CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

The past 15 years have brought an unprece­dented increase in access to telephone serv­ices. This growth has been driven primarily by wireless technologies and the liberalization of telecommunications markets, which allowed for faster and cheaper rollout of mobile networks. The total number of mobile phones in the world surpassed the number of fixed-line telephones in 2002; by the end of 2008, there were an estimated four billion mobile phones globally (Wireless Intelligence, 2008). The proportion of mobile phone subscriptions in developing countries increased from about 30% of the world total in 2000 to more than 50% in 2004 - and to almost 70% in 2007. No technology has ever spread faster around the world (The Economist, 2008). The intro­duction of competition in the mobile telephony market has often led to an immediate growth of mobile penetration (Figure 1). Countries that have taken decisive steps to establish in­dependent regulators and foster competition have seen notable improvements in sector per­formance. In some cases, the announcement of a plan to issue a new license has been effective in triggering growth, encouraging the exist­ing mobile phone operator to improve service, reduce prices, and increase market penetra­tion before the new entrant started operations. 

In recent years, steep price reductions (Figure 2), driven by technological advances, market growth, and increased competition, have contributed to the rapid expansion in mobile phone use inmany countries. Increased use of prepaid serv­ices allows mobile customers to make payments in small amounts instead of having to commit to fixed monthly subscriptions. For those who could not afford their own handsets, small loans were made available, mainly to the rural poor, to en­able them to buy a mobile handset, an antenna and a large battery. This gave enterprising indi­viduals an opportunity to rent phones to other villagers and charge for calls (The Economist, 2009). Furthermore, prepaid cards, often avail­able in small denominations, enable even low-income consumers to have access to mobile com­munications, leading to higher penetration rates in poor and rural areas.In the past few years, several macroeconomic studies have suggested a link between mobile phones and economic growth (The Economist, 2009).

Sridhar and Sridhar (2004) investigate the relationship between telecommunications and the economic growth using data from 28 developing countries. The study finds that there is a positive impact of fixed lines and a significant impact of mobile phone penetration on national output. The impact of telecommunications penetration on total output is found to be significantly higher for developing countries than for OECD countries. Waverman et al ii (2005) have found that mobile telephony has a positive and significant impact on economic growth. Extra 10 mobile phones per 100 people in a typical developing country added 0.6 percentage points of growth in GDP per capita, and this impact is about twice as large in developing countries than in developed countries. 

The results concur with the theory that mobile phones in less developed economies are playing the same crucial role that fixed te­lephony played in the richer economies in the 1970s and 1980s. Mobile phones substitute for fixed lines in poor countries, but complement fixed lines in rich countries, implying that they have a stronger growth impact in poor countries. Lee et al ii (2009) examine the effect of mobile phones on economic growth in Sub-Saharan Africa where a marked asymmetry has been ob­served between fixed line penetration and mo­bile telecommunications expansion (in favor of the latter). The findings show that mobile cellular phone expansion is an important determinant of the economic growth rate in Sub-Saharan Africa. The contribution of mobile cellular phones to economic growth has been growing in the region, and the marginal impact of mobile telecommu­nication services is even greater in areas where fixed-line phones are rare. The research shall therefore investigate enhancing Nigerian economy through wireless internet network.

1.2    STATEMENT OF THE PROBLEM

The advent and development of   wireless internet have brought an unprecedented increase in access to telephone serv­ices. This growth has been driven primarily by wireless technologies and the liberalization of telecommunications markets, which allowed for faster and cheaper rollout of mobile networks. But how can this significant shift be made to propel developments in the economy; This research investigates enhancing Nigerian economy through wireless internet network.   

1.3    RESEARCH QUESTION

1.   What is the nature of wireless internet network?

2.   What is the significance of wireless internet network in enhancing Nigerian economy?  

1.4    OBJECTIVE OF THE STUDY

1.   To determine the nature of wireless internet  network

2.  To  determine the role of wireless internet network in enhancing the Nigerian economy        

1.5    SIGNIFICANCE OF THE STUDY  

The study shall provide a theoretical and conceptual appraisal of wireless internet network and shall serve a reference point of information to IT consultants and professionals.  

1.6    STATEMENT OF HYPOTHESIS  

Hypothesis 1

H0      Wireless internet  network is not significant

H1      Wireless internet network is significant

Hypothesis 2

H0      The level of wireless internet network is low          

H1      The  level of wireless internet network is high  

Hypothesis 3

H0      The impact of wireless internet network on the economy is low

H1      The impact of wireless internet network on the economy is high.

1.7    SCOPE OF THE STUDY

The study centers on appraising enhancing Nigerian economy through wireless internet network.  

1.8    DEFINITION OF TERMS

WIRELESS INTERNET NETWORKS: The unprece­dented increase in access to telephone serv­ices growth has been driven primarily by wireless technologies and the liberalization of telecommunications markets, which allowed for faster and cheaper rollout of mobile networks.