially low income earners that they can feed themselves or families, provide shelter for selves and have a secured future. The Global Service for Mobile communication (GSM) serves as a tool for economic, political and social interactions among people of all profession, classes and status. The GSM is said to have improved the capacity of small-scale entrepreneurs who rely on it as an important means of communication needed to be able to do their jobs. The GSM usage has also helped to bridge the communication gap between urban and rural dwellers as was witnessed in the Niger Delta area of Nigeria.


Ndukwe (2009) noted that about 80% of Nigeria’s population are located in the rural areas and to ensure the people’s security, there is the important need for access to information and knowledge. Official statistics shows that Nigeria has a telephone subscriber base of about 70million (NCC, 2010), of which about 62million are GSM subscribers. Before now, access to telephone was the exclusive preserve of the rich and privileged few in the country until 2001 when the GSM was introduced. The first set of licensed mobile telephone operators were ECONET wireless, now Zain; MTN and MTEL (a subsidiary of Nigerian Telecommunications Limited, NITEL). In 2002, a fourth Digital Mobile Licence (DML) was issued to Globacom Mobile (Glo).


In 2007, licences were granted to four indigenous firms in Nigeria to operate 3rd generation (3G) mobile telephony technology. The 3G spectrum which is a kind of broadband technology gives a wide area of wireless voice telephony, video calls, wireless data transfer, simultaneous use of speech and data services. It also increases the rate of information transfer which is known as spectral efficiency.


Currently, NCC (Nigeria Communications Commission) has granted more licences such as the Second National Operator (SNO) issued to Globacom, Fixed Wireless Access (FWA), Unified Access Service Licences (USAL), Licences granted to 24 companies on regional basis and 3G Licences granted to four companies. According to the New Telecoms Frontier Reports of 2010, about 5million jobs have been created directly and indirectly in the telecom industry and these include people that are directly employed by GSM operators, dealers, vendors of GSM accessories, recharge card sellers and printers as well as the ubiquitous ‘umbrella stand’ operators. Indirect employment that has been created include jobs created through contracts to construction firms, research companies, advertising agencies and media consultants as well as suppliers of diesel and generator maintainers.


In order to encourage the emergence of internet services, the commission has licensed several internet service providers (ISPs) and has also initiated a class of licensing regime to simplify authorisation processes for cybercafés and telecoms centres. With the establishment of a fully operational internet Exchange Point for Nigeria, it is believed that the rate of network growth would cause Nigeria to overtake South Africa to become the largest telecom market in Africa (The News, 2009).


For the purpose of this paper we shall dwell on the ubiquitous ‘umbrella stand’ phone service providers. The rural dwellers have been involved in small businesses such as the telephone or GSM call centres. To many people, the introduction of the GSM into the country has transformed them from unemployed or employee status to employers and successful business men and women.


A teeming population of ‘would have been’ jobless people have engaged themselves in the business of phone calls. The umbrella stand call centre is a prominent feature in every street of the rural areas and even in the urban areas. These operators are never short of customers as people are always patronising them for one reason or the other, ranging from recharge card purchase to making of calls, some persons even collect the phone numbers of some operators so that they can receive calls through such centres. This business is very easy to start as all that is needed is a space where the umbrella (parasol), table, chairs and a mobile phone SIM (Subscribers Identification Module) ) can be set. The major impacts of the GSM revolution are as summarised below.


§ Livelihood Sustainability

The initial bulk purchase of recharge cards will depend on the operator’s starting capital, and this can be increased gradually as the operator ploughs back some of his profit into the business. These operators use special SIM cards meant for business, so that they attract a lower call charges than the non business normal SIM card. The difference between the call rates of the two SIMs is what amounts to profit for the call operator. With as low as Nigerian Naira 12,000 (about 79USD), composed of a phone of naira 5,000, a pack of recharge cards costing about naira 4,000, two plastic stools costing about naira 2,000 and an umbrella of about naira 1, 000, one could start up the business. These ways has been used by many jobless people to feed themselves, save to buy cloths, domestic items and also save to provide themselves with shelter.


§ Sponsorship of Other Business

Some times, the rural dweller engages in the GSM business as a last resort means of raising money to finance his or her major business of interest. The low income earner does not have an easy access to credit facilities needed to finance the business of their choice and so would readily and willingly resort to the GSM business as a way of raising and saving fund to later start the business of their interest.


§ Saving For School

It was found that many of the youths involved in the GSM business where people who were academically inclined but could not continue their education as a result of inability to pay their fees and meet up with other educational expenses such as purchasing books, transportation and feeding. This has resulted in their withdrawal from school and engaging in this business to raise money with the hope of going back to school in the future.




We have briefly highlighted the major areas through which the GSM revolution has helped the low income earners in Nigeria. It was found that many persons who suddenly found themselves in the labour market due to retrenchment from their place of work have used this business to sustain themselves and also, people with other established jobs partake in this business to augments their income.




§    NCC (Nigeria Communications Commission) 2010. Published article of the Tell Magazine, January 25, 2010, pp: 29-37


§    New Telecoms Frontier (2010). Reports. Article of the Tell Magazine, January 25,  2010, pp 29-37


§    Ndukwe, E. (2009). Citizen Security. Published in the Tell Magazine. September 28,  2009. pp: 60-61


§    The News (2009). Editorial Report. Published November 02, 2009, pp 58