Tricom is a telecommunications services supplier based in the United States of America, and the 2nd largest U.S. radio bearer in the United States, with estimated one-year grosss of US $ 92.8 million with its caput quarters in Detroit.
The company is listed on the New York Stock Exchange ( NYSE ) and operates across two sections which are wireless and wire line. Its wireless section provides both wireless voice and information communications services across the U.S.Due to the impregnation of the American market and the on-going economic crises taking topographic point in most parts of the universe, there has been a demand for the company to look for chances in other international market. The Emergence of the Telecommunications sector in sub Saharan Africa has non gone unnoticed by major transnational companies in this industry across the Earth and as a research worker Tricom with operations based in United States, the company has late decided to ship on International Business as portion of its scheme to turn and increase its market by puting in Nigeria.This study is based on the appraisal of the Nigerian telecommunication market with a vision of set uping if Nigeria is a feasible investing chance or non.
The chief purpose of this study is to advice the CEO and the top direction of Tricom on the signifier of Foreign Direct Investment ( FDI ) that would be suited for its operations in Nigeria. It addresses the overview of the telecoms industry, facets of the Nigerian market like trade forms between the United States of America and Nigeria, concern systems, cultural conditions, and the national concern systems in Nigeria, how they influence the telecoms industry and preferable manner of entry. This besides highlights the exchange rate governments that govern the United States and Nigeria investing barriers, the competitory advantages available to Tricom the hazards that MNCs like Tricom are exposed to.
Introduction
Since the transportation of Public ownership of telecommunication endeavors in 2001, the telecommunications sector has experienced a rapid addition in growing and a immense impact on the economic system ‘s growing. With this rapid growing, big multinationals are eager to take chance which will increase their planetary presence, market laterality and besides their profitableness.The intent of this study is demonstrate research in the country of International Business, analyzing and sing the national concern systems, cultural conditions and other factors that relates to international concern in both the USA and Nigeria within the telecommunications industry. Our ultimate purpose is urge the best possible concern scheme to the direction of Tricom that can be implemented to act upon its manner of entry into Nigeria.
1.
1 REVIEW OF TELECOMMUNICATION INDUSTRY GLOBALLY AND IN NIGERIA
Hardy ( 1980 ) argued that a possible correlativity between telecommunications, infrastructural development and economic growing. Both developed and developing states have gone through privatising procedures in their telecommunications sector in order to better service and interconnect ability. Though developing states might hold different grounds for denationalization, such as eliminating external debts and purposes for obtaining foreign direct investing, the betterment in service might assist convey them into the planetary market.The universe is so in the information and cognition based economic system given the uninterrupted and omnipresent handiness of processed information at the velocity of visible radiation. In the last 50 old ages or so, alone promotion has been made in the country of information and communicating engineering that it has become one of the most of import industries.The telecommunications industry has experienced a rapid and structural alteration over the past decennary.
From 1996-2006, the figure of fixed-line and nomadic endorsers grew from less than 1 billion worldwide to about 4 billion ( economic system ticker, 2009 ) . The dramatic growing of the sector coincided with the widespread liberalisation. Public ownership of the telecommunications sector was besides squared with the economic thought of the 1970s, which favored big investings in cardinal sectors that were expected to excite economic growing. However, particularly before 1998, the spread of liberalisation had been uneven.The liberalisation of the telecom sector along with increased competition among participants have brought significant benefits to consumers in footings of lower subscription rates and enhanced pick. In 2002, the NCC embarked upon a procedure of licencing fixed wireless local cringle operators.
The Nigerian market has moved to a to the full liberalized market where the jurisprudence of jungle has been replaced by the jurisprudence of competition. NCC has removed the barriers to market entry and is now trusting upon natural market forces to guarantee market sustainability.Figure 1.1a: Growth of the Nigerian telecommunications IndustryBeginning: Teledensity and Subscriber base vs. day of the month *Figure 1.1b: Development of competition in the nomadic telephone section in Africa, selected old ages ( per cent ) . Beginning: ITU ( 2004 ) .The Nigerian telecommunication sector received a planetary acclamation as one of the fastest turning nomadic markets in the universe.
Its major part to the economic system includes employment coevals, gross coevals to Government, foreign direct investing and private investing.Furthermore, a figure of International bureaus and many-sided establishments have besides been puting in the Nigerian telecoms industry for illustration, in April, 2008 Stanbic IBTC Bank had a private arrangement of a 9.45 % equity interest in MTN Nigeria for US $ 944,709,757.
Tella et Al ( 2007 ) further identified other moneyman of the telecommunication sector to include the Export – Import Bank of the US ( US Exim Bank ) , African Export – Import Bank ( Afrexim ) , African Development Bank ( ADB ) , Development Bank of South Africa ( DBSA ) , and DMO Germany.
1.2 THE State
The tabular array 1.2 shows an analysis of both the America and Nigeria, demoing a brief sum-up of the major characteristics of the states.the table below has shown that Tricom would hold a competitory advantage in Nigeria due to the rapid economic growing.FeaturesgeographicDemographiceconomicstatesDegree centigrades: UsersSukkyDesktopindex.jpgAmerica
Capital City
Washington
Landed Area
9,826,675 sq kilometer
Language
English
Population
308,745,538
Labour force
154,300,000
Life Expectancy
77years ( work forces ) and 82 old ages ( adult females )
Main Export
Cars, agricultural merchandisechemicals, computing machines, telecommunications
GNI per capita
US $ 46,381
GDP growing rate
1 – 2.
6 % per annum
currency
us dollarsDegree centigrades: UsersSukkyDesktopindex2.jpgNigeria
Capital City
Capital of nigeria
Landed Area
923,769 sq kilometer
Language
English
Population
148,000,000
Labour force
47,000,000
Life Expectancy
46years ( work forces ) and 47 old ages ( adult females )
Main Export
Petroleum, crude oil merchandises, chocolate, rubber
GNI per capita
US $ 930
GDP growing rate
6.5 % per annum
Currency
nairaTable 1.2- Country Analysis of America and NigeriaBeginning: Table prepared with information sourced from university of Pennsylvania – African surveies centre as at the terminal of 2009
2.0 NATIONAL BUSINESS SYSTEMS AND CULTURAL CONDITIONS IN NIGERIA
Culture is seen as the incorporate form of human cognition, what people eat, how they dress, activities they pattern, belief, usage and behavior as a member of the society ( Hofstede, 1984 ) .macroeconomic variable such as Cultural patterns, Economic, Political, Educational and Legal systems of Nigeria must be carefully considered before taking an investing determination ( Hill, 2008 ) . This gives a clear image on the deductions on the telecoms industry and how they can act upon Tricom operations and investing in Nigeria.
These macro economic variables are highlighted below.
2.1 ECONOMIC SYSTEM
Economic system
Nigeria is the most popular state in sub Saharan Africa ‘s most with a population of over 150 million. Nigeria has been plagued by political instability, corruptness, civil agitation, unequal substructure, and hapless macroeconomic direction but in 2008 began prosecuting economic reforms. Nigeria ‘s former military swayers failed to diversify the economic system off from its overdependence on the capital-intensive oil sector, which provides 95 % of foreign exchange net incomes and approximately 80 % of budgetary.
The size of the Nigerian economic system as measured by the nominal GDP was $ 212.8 billion. Since twelvemonth 2000, the GDP has been increasing at an norm of 5.9 % each twelvemonth. However, it merely grew by 5.3 % in between 2007 and 2008 ( Central Intelligence Agency, online, 2009 ) . The worsening growing of the oil sector caused by perturbations in the Niger-Delta country was to fault for decrease in oil end product. Other sectors such as agribusiness, sweeping and retail trade, building and services have continued to demo strong public presentations.
Harmonizing to a survey by Augustus and carbon monoxide in 2007 the communicating sub-sector recorded the highest growing rate at 31 % . This impressive growing can be attributed to the liberalisation of the sector and the outgrowth of nomadic telephone. Inflation and unequal power supply besides have to be considered as they are considered as restraints to industrial growing.USA ‘s GDP was $ 12,376.10 billion in 2005 and the radio telecoms sector provided 2.5 % of this figure. At an one-year growing rate of 15 % the industry is expected to go a larger sector of the economic system than the agribusiness and car sectors within five old ages ( Enter and Lewin, 2005 ) .
Table 2.1-analysis of the economic system
Table 2.1 National GDP and Telecommunication Contribution to GDP ( 2003- 2007 )
Year
GDP at 1990 Changeless Basic PricesTelco Contribution at 1990 Changeless Basic Prices
Telco Contribution
Annual Growth Rate National
Annual Growth Rate
Telephone company
=N= Million
=N= Million
%
%
%
2003495,0074,6280.939.5743.022004527,5766,0161.146.5829.
992005561,9307,8111.396.5129.842006593,57011,2401.
895.6343.902007630965
–
–
6.30
–
Beginnings: National Bureau of Statistics and Central Bank of Nigeria Annual Report 2006 ( Growth rates calculated by the Author ) GDP growing in 2007 i.e. 6.
3 % as per World fact book on Nigeria ( 2007 ) indexs
2.2 POLITICAL SYSTEM
Political system
Nigeria gained its independency in 1960 and as a consequence of democracy, several sectors in the economic system have been privatised or liberalised to let or ask for foreign direct investing into Nigeria. The political environment has been really volatile due to the spiritual feud between the Christians and the Muslims who strive for changeless political power.
However, since the passage to democracy in 1999 the political state of affairs has become more stable. Assorted sectors of the economic system have been liberalized from the monopoly of province run organisations. The most outstanding liberalization is the breakage of the monopoly of NITEL. The authorities granted telecommunication licenses to private concerns in 2001. This led to a rapid alteration in the usage of telephone in Nigeria. The Teledensity increased from 0.45 per 100 in 2001 to 28 per 100 in 2006 ( Augusto and CO, 2007 ) . This development besides brought alteration in related sectors particularly Information Technology.
Other political influences that should be considered include high degree of corruptness particularly among authorities functionaries, civil agitation in some countries like the North and Niger delta. Nigeria was ranked the 37th most corrupt state in a study of 179 states ( Transparency International Online, 2009 ) . To contend this societal frailty the authorities set up the Economic and Financial Crimes Commission ( EFCC ) . The civil agitation should besides be taken into consideration as aliens and adept rates are frequently their cardinal marks.
Table 2.
2-analysis of the political system
2.3 TECHNOLOGICAL SYSTEM
Technological system
Technological system provides an enabling environment required for rapid growing of technological and industrial development and comprises of physical and human variables such as energy, H2O, conveyance, communicating, fiscal and human capital ( Isamah, 2002 ; Afonja, 2003 ) . These substructures provide the basic model for a state to back up indispensable public services in order to accomplish higher economic growing and better quality of life.Nigeria has witnessed important addition since 2001 as most of the exchanges have become digital a figure of webs are wireless 3rd coevals compatible. Smaller CDMA webs have installed 3G equipments in preparedness for future growing ( Augusto and CO, 2007 ) . To enable efficient communicating with the outside universe, the Nigerian authorities and 35 other African states have invested in a pigboat overseas telegram system called Sat3/WASC/SAFE ( SAT3 ) . The Sat3 provides choice voice, informations and broadband services which are necessary demands for all ICT service suppliers. Nitel proctors and controls the usage of this system.
For a long clip Sat3 was the lone available pigboat overseas telegram system available in the state. However there is a demand to better on the substructure of the telecoms sector.
Table 2.3.
analysis of the technological system.
2.4 LEGAL SYSTEM
The legal system in Nigeria is the Civil Law System and it is guided by the 1999 fundamental law. The Corporate and Allied Matters Act ( CAMA ) of 1990 is what is used as a usher for concern constitutions in Nigeria.
The legal system in the local authoritiess besides includes customary tribunals and the Islamic judicial system that is practiced by some provinces within the federation. All affairs related to company patterns are handled by the federal authorities.For any company in Nigeria to be recognised, a legal entity has to be registered with the Corporate Affairs Commission ( CAC, Online 2009 ) .Nigeria is noted for its high corrupt patterns, the state has instituted such bureaus like the EFCC and ICPC to control unethical patterns which has led to an betterment in the state ‘s economic system. Sing the fact that the state is bounded under the ICJ opinion, we do non anticipate that there will be patterns that are similar to international legal patterns.
EDUCATIONAL System
Nigeria operates the 6-3-3-4 instruction system which is similar to that of America.
The authorities spends 0.7 % of its GDP every twelvemonth. Despite the immense outgo the authorities incurs on instruction, there is still a high degree of illiteracy doing the educational end product low in the state ( CAC, Online 2009 ) .This might be a reverse when enrolling qualified staff to work for Tricom.
CULTURAL SYSTEM
Culture is a manner of life of different persons populating in the same part. Hill ( 2009 ) defined civilization as a system of values and norms that are shared by a group of people. Nigeria is a state with assorted cultural groups, rich civilization civilizations and several linguistic communications.
Even though the tongue franca the major linguistic communications spoken are Yoruba, Ibo and Hausa. The Nigerian cultural conditions have played an of import function in act uponing the social values. Hill ( 2009 ) segmented the cultural system of an economic system into four sections which are: societal construction, societal stratification, spiritual and ethical system and linguistic communication.Therefore, Tricom should be prepared to give a nice period of clip to cognize people on a personal footing and accommodate their cultural values. A twosome of twelvemonth ago merely grownups that were good to make used mobile phones. It was seen as a position symbol. Religion plays a major function in the cultural make up of Nigeria and different countries of identify with different.
Trade RELATIONS BETWEEN THE US AND NIGERIA
Form OF Trade IN THE US
The United States economic system is the universe ‘s largest national economic system and is the universe ‘s prima state in absolute volumes of imports and exports. Its nominal GDP is estimated to be $ 14.3 trillion as at 2009, which is about a one-fourth of nominal planetary GDP. Its GDP has the largest para in the universe and is a fifth of planetary GDP at buying power para.
The US dollar holds a big portion of the universe militias, and is seconded by the controls about 24 % .Due to the un traveling recession taking topographic point in America, its public debt has gone in surplus of $ 13 trillion and is expected to steadily increase at a rate of about $ 5.48 billion each twenty-four hours by direct computation between Jan 31, 2010 and August 31, 2010. The American labour market has attracted immigrants from all over the universe and has one of the universe ‘s highest migration rates.
The United States is ranked 4th, down from first in 2008-2009 due to the economic crisis, in the Global Competitiveness Report.Major merchandising spouses with the America are, Canada, Mexico, China, Japan, Germany and United Kingdom. Its chief exports are Agricultural supplies, Capital goods such as transistors, aircrafts, motor vehicles parts, telecoms equipment, Consumer goods such as car, medical specialty and telecommunication equipment. Its major spouses as respects to imports are China, Canada, Mexico, Japan, Germany, with merchandises such as Machinery, Chemical, Transport equipment, manufactured goods, nutrient, and unrecorded animate beings ( economic system ticker, 2010 ) .
Form OF Trade IN NIGERIA
Nigeria is a West African economic system with a long coastline along the Atlantic Ocean. It is graded 31st in the universe in footings of GDP as of 2009 with net imports of $ 42.1 billion and net exports of $ 45.43 billion in 2009.
Its fabrication sector is the second-largest on the continent, bring forthing a big proportion of goods and services for the West African part. The state has a entire population in surplus of 154 million and the state ranks 151 out of 177 with the highest poorness rate on the UN Development Index for states. Nigeria ‘s economic system is overly dependant on the crude oil sector.it is the 12th largest manufacturer of crude oil merchandises in the universe. The industry accounts for about 80 % of the GDP portion and above 90 % of the entire exports. Outside the crude oil sector, the Nigerian economic system lacks basic substructure.Major exports merchandising spouses with the Nigeria are China, Netherlands, U.
S, U.K South Korea and France. Its chief exports are U.S, India, Brazil, Spain, and France.
Its major spouses as respects to imports are China, Canada, Mexico, Japan, Germany, with merchandises such as Machinery, Chemical, Transport equipment, manufactured goods, nutrient, and unrecorded stock ( economic system ticker, 2010 ) .
Trade PATTERN BETWEEN USA AND NIGERIA
Nigeria is the United States ‘ largest trading spouse and the largest foreign investor in Nigeria is the U.S.
A. Crude oil and liquefied crude oil gases represent 95.4 % of all Nigerian exports to America in 2008.Nigeria is the 14th largest exporter of goods to the United States ( US Department of States, Online, 2009 ) . The stock of U.S foreign direct investing in Nigeria was $ 2billion in 2004 but went down to $ 339 million in 2006 ( US Department of States, Online, 2009 ) .
These investings are concentrated chiefly in petroleum/mining and the sweeping trade sector. Harmonizing to the CIA World Fact book ( 2010 ) , Nigeria imported $ 45.5 billion worth of foreign goods last twelvemonth with its exports to America rose 16.2 % to $ 38.1 billion. Over that same period, Nigeria bought $ 4.
1 billion worth of imported U.S. goods.
Nigeria ‘s international trade amounted to $ 122.3 billion or 57 % in relation to its overall GDP.The tabular array below presents the top 10 exports and imports that American and Nigerian endeavors exchanged in 2008. The fastest-growing trade merchandise classs are besides listed.
Fastest-Growing Nigerian Exports to the U.S.
Fastest-Growing Nigerian Imports from the U.S.
Nigeria ‘s Top Exports to America
Civilian aircraft parts … US $ 2.2 million, up 8,181 % from 2007Tobacco, waxes, non-food oils … $ 3.5 million, up 6,343 %Cocoa beans … $ 34.3 million, up 393.
2 %Natural gum elastic and similar gums … $ 22.9 million, up 194.5 %Feedstuff and nutrient grains … $ 9.2 million, up 98.
6 %Nuts and readyings … $ 2.6 million, up 86.6 % ( 0.01 % )Other crude oil merchandises … $ 873.1 million, up 56.8 % ( 2.3 % )Fuel oil … $ 632.
6 million, up 54.1 %Tea, spices, and readyings … $ 1.5 million, up 51.
2 % Liquified crude oil gases … $ 1.2 billion, up 17 % .Corn … US $ 1.2 million, up 2,444 % from 2007Vessels, excepting bit … $ 3.2 million, up 1,419 %Rice … $ 1.4 million, up 817 %Generators and accoutrements … $ 68.1 million, up 692.
3 %Other crude oil merchandises … $ 422.8 million, up 471.9 %Vegetables … $ 1.3 million, up 402.
3 %Semiconductors … $ 9.2 million, up 374.1 %Cotton fibre cloth … $ 1.2 million, up 309.3 %Alcoholic drinks, excepting vino … $ 1.2 million, up 210 %Aluminium … $ 2.8 million, up 199.
5 % .Crude oil … US $ 35.1 billion, up 16.7 % from 2007 ( 92.2 % of US imports from Nigeria )Liquefied crude oil gases … $ 1.2 billion, up 17 % ( 3.2 % )Other crude oil merchandises … $ 873.1 million, up 56.
8 % ( 2.3 % )Fuel oil … $ 632.6 million, up 54.1 % ( 1.7 % )Natural gas … $ 110.3 million, down 81.6 % ( 0.3 % )Cocoa beans … $ 34.
3 million, up 393.2 % ( 0.1 % )Natural gum elastic and similar gums … $ 22.9 million, up 194.5 % ( 0.
1 % )Feedstuff and nutrient grains … $ 9.2 million, up 98.6 % ( 0.06 % )Tobacco, waxes, non-food oils … $ 3.5 million, up 6,343 % ( 0.02 % )Nuts and readyings … $ 2.
6 million, up 86.6 % ( 0.01 % ) .Beginning: site 101.com, 2008
3.
4TRADE IN THE TELECOM SECTOR BETWEEN USA AND NIGERIA
Nigeria is the largest and the fastest turning telecommunications market in Africa. It has over 1,863 licences that is managed by the Nigerian Communications Commission ( NCC ) .NCC has assisted the Nigerian telecommunications market is large manner as it deepens and expands its telecommunications substructure over the following 2-3 old ages. Since substructure is a critical factor in this market, makers and providers have immense chance for partnership in engineering and professional service.
Nigeria is a strategic gateway to the West African markets and offers U.S. houses a enormous growing chance that may be hard to be or transcend elsewhere. ECOWAS, the 16-member organic structure of West African states, late adopted a common currency known as Eco and portion a common duty. Interested U.
S. houses should take advantage of this concern chance.
3.5 Trade Barriers IN THE TELECOM SECTOR IN NIGERIA
A critical expression at the states of the universe indicates a huge difference in industrial and technological development.
While technological development is prerequisite for industrial development, the industrial sector is the major propelling force for technological development and invention ( Mytelka et al. 1994 ) .Trade limitation in the telecoms industry in Nigeria is really minimum. The telecoms industry depends entirely on expensive, high tech substructures and equipments to enable them function expeditiously as a web supplier. However, in the underdeveloped economic systems like Nigeria, the limited handiness of telecommunication substructure is restraining economic growing.
Nigeria telecommunication Industry is still in its baby phase, there is a deficit of substructure and the bing concerns are unable to run into demand. This is a ground why authorities can non put any trade limitations on this sector for now.
Exchange RATE REGIMES BETWEEN THE US AND NIGERIA
Multinationals companies such as Tricom should understand the exchange governments of the currencies of the states with which they trade in. These governments will assist cut down the hazard associated with the unpredictable alterations in the exchange rates. Foreign exchange markets allow the transition of currency from one to the other. It besides provides insurance against foreign exchange hazard which occurs as a consequence of unpredictable alterations in the exchange rates ( Hill, 2009 ) .Nigeria used to hold a fixed exchange rate system where its value was pegged against the US dollar to protect the currency by giving it a healthy balance of payment place.
In recent times, it has been changed to a controlled floating exchange rate which gives the authorities the authorization to act upon the exchange rate within a given scope. On other manus, the US adopts a floating exchange government where market forces find its value without any influence by the authorities ( Hill, 2009 ) .
Deduction OF THE NIGERIAN EXCHANGE Rate POLICY ON Trade
The value of naira steadily appreciated against the dollar between 2006 and 2009. However, during the clip of depreciation the value of a dollar steadily declined. The mean exchange rate stood at 128 naira to $ 1 and an grasp of 2.2 % over 2005 when the exchange rate was 131.7 naira to $ 1 dollar. The instability of oil monetary values has a great consequence on the market value of the naira as Nigeria depends chiefly on oil exports for its foreign exchange.
This instability has led to high guesss which makes it really hard to do prognosiss and besides programs and its execution ( economic system ticker, 2010 ) .
POLITICAL RISK ANALYSIS IN NIGERIA
Every economic system has its alone set of political hazard variables. Nigeria in this instance is a state with assorted civilizations, linguistic communications, faith and these differences dictates the political state of affairs of the state.
Since independency, Nigeria has witnessed many political bad lucks, military putschs, spiritual and civil agitation and really few successful elections. Multinational companies such as Tricom, willing to put in another state must take all these factors into consideration must fix themselves to confront any unanticipated state of affairss. Identifying, analyzing and calculating have become major growing countries for international concern advisers ( Rugman, 1986 ) .They most besides create a agency of cut downing these hazards. However, there are assorted stairss can be taken to cut down its consequence on the administration and its employees demoing its properties and deduction for concern every bit good as the hazard decrease steps are outlined below.Table 5.0 Political Hazard Analysis
Political Risk Issue in Nigeria
Deduction on the house
How to cut down the effects
Business ordinances
When transnational companies fail to stay by the regulations and ordinance sat by the authorities, there is a high chance of authorities intercession or a immense mulct.
Ensure prompt payment of revenue enhancements, duties, and responsibilities.Carry out favorable corporate societal duty programmesEnsure that regulations and ordinances of the authorities, NCC and other regulative organic structures are purely adhered to.Besides guarantee all relevant interest holders are carried along during determination devising procedures
Host Community relationship
And Socioeconomic Violence
Nigeria is noted for hostile community activities, particularly Niger-Delta country where concerns in the oil sectors are located, this is due to the recent activist activities and snatchs in that country, it has become an insecure environment for the adept rates or those who are seen to be of import in the society.Carry out favorable corporate societal duty programmes that would heighten the company ‘s relationship with the local communities.
Religious unrest
Nigeria is a state with different linguistic communications, traditions civilizations and spiritual beliefs. This has led a nonstop feud between some spiritual groups in the state particularly the Muslims and the Christians who try to support their beliefs. This has resulted in some parts of the state insecure for both persons and concerns.
The authorities has tried to control this spiritual agitation but to no help.Tricom should turn up its concern Major installations and offices should be located in countries that are non prone to civil or spiritual agitation. Tricom should avoid traveling to the northern portion of Nigeria and see largely the southern portion.
MODE OF ENTRY
There are assorted entry schemes available for Tricom to take from, which ranges from export to franchising, licensing and FDI ( Hill, 2009 ) . The nature of the concern eliminates the option of exporting because it is a web supplier. The usage of franchising and licensing would give local operators the right to utilize the company ‘s trade name name and giving support in footings of preparation and proficient expertness while the company pays Tricom committee or royalties ‘ . Sing the chances that exist in the Nigerian market and the willingness of the Government to back up the enlargement of the telecoms sector, FDI would be the suited manner of entry for Tricom. Tricom trade name name and size which will supply economic systems of graduated table would be decently exploited to set up itself as a strong participant in the sector that is still regarded as being in its infant phase.
The size of the Nigerian population is really attractive. Tricom has sufficient financess to drift and a green field investing and is willing to take advantage of the deregulated telecoms sector. However, judging by the political and cultural kineticss of Nigeria and the clip every bit good as the preparation it would take to construct a competitory trade name, the chosen manner of entry is acquisition. This study recommends that Tricom should get one of the bing telecoms companies and incorporate its trade name name, size, fiscal capablenesss, and proficient expertness with a company that already exists in the local environment.
7.0 RECOMMENDATIONS
Nigeria stands to be a feasible investing chance for the international enlargement program of Tricom. Due to the deregulating of the telecoms sector in Nigeria, the remotion of the major entry limitation has led to the birth of fastest turning sector in the economic system. The growing rate of the telecoms industry in Nigeria is one of the grounds it is seen by the universe as an emerging economic system with ample chances. Tricom is advised to take advantage of the chances that exist in this quickly increasing industry, acquisition of an bing telecoms company has been recommended.
This is due to the fact that puting up cost is high and investing is long term liberalisation and deregulating enterprise of the Nigerian authorities will do it much easier to come in the market. A ample presence should be created in the industry and compete favourably within a comparatively short period.This will heighten Tricom end of increasing its planetary market portion and presence as it enters other African states.
