Home Big Story Uncovered: Nigerian telecoms Blietkrig as regulator unbans ‘Big Three’

Uncovered: Nigerian telecoms Blietkrig as regulator unbans ‘Big Three’

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Nigeria’s teeming millions of mobile phone users may expect a fresh round of telecoms battle equivalent of the ‘Blitzkrieg’ among the Big Three mobile phone companies, MTN Nigeria, Airtel Nigeria and Glo mobile, after they cut a deal with the industry regulator to lift trade promotions and new customer additions bans imposed by the watchdog.[blockquote right=”pull-right” cite=”Technology Times Insider”]Hello Etisalat, we have news for you because your moves when the Big Three came under regulatory hammer were not lost on Ikpoki, the CEO of MTN Nigeria who sums the period up thus: “The competitive environment has remained fairly tense. Etisalat in particular because they were the only operator who was unaffected by the NCC decision in March, so obviously they took full advantage of that opportunity and have been going out into the market to do all kind of offers.”[/blockquote]

The World War 2 military tactic “Blitzkrieg” or “lightning war” where the Germans deployed short, fast, powerful attacks against enemy territory and proceeded to dislocate them using speed and surprise may well be underway in the Nigerian telecoms market.

[slideshow_deploy id=’16491′]The Big Three control the biggest telecoms pie in Nigeria as they account for over 100 million active lines split among them as follows: MTN Nigeria, 57,183,745; Airtel Nigeria, 26,194,336 and Glo Mobile, 24,490,650.

Already, MTN Nigeria, owned by South Africa’s MTN Group, sits pretty easy with over 45% market share and a growing suite of voice, data and ancillary services that continue to build new revenue stream on its 57+ million customers.

But the local mobile phone giant is not resting on its success after recent slew of regulatory clampdown by the Nigerian Communications Commission (NCC) against it and other rivals over quality of voice service delivered to their customers.

A few silent horse-trading have so far been negotiated between the regulator on one side and the Big Three on the other side, as they have been left off the hook by the Abuja-headquartered watchdog which last year said it was raising the bar for service quality from January, this year.

NCC made good its threat when it slammed a N647.5million fine on the three operators earlier this year, not without opposition from operators, trade groups and market watchers alike who differ on grounds that sanctions may fail to hold for long because of the operating environment hurdles including rights of way, power, infrastructure vandalisation, among others.

Fast-forward to the lifting of the ban and operators are counting their losses ranging from market share, subscriber numbers and brand  reputation.

Even for the local market giant that accounts for over 57 million active lines and over 45%, MTN admits that “March was a fairly difficult month” but it is looking to turning that around. Its optimism comes from the regulator’s relaxed hardline stance that now allows the Big Three to resume business as usual from April, this year.

“We did 458,000 in Q1. So we did something close to about 150,000 or 180,000 on a monthly basis for January and February. But I think like we said in the statement we are seeing a very positive uptake in Q2 already, so we are turning that around”, Michael Ikpoki, the CEO of MTN Nigeria told investors in South Africa recently according to internal company documents sighted by Technology Times Insider.

Consider Ikpoki’s statement as a reassurance to the South African owners of the lucrative Nigerian telecoms business as the MTN’s internal speak to do all he can to uphold the company’s battle blueprint founded on four key principles: CREP.

For the sake of the uninitiated into the world of Yello, the other moniker for MTN, CREP means Capture, Retain, Entice and Protect, forming the four pillars that have driven its successful market capture in its Nigerian cash cow, which every CEO and his team must try to sustain.

Ikpoki returned last year to head the Nigerian operations after a successful sojourn as CEO of Ghana, a relatively smaller operation within the MTN Group but one that shares similarity in terms of policy, market trends and sometimes regulatory enforcement with its West African sister, Nigeria.

No matter the way you look at it, MTN Nigeria still sit relatively easy in the battle for market stakes and its focus could be on consolidating customer retention while leaving Etisalat Nigeria, the latest entrant among the Big Four, to continue to capture the youth market and other new entrant subscribers into the mobile ecosystem.

Etisalat plays its last mover advantage very well and has ploughed deeply into that space in a corporate strategy that obviously heeds the advice of Hakeem Belo-Osagie, the company’s Chairman. Belo-Osagie is practical enough to admit that MTN Nigeria can no longer be beaten in Nigeria, considering the huge market gap!

Etisalat, the only one that was not caught up in the last clampdown by NCC also played that to its advantage, according to its rival, MTN Nigeria.

Hello Etisalat, we have news for you because your moves when the Big Three came under regulatory hammer were not lost on Ikpoki, the CEO of MTN Nigeria who sums the period up thus: “The competitive environment has remained fairly tense. Etisalat in particular because they were the only operator who was unaffected by the NCC decision in March, so obviously they took full advantage of that opportunity and have been going out into the market to do all kind of offers.”

But that may be lost on Sunil Bharti Mittal, the billionaire and owner of Airtel, the Indian mobile phone giant that owns Airtel Nigeria, who in the wake of closing the March 2010 deal to purchase Zain African operations has promised to come after the MTN Group through the flanks of the Nigerian telecoms battlefield.

“General” Sunil’s Airtel recently clinked glasses after his local troops regained the market’s number 2 position by subscribers that had previously lost to Glo Mobile, the mobile phone subsidiary of Nigeria’s Second National Operator, Globacom, owned by Mike Adenuga Jr.

Mittal, who was in Nigeria last week for the World Economic Forum on Africa held in Abuja, may have whispered to Segun Ogunsanya, the CEO of Airtel Nigeria not to slow down their Nigeria advance against “Phuthuma Nhleko’s company.”

Sunil is still fixated on Nhleko, the then Group CEO of MTN Group when the Indian billionaire pushed an ambitious but botched plan to close an M&A deal with the South African telephony giant. It was after he dumped the South African plan that his Bharti Airtel opted for the Kuwaiti-based Zain and bought its African operations to gain a much-desired footprint on the continent and more importantly Nigeria.

If we may hazard a guess of the unfolding battle for market stakes, the imminent World Cup 2014 in Brazil, which begin Thursday, June 12 and ends on Sunday, July 13, will cash in on the local passion for the game of soccer. The games appear to be another avenue that mobile phone companies will milk to the hilt and offer the lowest hanging fruit in the Nigerian telecoms ground battle.

More than any of the quartet, the battle will be straight between Airtel Nigeria and Glo Mobile, as the former moves to widen its coveted number 2 gap and the latter moves to regain its lost place in a market where it strikes local passion as a “Nigerian company.”

Mittal may want to be reminded that his local rival, Adenuga, is also a bullish one for a man known to see business, like every other human endeavour, as a military operation.

“Essentially running a business is similar to leading a military operation or orchestrating a political campaign, or performing as a great athlete. The fundamental principles are the same. The over-riding objective is to out-manoeuvre the opposing forces; to outsmart the other party; to outperform the competition; to outwit the other guy-to achieve. This may sound harsh. But that’s the way it is”, Adenuga is popularly quoted to have said.

No doubt, the ongoing Q2 telecoms battle will be fought on water, land and in the air to safeguard each competitor’s share of the lucrative Nigerian airtime business.

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