Current phone services in Nigeria are extremely poor, with less than 500,000 connected phones for a population of more than 100 million

With the largest population of any country in Africa, Nigeria offers a huge potential market for mobile phone operators.

The two companies have already paid close to $300m for their licences and are now leading the search for service subscribers.

Major investment

The South Africa-based mobile telephone network MTN says it is investing $1.4bn in its Nigerian operations.

Having already established a strong presence in countries like Rwanda, Uganda and Cameroon, MTN defines itself as a truly African telecommunications company.

Its board includes several prominent Nigerians.

Like MTN, the Zimbabwe-based Econet Wireless International was granted a licence at a special auction held in January.

The Zimbabwean company has also developed a series of networks in sub-Saharan Africa and enjoys strong backing from local banks in Nigeria.

The other licence holder is a Nigerian state telecommunications company, Nitel, which is set for a major restructuring programme after years of neglect.

Poor communications

Current phone services in Nigeria are extremely poor, with less than 500,000 connected phones for a population of more than 100 million.

Under the last military government, more than 20 licences were granted to small-scale operators, leaving customers confused and dissatisfied.

The current government has been applauded for the openness of its auctioning process and its willingness to back foreign investors.

The mobile phone companies are promised a period of rapid expansion and have talked confidently of generating large profits from a long-term involvement in Nigeria.