Exploring Productivity by Evaluating ISP Efficiency in Nigeria's Telecommunications Sector

Exploring Productivity by Evaluating ISP Efficiency in Nigeria's Telecommunications Sector

Adeyemi Abel Ajibesin, Yakub Akinmoyede, Senthil Kumar Thangavel, Ridwan Salahudeen
Copyright: © 2024 |Pages: 22
DOI: 10.4018/979-8-3693-0255-2.ch012
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Abstract

The digital divide in Africa, particularly Nigeria, has raised concerns about the efficiency of internet service providers (ISPs) in providing quality services to their subscribers. This research focuses on evaluating the efficiencies of the major ISPs in Nigeria, including MTN, Glo, Airtel, and 9mobile, using data envelopment analysis (DEA). The study examines vital efficiency metrics such as internet speed, cost of data, years of existence, and subscriber base over five years from 2015 to 2019. The results reveal varying levels of efficiency among ISPs, with MTN consistently ranking as the most efficient. These findings have implications for improving the quality of internet services and promoting healthy competition within the Nigerian telecommunications industry. The study also highlights the importance of considering multiple parameters in assessing ISP efficiency, shedding light on areas for future research and regulatory interventions by the Nigeria Communications Commission.
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Introduction

The use of the internet to gain competitive advantage has become a key infrastructure issue amongst organizations in the fast-globalizing environment. However, a good and secure network is the essential component on which any organization is relied as there would possibly be an attack that can be seen in most of the communications. Bharadwaj et.al (2021) stated that detection of these attacks like Denial of Service (DoS) is prominent in the field of communication. Authentication of the right user is another prominent aspect in the field of communication. In recent times, cloud-based technologies also have gained popularity in the process of authentication. To prevent intruders, an additional layer of security is transformed by the model that is developed by Senthil Kumar Thangavel et.al (2014) for user authentication. The overarching means of business transactions now depend largely on connectivity, knowledge, and information (Pavic, Koh, Simpson, & Padmore, 2007). It is noted by Pradhan, Arvin, and Norman (2015) that technological infrastructures such as the internet, mobile phones, broadband, and telephone networks have made it possible for individuals, groups, businesses, and government to share information that beats the initial limitation of speed, scale, and scope of exchange. Transactions over the internet have helped in exposing individuals and organizations to communicate faster and meet up with global competitiveness. Internet services utilization and commercialization has become more widespread throughout the world, the use and adoption of novel internet-enabled services can generate new business opportunities and various benefits. More so, there is an increasing consciousness of the necessity to take in profit through investment in information technological tools.

Currently, the internet revolutions have swept across many organizations around the globe, particularly, Nigeria has an internet penetration of about 113.3 billion subscribers in 2019 and projected to reach 187.8 by 2023 (Statista, 2019). To this end, it is germane to posit that the availability of functional and efficient internet service is a sine-qua-non for any country that wishes to compete in today’s global economy. Umezuruike, Oludele, Kuyoro, and Izang (2015) revealed that the International Telecommunication Union (ITU) predicted that in 2014, there will be almost 3 billion Internet users, two-thirds of these subscribers would come from the developing world, and the number of mobile-broadband subscriptions will reach 2.3 billion globally by end of 2014. Fifty-five percent of these subscriptions are expected to be in the developing world, this confirms that internet technologies would continue to be the key drivers of the information society. The liberalization of the Telecommunication industry by the Nigerian Government in 2001 has led to an exponential growth in the number of subscribers to mobile phone services and data services provided by internet service providers (Ononiwu, Akinwole, Agubor, & Onojo, 2016). This liberalization brought several operators into the industry thus leading to fierce competition and thus giving the users group the prerogative of making choices as to internet service providers to patronize. Therefore, the quality of service and efficiency of these service providers become important to both the regulatory body and the public.

Key Terms in this Chapter

MTN: A major telecommunications company in Nigeria and several other African countries, known for providing a range of services including internet connectivity.

Digital Divide: The gap between demographics and regions that have access to modern information and communications technology, and those that don't or have restricted access.

Nigeria Communications Commission (NCC): The regulatory authority for the Nigerian telecommunications industry, responsible for overseeing ISPs and ensuring fair competition and quality service.

Subscriber Base: The number of active subscribers or users that an ISP has, often used as a metric to gauge the company's market reach and scale of operations.

Internet Service Providers (ISPs): Companies that provide services for accessing, using, or participating on the internet. Key players in the telecommunications sector.

Telecommunications: The transmission of information by various types of technologies over wire, radio, optical, or other electromagnetic systems.

Efficiency: In the context of ISPs, it refers to the ability to provide high-quality internet services using the least amount of resources, such as cost and infrastructure.

Data Envelopment Analysis (DEA): A performance measurement method used to evaluate the efficiency of organizations or decision-making units, such as ISPs, by comparing multiple inputs and outputs.

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