Having launched its service at the end of 2008, the late-entrant operator EMTS (Etisalat Nigeria) is rapidly gaining ground in the Nigerian market. With eight million subscribers and on target to hit ten million on its third anniversary, the operator, which has just launched its 3G network, is gearing up for the battle over mobile broadband.
When Etisalat Nigeria entered the Nigerian market some seven years after the first operator, few would have given it much of a chance. Instead, the currently fourth-placed operator has steadily gained market share since its entry in 2008 on the back of innovative products and a youthful-yet-quality image. CEO Steven Evans tells WinWin that with the next big battle looming over mobile broadband, Etisalat is doing all it can to make sure it emerges as “an operator that Nigerians are proud of.”
WinWin: You have more than 20 years of experience in the telecom industry, having worked with operators like Bouygues in France and Optus in Australia. How would you describe the challenges of operating in Nigeria, compared to these other markets?
Evans: There are a number of challenges. One is that there is a lack of well developed infrastructure, particularly power and transport. In practice, what this means for Etisalat Nigeria is that every single cell site of EMTS has to have two diesel generators, operating in tandem for 12 hours each. These have to be regularly and reliably supplied with diesel. The impact of the additional costs for power, transportation, diesel and the associated security on every site is significant and drives up the operational cost of the business.
Then, there is the problem of finding local talent for key positions. You have to remember that the Nigerian mobile industry only started in 2002-2003, so it’s less than 10 years old. So if you want to find someone with 15-20 years of experience, you’re going to have to look among Nigerians who’ve been working overseas. Our Director of Engineering was working in Hong Kong for one of the operators there and we were fortunate to be able to convince him to come home.
WinWin: Are you exploring any alternative sources of power?
Evans: We’re doing a lot of work with Huawei on what’s called hybrid power. This involves sophisticated batteries that can help you store sufficient energy, so that you need to run the generator for only a few hours a day, instead of 24 hours. In terms of true alternative energy, we are investigating the potential of solar power, and also wind power, particularly in the northern part of the country, which tends to have fairly consistent winds, and lots of sunshine. We are planning to pilot perhaps five or six solutions over the coming 12 months.
A four-pillar strategy
WinWin: Etisalat Nigeria came into the market two years ago, some seven years after the first operator. How would you describe your strategy to make up lost ground?
Evans: Our strategy has four pillars to it. The first one, which is of paramount importance, is the quality of the network. We’ve decided that we want to be – and want to stay – No. 1 when it comes to quality of network. Very recently, we did a whole series of drive tests across some 60 or so of the cities in Nigeria, and we came out No. 1 in quality of network in more than 50 of those cities.
To support this, we are also introducing innovative products and services, which we think the customers will appreciate, and that is the second pillar. The third area is customer service; we have very good customer care centers, and also very good retail shops with knowledgeable and well-trained staff.
Compared to the first three pillars, which are outward-facing, so to speak, the fourth pillar is inward-facing. It is about operational efficiency, making sure we keep our operating costs down, so that we can be an efficient organization with the flexibility to offer good value to our customers.
WinWin: Can you give us a few examples of innovative products and services that you have introduced?
Evans: One of these is a “home zone” product, which allows customers to choose their office or home or another location as their “home zone.” Calls made from this zone, whether they were on our network, or on another network, are priced at a lower rate. Now the home zone feature is not new from a global perspective – it has been used in a number of different markets – but we were the first to bring it to Nigeria.
Also, there are some other things like reverse charge calling, which we introduced in this market. This is especially popular among young people, who at times have no credit on their phones, but would like to call home. It allows them to transfer the charge of the call to the called party’s account.
Another thing that we have introduced, and that people value a lot, is missed call notification. It’s a text message that lets you know if someone called you while you were away or on another call. Again, it’s a product that Etisalat is the only operator to make available.
Since we are a late entrant, one of our strategies has been to offer pricing that is the same, regardless of whether calls are made to our network or to another operator’s network. When you come into the market, and start with a small customer base initially, you need to reassure people who try Etisalat that when they make calls to another mobile phone, they don’t have to worry about whether it’s an MTN phone or an Airtel phone. So we have also been the pioneers of the concept of on-net and off-net pricing being the same.
WinWin: With mobile voice reaching maturity, the next area for growth in the Nigerian market is mobile data. How important is it to EMTS’ strategy?
Evans: We’re prioritizing it very heavily, as we think there is an incredible pent-up demand for data services. One reason is that because of the lack of infrastructure, there is effectively no fixed network in Nigeria. Mobile broadband will be the first and only way to access the Internet for the vast majority of Nigerians, as only a relatively small number of large corporate organizations can afford to have fiber delivered to the building.
Another reason is that Nigeria is a very young market. About 44% of the population of Nigeria is less than 15 years old, and the median age of the population is 19. In addition, there is a very big university population that uses laptops extensively. They are very aware of the Internet, very aware of the advantages of the various social sites such as Facebook, so they’re also looking to have access to data services. The challenge is now for the mobile operators, particularly the GSM operators, to build the radio infrastructure and the backbone infrastructure in Nigeria to deliver mobile broadband.
WinWin: What are you doing to facilitate the growth of mobile data, particularly mobile broadband usage, in Nigeria?
Evans: One of the products we have introduced in the market is Easy Cliq. Easy Cliq is a voice-and-data package that tells the customer, “Look, if you’re interested in browsing the Internet, there’s a certain amount of free data that comes with this product.” The package has been very popular.
As a late entrant, EMTS has placed mobile data at the forefront of its strategy. When we first rolled out our 2G network, we deployed EDGE on all of the cell sites, even the most rural cell sites out in the northeast and the northwest of the country. This meant we could offer data services right from Day 1. We were the only operator with data services everywhere on our network. Having recently acquired a 3G license, we are now working with Huawei to roll out our 3G network quickly. When we launch it in the first half of 2011, people will find that 3G really does deliver a materially improved data experience.
The road ahead
WinWin: How would you describe Etisalat Nigeria’s goals over the next few years?
Evans: We’ve been growing at the rate of 400,000 net additions a month. What we like to do is lead with exciting and interesting promotions, which attract people to come and try us, and then we rely on the quality of the network to build a good reputation among our customers. Over time, we want to make Etisalat their preferred network, not their secondary one.
Overall, we are determined to be one of the two top operators in Nigeria, and we are also keen to take a leadership position in data services, because we think that that’s very much a green field.
Etisalat Group, which is our largest shareholder, is very strong in terms of its technology adoption and desires to be a leader in mobile broadband, and we feel we have every opportunity of leveraging some of the strength of the group, in terms of rolling out data services and mobile broadband services to our customers. We believe we can consolidate our reputation as a quality operator that offers high-speed mobile broadband to the market. I think we will have a blue-chip reputation among Nigerians and I hope that we will become an operator that Nigerians are proud of.