. . . Expect to be cash-flow positive in 18 months
Ben Uzor Jr
Airtel Nigeria is building a 3G network expected to cover 80 percent of Nigeria’s population by 2012 and required to offer reliable and affordable internet services to its customers, Rajan Swaroop, chief executive officer, Airtel Nigeria, disclosed in an interview. This is even as the data market has emerged as the new ‘competition war front’ for telecommunications firms in the country. An analyst told Business Day that the project was strategic for increasing market share as the bulk of telecom revenue in Nigeria was expected to come from mobile broadband and data services in the next five years.
Swaroop noted that Airtel was spurred on by the prospect of boosting revenue from internet data services as voice tariffs continue to fall. “We are building a 3G (Third Generation) infrastructure and by the time we’re finished, we will have covered 70 to 80 percent of the population and that’s maybe one year away. We currently have 100,000 to 150,000 subscribers but we strongly believe that the overall potential for this is something like 2 million subscribers out of an overall total of 16 million.
Commenting on the company’s financials, the Airtel boss revealed that over the last 12 years, the performance of the business has been declining but by virtue of the investments made in infrastructure deployment, he believes Airtel Nigeria would be self-funding and cash-flow positive in the next 18 months. “We also intend to encourage the Nigerian Communications Commission (NCC) to introduce Mobile Number Portability. Then the best provider will be successful.”
Giving vivid insight into the company’s position with regard to international fibre and acquisition of bandwidth capacity, Swaroop disclosed that the telecom firm had bought significant capacity from both MainOne and Glo-1 cables. “The price per MEG is down to US$300-350 per MEG per month at volume and this price is a substantial drop and what was available previously. We will probably double our capacity in the next 6-12 months and prices will come down again.
“They are currently pretty high compared to rates across the world. In India, it is sub US$10 per MEG. Bharti Airtel, who took over mobile operations in 15 African countries in a deal that makes it the world’s fifth-biggest mobile firm with 180 million customers in 18 countries, is known for its low-cost strategy but the firm has revealed that it will not adopt the same strategy which has made it India’s market leader. In India, Airtel’s call rate charges are as low as 1US cents as against the 20US cents charged in Nigeria currently. “We have not dropped prices significantly in Nigeria.
It’s no good having a too good N12 product that is actually a N14 product. But with our new tariffs, we’ve created excitement and pull. “There’s not been huge numbers but there has been some change. We wanted to see what kind of reaction there would be to this kind of offer and galvanise our sales distribution process. The question was: can we galvanise our own teams.
If the answer was positive, then I think we can stand and fight. We didn’t want to do disruptive price packages because we don’t believe the lead to customer stickiness or loyalty. I’m going to see how I can take some customers from others but we don’t want to destroy the value in the business”, he posited. In the area of customer care service which some telecoms operator often say differentiates them, he explained that the firm needs to provide higher levels of customer service as it was discovered that 90 percent of its customer care calls failed to get through to the call centre.
“We’ve added 1,400 people and bought this number down by 30 percent. By April this year, we should have cleared the backlog out and got that figure down to 5 percent or less. We’re also enabled customers to use self-help services. And for example on what’s the balance at the end of a call? We’re pumping up capacity on that. We’re setting a level of quality of service we should be able to sustain”, the CEO maintained.
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