Ben Uzor Jr
Nigeria’s telecommunications market will witness stiff competition
in the next four years. Etisalat is looking to overtake two of its key competitors
in Nigeria by redefining and redirecting its current marketing and operational
strategies towards offering better customer services and strengthening its grip
on the youth segment, which constitutes Nigeria's largest consumer group. The youth
segment is key to the success of the telecom sector because Nigeria has a youth
population of approximately 80 million – 60 percent of the total population of
167 million, according to the National Bureau of Statistics (NBS).
Analysts argue that every telecoms company’s strategy should have
a good share of that segment because youths are vibrant, they represent the
majority of the population, and a huge volume of youth become gainfully
employed every year, gaining the capacity to spend more on goods and services,
including telecom services .Butressing this fact, the bulk of the advertising
and promotional campaigns of telecoms operators is clearly targeted at the
youth segment market. Industry analysts told Business Day yesterday that the
UAE mobile phone firm with reported net revenue of $8.4 billion would also to
further expand the scope of the market by moving beyond offering mundane data
services if it intends to overtake Globacom and India's Bharti Airtel in the
next four years so as to sit behind South Africa's MTN in the pecking order of
the largest operators. The telecom company had earlier revealed that it
strategic target is to hit 16 million subscriber mark by the end of the year.
So far, it has 13.3 million customers, up from 9.8 million at the
end of last year. As at March 2012, Globacom and Airtel have recorded 20.8
million and 18.6 million active subscriptions respectively. In a little under
four years, Etisalat has managed to capture a 10 percent market share of the
Nigeria’s highly lucrative telecom market despite arriving later than its
rivals. Lanre Ajayi, president of the Association of Telecommunications
Companies of Nigeria (ATCON) told Business Day in a phone interview, yesterday
that the telecoms company’s current growth trajectory clearly reveals that they
would surpass Globacom and Airtel Nigeria in the next four years. “If you watch
the way they have grown in about four years, I won’t be surprised if they meet
that target. “They were a late entrant into Nigeria’s highly competitive telecoms
market. “But their performance has been very impressive over the years.
“However, it is very clear indeed that there is a pent up demand
for broadband access through 3G dongles in the country. Etisalat must focus on
meeting the demands of internet users by offering efficient and affordable
broadband services. In my opinion, Etisalat’s projections are realizable
especially given their antecedence globally. Etisalat owns 40 percent of the
Nigeria business, with 30 percent held by Mubadala Development, a strategic
investment company owned by the Abu Dhabi Government. The remaining 30 per cent
is held by Myacinth, a group of Nigerian shareholders led by Hakeem Belo
Osagie, the chairman of Etisalat Nigeria. “I also believe that the beginning of
number portability scheme will also be a game changer for Etisalat. With the
scheme, customers now have real options on where to go for their mobile
services because they can switch to another network without having to buy
another SIM.”
According to him, Etisalat would need to up investments in network
expansion to take advantage of the scheme expected to commence in August this
year. When the scheme comes on stream, Ajayi expects that the firm to lure more
customers unto its network by offering better customer service, developing
innovative products, widening distribution and lowering tariffs. Usen Udoh,
senior director, high communication at Accenture told BusinessDay in a phone
interview on Tuesday that offering best-in-class customer service will assist
Etisalat in growing more subscriber numbers and consequently overtaking
Globacom and Airtel. “It is all about customer service. Very soon, there is
going to be a rules relating to sharing of base stations and telecoms
equipments. This means any operators can tap into existing infrastructure
investments. So, the game is no longer about who has the largest network.
“Etisalat is currently investing significant financial resources
in upgrading systems, strengthening internal processes and manpower in
preparation of the intense competition expected in the telecoms industry.
“Airtel, Globacom on the other hand are not making the same investments. Number
portability would also play an integral role here for Etisalat. The losers here
will be operators who render poor telecoms services. “If you look at the
industry critically, Etisalat has slowed down on promotions and are improving
their internal capabilities”, he explained. In addition, analysts expect the
company to focus more on data services. This is even as voice revenues
declining rapidly in Nigeria’s telecoms market due to fierce competition. But
while the number of new customers joining Etisalat's mobile-voice network is
slowing to about 10 percent a year, activity within the mobile-data segment is
rising.
The number of new subscribers for deals that include mobile Web
browsing is increasing 10 percent per month, the company says. Steve Evans,
chief executive officer, Etisalat Nigeria said in an interview that, “The
battle for customers is turning more and more to data,". To meet
anticipated future appetite for data, Etisalat is investing more than $400
million to improve its network infrastructure. That is in addition to the
excess of $2 billion that Etisalat's partners have already sunk into gaining a
foothold within the industry. “It's tearing along. “We have a very aggressive set of targets and
are looking at between 15 and 16 million subscribers by the end of this year.
We are on track to achieve that,” Evans said.
Etisalat is facing a renewed challenge from its rivals as they cut
tariffs and invested in their networks in an effort to compete with the
company. "The competition has upped its game,” he said.
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