BEFORE the advent of GSM in 2001, phone penetration was low to the point of being negligible. Nigeria Telecommunication, NITEL, the national carrier had enjoyed a monopoly of the Nigeria mobile telephony providing just 40,000 connected lines to subscribers nationwide.
All that changed with the establishment of the sector’s independent regulator, the Nigeria Communications Commission (NCC) in 1999 which brought about the licensing of Econet now Airtel, MTN and later the entry of Glo and Etisalat now 9mobile into the industry.
In recent years, there have been a great increase in the level of competition in virtually all areas of business and that of telecommunication is not an exception. The ability to outperform competitors and to achieve above average profits lies in the pursuit and execution of appropriate business strategy.
Also the deregulation of the industry led to the increase in the number of providers of the telecommunication services and of the number of subscribers or customers. These led to competition between the providers as each of them pursues strategies that are directed to enable them to have their own share of the market in order to be profitable and to survive.
The SIM registration regulation passed by National Assembly and the number portability planned for later in the years has significantly increased competition as it eases customer’s flight to quality service without the inconvenience of losing their number.
The competitive intensity has resulted in significant drop in cost of services and a corresponding drop in average revenue per user, a key indicator of market profitability even as the customer base has grown dramatically.
However, competition and regulatory measures are bringing down prices even as they continue to invest in the Nigerian market.
Even with this, the Industry has continued to grow with the introduction of compulsory SIM registration. By liberalizing the licensing scheme, NCC has made it easy for new fixed-wireless operators to enter the market even as it continues to keenly invest to achieve widespread connectivity.
Also, the influence of globalisation in telecommunication companies has greatly increased the level of competition in the industry and they are forced to be competitive in order to survive.
Different types of strategies are therefore put in place to be profitable and competitive. All these strategies are directed to attract, retain and maintain customers for continuous profitability.
At first all that was needed for marketing success was availability but that has since changed, the landscape is becoming more competitive and the growth rates of previous years are becoming hard to replicate in a nutshell. However, continued success in the contemporary Nigeria GSM market calls for market wizardry.
Despite the figure being approved by NCC, the Nigerian telecom market is reaching saturation point. Most of the new lines being activated are purchased by people who already owned one or more. An additional phone line does not however translate to increase airtime usage. In fact, the reverse is the case hence the need for each provider to device and sustains rigorously, strategies that would help it to survive in the turbulent telephony market.
Role of Nigerian Communications Commission, (NCC)
The Nigerian Communication Commission is the independent National Regulatory Authority for the telecommunications industry in Nigeria. The Commission is responsible for creating an enabling environment for competition among operators in the industry as well as ensuring the provision of qualitative and efficient services throughout the country.
In order to achieve its mandate, the Commission has put in place the necessary licensing and regulatory framework for the supply of telecommunications services.
The NCC was charged with the responsibility of regulating the supply of telecommunications services and facilities, enforcing the laws, promoting competition, were setting performance standards for telephone services in Nigeria.
The Commission’s functions also include, the protection and promotion of the interest of consumers against unfair practices including but not limited to matters relating to tariffs and charges for and availability and quality of communication services, equipment and facilities, and promoting competition.
It also facilitates investments in and entry into the Nigerian market for provision and supply of communication services, equipment and facilities, fixing and collecting fees, approves communication licences and other regulatory services provided by the commission and prevent, restrict or distort competition in connection and SIM control.
The control of the body had helped one way or the other to protect the interest of consumers in the country especially on the issue of false advertisements, security purposes which led to compulsory SIM registration where subscribers had to register with their Bank Verification Number, thumb printing and that has, to an extent, helped to curtail security challenges in the country.
Also, the Nigerian Communications Commission, NCC regularly conducts studies and surveys and produces reports on the telecommunications industry and stakeholder information, statistics and reports, technology data as well as internet service.
In the year 2018, Nigeria’s telecommunications sector ended with 172 million subscribers with teledensity rising to 123.4% from 105% in January 2018. Telephone density is the number of telephone connections for every hundred individuals living within an area.
But according to recent statistics by NCC, subscribers had risen to 173 million with teledensity as at April, 2019 is 90.97% as against the 123.4% in December, 2018.
According to a statement by the Council, teledensity did not drop as was believed by subscribers, but it was calculated based on a population estimate of 190 million up from the 140 million used in calculating till February this year.
However, to have a share of the over 170 million subscribers is determined by how the brand is perceived by the customer, how customer friendly the brand is in terms of tariff as well as technical development for better service.
Though tariff plan varies from one network to the other and how best the network can be generous with it or have different plans that suit each customer, determine the number of customer they get.
This also determines subscriber’s decision “to port” among network providers. In fact because of the issue of porting, the providers are struggling to get the highest number of subscribers.
May, 16, 2001, MTN became the first GSM network to make a call following the Nigerian GSM auction conducted by Nigeria Communications Commission (NCC). Thereafter the company launched full commercial operations beginning with Lagos, Abuja and Port Harcourt.
Since launching in August 2001, MTN has steadily deployed its services across Nigeria. It now provides services in 223 cities and towns more than 10,000 villages and communities and a growing number of highways across the country, spanning the 36 states and the Federal Capital Territory, Abuja. It is the undisputed market leader in coverage, revenue and subscriber base. This may be due to MTN’s marketing savvy.
Effective differentiation and positioning are the biggest determinants of marketing success and MTN is a master of the craft exemplified by its product and service actually owning values, real and perceived rational and emotional in the consumer’s minds. And their possession of these values and meaning in the consumer’s minds has enabled them to successfully differentiate themselves.
Coverage: That was the original competitive advantage of MTN in the early years of GSM in Nigeria, while its main competitor-Airtel (then Econet) was mired in a management crisis. MTN was building capacity and adding town after town under its coverage than its competitors, MTN quickly reflected this in its positioning statement-changing its tagline from “Best connection” to “Everywhere you go.
It then followed logically that if you want to be able to use your phone wherever you may be in the country, you had only one choice, get connected to MTN.
This message is subtly embedded in the company communication message. It is really doubtful whether MTN has more quality network than its competitors, but that is not the issue. The issue is that MTN was smart enough to take advantage of an unexploited positioning opportunity. The result is that MTN owns the word reliability in the customer mind.
Leadership: this is largely a quantitative issue. With over 40% of the market, the market leadership position is acquired and coupled with its association with coverage and reliability. MTN leadership is unquestionable. Decreased price sensitivity, MTN charges are about the highest in the market, yet the company still adds more new subscribers than its competitors year after year. This is just one of the benefits MTN is enjoying from its supremely high brand equity.
Airtel’s parent company, Bharti Airtel Limited is a leading global telecommunications company with operations in 16 countries across Asia and Africa.
On August 5, 2001, Airtel became the first telecoms operator to launch commercial GSM services in Nigeria. In its first two years of operation in Nigeria, the company was running neck to neck with MTN for the leadership position in the industry. But a deluge management crisis led to its loss of momentum. This situation was further compounded by the perennial identity change of Airtel-five times in the last couple of years. Econet, Vmobile, Celtel, Zain and Airtel.
All these factors make the job of managing the brand a challenging one. Unfortunately, the company’s marketing has been average at best.
Even with this, Airtel Networks Limited headquartered in Lagos still ranks amongst the top four mobile service providers in terms of subscribers with a customer base of more than 39.8 million. The company’s product offerings include 2G, 3G and 4G wireless, mobile commerce and enterprises services.
Airtel has network presence in all states of the federation, local government areas, major towns and villages in Nigeria. The company mobile networks cover over 70% of Nigeria’s population and with the slogan “Smart phone network” Airtel is still doing more to increase its subscribers across the country.
Globacom Limited is a Nigerian multinational telecommunications company founded on 29, August, 2003 by Chief Mike Adenuga. If there is any company whose entry into the Nigeria telecom industry was greeted with great anticipation and expectation by the public, it was Glo.
This was due to the huge publicity that accompanied the story of how the company won, lost and fought to win again the operating license from NCC. The company came at a time Nigerians were becoming increasingly disgruntled by the high cost of GSM service.
And Glo in line with their slogan then, “Glo with Pride” did not disappoint Nigerians. It won wide market acceptance and goodwill by launching its service per seconds billing. It also priced its SIM cards cheaper than what was available in the market thereby ensuring that more people had access to its service and it paid off.
Despite being a late entrant into the market, Glo captured a large chunk of the Nigeria GSM market. Unfortunately the company marketing needs to be more creative because effective marketing involves much more than over priced adverts and flashy celebrity display. If there is any marketing practice Glo is known for, it is her unprecedented use of celebrity endorsement. Now with its slogan “Unlimited”, Glo is still trying to capture the market through more promotions.
9MOBILE (FORMERLY ETISALAT):
Started commercial operation in Nigeria in March, 2008, had Etisalat entered the Nigeria telecoms market earlier, it probably would have attained market leadership by now. The reason for this is not farfetched. Etisalat is simply the most creative marketer in the Nigeria telecoms industry.
Now 9mobile, its market strategy is the most well thought out, first-the company recognised it was coming into a developed market which means it would have to gain customers from existing providers.
And to overcome this task, 9mobile started by first identify the reason people find it difficult to change their GSM service provider even when they are dissatisfied with the service they are getting-which means changing provider will mean changing phone number.
9mobile addressed this by asking people to choose any phone number they want. What they need to do was to choose numbers that are similar to their existing numbers. As a result, Etisalat gained hundreds of thousands of subscribers even before it launched its services and Etisalat’s subsequent marketing has equally been brilliant.
With the new name, the company had moved from “9ja let’s talk” and adopted the slogan “ig9ting the evolution.”
On promotion, 9mobile has become the trendsetter in the industry as far as customer-engaging sales promotion is concerned. In fact, some of the competitors now seem to be copying the 9mobile promotion strategy.
Despite the different promotions and adverts by these telecommunications companies and with all of them making use of celebrities as brand ambassadors, the competition among them continues in order to gain more subscribers and to continue to strive in the market.
But as at April, 2019, MTN is still leading the market share among the brands as well as number of internet subscribers (NCC data).
Even with different strategies to survive in the competitive market, each brand still has different challenges they need to grabble with. These include poor network which is the key complaint of most subscribers, drop calls, billings, poor connections among others,
Though, subscriber’s reason for choosing a brand has to do with certain factors and how the brand was able to convince them, “Porting” from one network provider to the other is also a matter of choice and due to this, service providers loose customers every day, according to NCC statistics.
Subscriber/ Operator Data
Percentage Market Share by Operator (April 2019)
|Service Provider||No. of subscribers||Percentage (%)|
Internet Subscriber Data (April 2019)
|Service Provider||No of internet subscriber|
“Porting” Activities of Mobile Network Operators
Porting activities is the number of transactions whereby a mobile is transferred from one service provider to another on the request of a subscriber who wishes to change service provider while keeping the telephone number.
Incoming (inward) porting is the number of subscribers ported from another service provider’s network into a service provider’s own network.
Telecommunications operators in the country are today still battling to survive due to some economic policies been implemented by the government. The situation has forced some of them to rationalize staffs.
However the major challenge facing the sector is epileptic power supply. The power situation is one of the problems of telecom in Nigeria, a well known hindrance that has continued to slow the growth of the industry in Nigeria.
Operators run on power and alternative power supply sources such as inverter and solar technologies, power generating sets which are very expensive to set up and maintain. It is of common knowledge that telecom masts used by service providers are permanently run by diesel-powered generators and this further increases the running cost of these companies.
The effect is that Nigerians have had to pay more than citizens of other countries where their power supply is reliable and constant to enjoy these same services.
Also, multiple taxations that telecom providers had always complained is another challenge hindering the telecoms industry from developing. However, one of the clear objectives of the National Tax Policy, NTD, is the elimination of multiple taxations in all forms in which it manifests within the Nigerian economy. Though the challenge of multiple taxations is not limited to the telecommunications sector, the degree of exposure is high.
Others include, low customer purchasing power, currency movement, loss of global investors, heavy levies on ICT, lack of infrastructural support by government, slow technological development, scarcity of forex, poor data and calls connections.
The sector over the years has contributed immensely to Nigeria’s economy as well as the lives and livelihood of Nigerians. The advancement of mobile usage from basic phone telephony to new enhanced services and introduction of new technology within diverse sectors of the country, have seen the sector grow massively.
The sector has experienced rapid growth and helps in all industries in the country especially in the banking sector which has made banking services easier as well as bank mobile app. The growth in this sector has also enhanced the cashless policy, the implementation of which has been made possible through the seamless network of the telecommunication companies. These days through the networks cash movement and transfers have become more effective and easier.
With the advancement in IT, Nigerians now make use of all available means of communication via video, imaging, sms and all possible signals as are available and necessary to stimulate any economy.
According to NCC statistics, the percentage grew from 9.16% in 2017 to 9.85% in 2018 and now to 10.11% in 2019.
In the area of education, it has made learning in schools easier and most especially the access to E-Learning platforms to Nigerians. In the area of other segments of the economy, communications has become easier between investors and major stakeholders of the economy.
The service of the telecommunications companies is not limited to the country and the extent to which subscribers can connect from outside the country is an added advantage to the providers. That is why they are trying to outshine one another so that through this package they can get more customers.
Airtel Roam and Home Bundle is a product that allows subscribers to roam at a discounted rate on selected networks in 27 countries and the remaining bundle balance can be used when the roamer is back in Nigeria. According to the bundle, a subscriber gets 100 minutes free of incoming calls while roaming and home destination.
Airtel also has a special international package for prepaid and post paid subscribers which offer up to 70% discount for calls to UK fixed lines, US, Canada, India and China. With any of these, subscribers can call these five destinations at discounted rates.
For MTN, customer using either a prepaid or post paid line, the phone is already set up to be used abroad. Roaming service is available by default on the subscriber’s MTN line.
MTN has partnered with various networks in many countries to offer international roaming and the list is ever-growing, there is no monthly fee, no connection fee and no deposit required before you can roam. However, the cost for making and receiving voice calls or sending SMS while roaming abroad depends on the country the person is visiting.
Glo has international roaming agreements with GSM operators in most popular international destinations. It allows you to use your mobile phone and number when you travel abroad. The service will only work in countries with which Glo has roaming connectivity.
The list of countries is growing on a daily basis allowing the subscriber the convenience of using their Glo mobile number in over 437 networks in 180 countries worldwide.
9mobile also does roaming for its subscribers and cost varies from Nigeria to the rest of the world using 9moblie SIM but the calling rates are subject to change without notice.
Why Subscribers choose Brand?
A positive relationship between product quality and consumer is a major determinant of customer loyalty in the telecommunication market and this is receiving great deal of attention in the telecom sector. Mobile phone network market, service quality is considered as most important factor of brand loyalty.
The situation places a responsibility on mobile telecommunication companies not only to promote their products but the need for hardcore customer loyalty even in an environment with high quality. However, what makes customers loyal to their brand is the question companies should continue to ask themselves.
Choosing a network among the four major telecoms in the country depends on how it can serve the partnership purpose for which they want to use it.
It is a common knowledge that some even owned three different lines for different purposes. Some choose a particular network because the data is active; some because of active coverage when calling while some because the brand was able to convince them through their promotions which most of time was because of the free airtime whenever they recharge.
For Abidemi Olorunyomi, choosing Airtel for her data services is the best so far. She believes any other network cannot do it better in terms of coverage and billings. While another subscriber, Oluwatoyin Sanni uses Glo because of the bonus whenever she recharges.
For Mr. Olumide Akano, it is because of the bonus, that is why he uses Airtel, “at least every time I recharge I get 400 percent more to make voice calls to all networks as well as text messages.”
Mr. Ibrahim Abiodun on his part chose Airtel because of its data bundle which according to him is the cheapest among the networks. “My two lines are Airtel and I started using the first when I was in school. To me Airtel is the best among the major networks, the billings, network connection and data is the best.”
Mr. Chika Onuorha is one of the subscribers that use more than one SIM but unlike Mr. Abiodun he uses two different GSM providers for his daily activities. He told BV that he got 9mobile for data and MTN for calls. “Yes my two SIM has different purposes, I use 9mobile for my data because their bundle is cheap and the network is very good.
He added that, though his MTN line is as old as when GSM started in the country, he only uses it for calls because the connectivity is good and of cause because of the bonus they give to him every time he recharged.
Mrs Faizat Adam best choice is Airtel. “I don’t think I can use any other network.” She told BV that she had tried once to get a second line but was not satisfied with the service provider that was why she only uses Airtel network.
Another subscriber, Olayiwola Nurudeen told BV that Glo is the best among the network providers. “I have been using the network for years both for calls and data. To me, it is the best because its billing is cheap compared to other networks. And in terms of connectivity Glo is very good.”