Ben Uzor Jr
Nigeria’s telecommunications landscape has continued to
record significant milestones after the successful liberation and deregulation
of the sector in 2001. Due to resourcefulness and tenacity of mobile network
operators to expand their networks across the country, the sector witnessed a
quantum leap in the number of telecoms subscribers from less than 500, 000
active lines in 2000 to over 101 million active lines in 2012.
In spite of significant strides in telecoms, there have
been numerous challenges, mainly revolving around tariff and quality of
service. Overall, the advent of GSM in Nigeria has significantly advanced the
lives of Nigerians individually and collectively, stimulating economic growth
by facilitating cross-industry linkages and improving efficiency.
To tackle the various challenges that have often dampened
the enthusiasm of mobile phone users, the GSM operators have rolled out
numerous technological innovations and creative marketing solutions over the
last 10 years. Considering that the issue of quality of service has to do with
capacity, the operators have continuously invested in their networks with a
view to expanding capacity in order to meet the demand for their services. The
race has by no means come to an end; it hardly will in the next few years.
Millions of Nigerians still do not have access to
telecoms services. A recent study conducted by MTN revealed that over 850
villages had never had access to any form of telecoms services. Besides, there
is countless number of Nigerians anxiously waiting for the opportunity to have
their first mobile phone. Aside from this, much more investment is required to
enable the networks deliver first-rate quality of service.
Gbenga Adebayo, chairman of the Association of Licensed
Telecommunication Operators of Nigeria (ALTON), noted that much may not be
achieved in the march for best-in-class quality of service in the country unless
more base stations were built to match the demand for service in the market.
According to Adebayo, at least 60,000 additional Base
Transceiver Stations (BTS) were needed for rural inclusion, adding that
protection of telecoms infrastructure must be given priority attention,
otherwise street urchins will cause more harm than good.
Considering the challenging operating environment and
other drawbacks which inhibits the base station or telecoms mast roll out,
mobile network operators are tasked to look for immediate solutions to meet the
yearnings of their teeming subscribers.
Apparently, the two principal needs of most subscribers
in Nigeria’s telecoms market are tariff reduction and improved quality of
service. These two, at the current level of infrastructural development in
Nigeria, would appear to be mutually exclusive.
Without the industry growing its capacity to a level that
it can conveniently accommodate the demand of the subscribers, reduction of
tariffs will invariably continue to strain service quality. It is therefore no
coincidence that most massive slashes in tariffs by telecom operators in
Nigeria in the last few years have been consequently attended by a period of
sub-par quality of service across the nation.
As a testament to the ingenuity of the operators and
their quest to seek cutting-edge solutions designed specifically to address
local challenges, they have introduced an innovative solution that seems to
meet the two topmost quests of subscribers in this market all at once.
Dynamic Pricing
By dynamic pricing, it is possible for telecom operators
to reduce tariff without necessarily experiencing network congestion. It is a
solution that offers subscribers generous tariff discounts in areas where
demand on network resources is low, and offer marginal or no tariff discounts
in busy network areas.
That way, telecom subscribers in a busy or high traffic
network area will be encouraged to defer their calls till they get to low
traffic network areas where they can enjoy generous discounts. In a nutshell,
the idea that this solution tries to sell to users is simple: If you are making
calls during busy hours from a busy business area, you will end up paying more
for your calls than you will if you delay the calls till you get to less busy
locations.
With this message in mind, customers generally seek out
low traffic areas to make their calls, thereby helping to reduce congestion in
busy network areas. Consequently, this solution creatively avails subscribers
the much desired tariff reduction, while creating an avenue to control the
perennial issue of congestion in certain areas within the network.
Lanre Ajayi, National President of the Association of
Telecommunication Companies of Nigeria (ATCON) told Business Day in an
interview that Dynamic pricing will be beneficial to the telecoms market.
“We are operating a deregulated sector where operators
can initiate and set tariff regimes. I also believe that any operator going
down this path would have the necessary approval from the Nigerian
Communications Commission. In all, it is a good development because it would give
telecoms subscribers more alternatives in how they decide to manage their
telecom spend.
“Besides, it would go a long way to address the issue of
network congestion. The Nigerian telecoms industry is a very competitive one.
Operators are continually looking for new ways to fight competition and thus
improve revenue generation”, he stated.
Timothy Akinyemi, a telecoms engineer told Business Day
that the solution is a feature of Next Generation Prepaid platform made
possible by the technology backbone called Intelligent Network (IN).
According to Akinyemi, “This approach allows telecoms
operators to handle 50 percent more traffic per BTS, helping them address the
congestion of network.” In spite of what critics may say, telecoms operators in
the country are sparing no resources to acquire top of the range technology and
solutions to provide satisfactory service to their customers.
Indian perspective
Uninor is one telecom company that has taking advantage
of dynamic pricing to garner marketshare in India’s highly competitive
telecommunications market. Uninor is a joint venture between Norwegian
telecommunications company Telenor and an Indian Real Estate company Unitech.
The company was the first in the world to introduce a ‘Dynamic Pricing’ to
mobile call charges.
Based traffic experienced by a wireless tower servicing
any area a customer can receive discounts ranging from 5 percent to 60 percent.
This particular service has been very well received in the market with Uninor
commanding as many as 106 million subscribers. In 2011 alone Uninor added as
many as 2.03 million subscribers. Off the total number of users Uninor
currently has 40 percent of the subscribers under the ‘Dynamic Pricing’ Plan.
MTN’s story
MTN Nigeria has introduced this novel solution for the
benefit of its subscribers. Indeed, MTN Nigeria with revenue of N273.33billion
in 2012 is not the only operator which has introduced this solution.
A couple of others have previously introduced the solution
under various names, and with various tariff discounts. However, MTN is
introducing its own package with as much as 100 percent tariff discount,
depending on where subscribers are making their calls.
Larry Annetts, chief marketing officer, MTN Nigeria,
said: “MTN Zone is a product of our desire to continuously delight our
customers and give them much more value for their money. The service offers
attractive discounts to our customers depending on the prevailing discount
rates available on the cell site from which they receive signal.”
MTN had previously run the service on a successful pilot
phase in select locations in the country. MTN Zone was later fully developed
and activated in Lagos, Rivers, Imo, Anambra, Ogun and Bayelsa States. The
workings of the service are simple.
MTN customers are advised on an ongoing basis, the
discounts available in the various locations they move into. This is usually
done through a service called cell broadcast. Every customer is able to
activate the cell broadcast facility on his or her phone by following a set of
instructions provided by MTN. Once activated, the screen of the subscriber’s
phone will subsequently display available discounts wherever he or she moves
to.
The broadcast messages are updated and transmitted
regularly to keep customers abreast of prevailing rates where ever they may go
within the area of coverage of the service. One interesting feature of the
service is the ability of customers to receive discounts for calls and short
messages they send to friends, business partners and loved ones on other
networks and even on international lines.
The service allows customers to have control over their
spent on calls. They can decide to delay certain calls till they get to their
homes or offices where they usually enjoy generous discounts on calls. The
service comes as an added value to customers who are already enjoying some
level of discounts on bouquets like Pulse and Family and Friends.
Wale Goodluck, corporate services executive, MTN said the
introduction of MTN Zone is consistent with the resolve of the company to
provide more value for every kobo spent by customers on the network. He said
this resolve motivated the ongoing nationwide modernization and swapping-out of
the network to provide more capacity and much improved quality of service. The modernisation exercise is nearly half-way
through and is expected to be concluded in a few months.
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