How Not To Run A Telco – An Autopsy Of ZoomMobile Brand
Coming on the heels of such other crashed telcos like Mobitel, Intercellular and Multilinks, the demise of ZoomMobile, formerly known as Reliance Telecommunications or RelTel, didn’t come to the industry as a huge surprise. Exactly in 1999, the then young and vibrant telco came into the market that was then dominated by the likes of Intercellular, Multilinks, Mobitel and EMIS, with eye-catching services hitherto unknown in the high-cost and high-end telecom market of that era.
With the able and dynamic leadership of Mr. Bekele Tadesse (the Ethiopian telecoms expert that is now the country manager of back-haul solution provider – Ceragon), and a smattering of other sales egg-heads from Starcomms including the sales genius called Rakesh Kaul, Reltel practically took the market by storm in the limited mobility and fixed wireless scene. Some the innovations brought into the market by the company included value-added services like voicemail, sms and call barring, even automated IVR and recharge platform…all of which were unheard of in the industry then.
With the coming of the GSM platform in 2001, stakeholders in the sector already knew that the business practice of majority of the players in the sector at that time, coupled with the restrictions and advantages given to the newly licensed GSM operators, that the fate of the private telecom operators – PTOs (as they were then known) were all but sealed. Relying more on huge margins and limited penetration, the PTOs of yore were no match for the aggressive GSM operators. One by one the death knell began to sound for most of them. Though most watchers had attributed the collapse of the PTOs to all manner of reasons, there are also some reasons beyond what is commonly touted by most people.
A certain commentator listed the reasons below:
1. CDMA Operators were mostly small players with limited reach
2. Initial business model was small reach and high margins, resulting in expensive products and services
3. Infrastructure problems – lack of power supply, high taxes, etc
4. The latest mobile phones and devices are mostly available on GSM networks, while CDMA operators largely sold outdated gear
5. The flexibility that being able to swap SIMs between GSM devices offered was largely unavailable to CDMA users
6. CDMA devices often were more expensive than equivalent GSM devices
Generally these reasons are acceptable as the major reasons why early PTOs that used CDMA took the dive. But the other reasons which most people are silent about actually separates the dead PTOs from the living ones at the moment. This is an account of what made ZoomMobile aka Reltel bite the dust.
In 2007, after a protracted leadership tussle with the unceremonious exit of Bekele Tadesse, the news around town was that Reltel was shopping for core investors to help bring the glory days back to the Iganmu-based telco. After appointing Mr Kenneth Aigbinode to head the company, the chairman and owner of the company a former Senator of the Federal Republic of Nigeria, Annie Okonkwo was also quoted as saying that Reltel will list on the Nigerian Stock Exchange after going through a private placement the following year.
According to media reports attributed to Okonkwo and Aigbinode, the company would not go the way of other CDMA operators that have been acquired by some core investors. “It is not time yet to sell out to core investors. We want Nigerians first to be part of the good things happening in the telecom sector. Later, core investors can come in”, he said. He promised that the private placement this time round would not be like the previous experience as 100 per cent of the funds realized through it would be invested in the network. Sure enough there was a private placement and funding was realized, though the identity of the investors was always shrouded in secrecy.
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