Home Tech News IDC: Improved telecoms service quality seen on the Nigerian horizon

IDC: Improved telecoms service quality seen on the Nigerian horizon

IDC: Improved telecoms service quality seen on the Nigerian horizon
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International Data Corporation (IDC), a global consulting and advisory services firm says the business models employed by mobile network operators (MNO) in Nigeria are undergoing a notable period of evolution that will pave way for service quality improvements.

[blockquote right=”pull-right” cite=”IDC”]So far, MTN, Airtel, and Etisalat Nigeria have all signed some form of outsourcing contract with a telecoms equipment vendor or telecoms infrastructure provider. Etisalat Nigeria has even gone a step further by forming a strategic IT outsourcing partnership with Huawei that will see the Chinese company take over responsibility for the operations and management of Etisalat Nigeria’s IT network. This increasingly popular approach is expected to enable MNOs to focus more on their core business — providing improved customer experience through excellent network service[/blockquote]

IDC reckons that the wave of evolution in the industry was stimulated by the pressing need to optimise or even cut costs on network operations and maintenance fees.

Because of this, MNOs in the country are increasingly scoping outsourcing models in collaboration with third-party infrastructure providers and not deploying and owning their entire network infrastructure themselves.

This quest to sustain profitability is not unique to Nigerian operators, with the trend proving popular globally.

But IDC finds that there are distinct forces at play within the Nigerian market that are making profitability ever more challenging for operators in the country. Legacy voice revenues are steadily declining, competition is forcing down tariffs and in general terms, the average revenue per user (ARPU) is falling and is expected to continue doing so.

To combat this, attention is been diverted to boosting the provision of data services as operators strive to generate extra revenue streams, but such efforts bring with them more capital and operation expenditure requirements for new and improved data network infrastructure.

According to the technology market research company, such costs are already impacting negatively on the profitably of MNOs in the country and generally relate to factors like land acquisition, power generation, security and generator maintenance.

So far, MTN, Airtel, and Etisalat Nigeria have all signed some form of outsourcing contract with a telecoms equipment vendor or telecoms infrastructure provider. Etisalat Nigeria has even gone a step further by forming a strategic IT outsourcing partnership with Huawei that will see the Chinese company take over responsibility for the operations and management of Etisalat Nigeria’s IT network. This increasingly popular approach is expected to enable MNOs to focus more on their core business — providing improved customer experience through excellent network service, IDC said.

“IDC believes the evolution in business models employed by Nigerian MNOs is a step in the right direction,” says Oluwole Babatope a telecommunications and networking research analyst with IDC West Africa. “In the long-term, we expect this trend to lead to a notable improvement in the quality of service on the networks provided by these MNOs.”

According to Babatope, “there will also be a dynamic shift from cost reduction efforts to efficiency enhancements on the part of third-party infrastructure providers. As the market matures, competition will force a need for differentiation among third-party infrastructure providers and this will ultimately lead to an improved value proposition. Finally, as more successful outsourcing case studies emerge, there will be a quest for increased efficiency in terms of capacity management, network planning, and end-to-end performance management. IDC predicts that this will eventually lead to one or two MNOs outsourcing their entire core network infrastructures.”

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Kayode Oladeinde Technology Journalist at Technology Times. Mobile: +234 (0) 7031526929

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