My 2018 Playbook for Nigerian Telcos

The year 2017 could not have gone so quickly in the Nigerian telecommunication sector. Largely, it was not a dance party for many of them. Despite the official declaration that Nigeria was out of recession, it was not yet uhuru for the telcos. As MTN continues to pay down its fines (over regulatory compliance issues on SIM card registration), Etisalat Nigeria lost its major investor and became 9Mobile. The regular noise from India was not very encouraging for Airtel which has seen its African businesses under high-voltage shock as pockets of its business in some markets continue to lose money. Glo kept its standard of largely sub-par service delivery intact.

Yet, they overcame and 2018 is here. The push to 30% broadband penetration in Nigeria continues. Here are some simple things they could do in the industry to make this 2018 better.

Cross-platform Development: This is the only way they can grow and expand the pile. From deepening and supporting services in finance, agriculture, logistics, among others, telcos have to band together to do better. The win-win model must be part of the collective strategy and the concept of co-opetition (cooperating even when competing) must be in their hearts. Imagine if the telcos come together to build a blockchain infrastructure to power Nigeria’s commerce and industry in this emerging area.

Telecom Committee: The leading telcos (possibly would become three if 9Mobile goes) must work hard to form a stronger lobby group. What they are facing at state levels with rights of way and multiple taxations cannot be solved individually. Besides Association of Telecommunications Operators of Nigeria (ATCON), I expect MTN, Glo, 9Mobile and Airtel to have another lobby group with capacity to exert real influence in the states. A good playbook to copy is the Bankers Committee. The Telecom Committee must be innovative in battles it takes with regulators so that it does not alienate customers. Yet, it needs to win some key ones it needs. The regulator, Nigerian Communication Commission (NCC), should be seen as a regulator and an ally since without them, NCC itself will fail. Playing that ally card could help them to get some critical supports they need to thrive.

Diversify into New Sectors: Agriculture will be huge as Buhari Administration is focusing on it. I know the data we have consumed in farms as we work on Zenvus in northern Nigeria. The telcos must invest in new markets because the typical big-markets may actually be loss-making. They continue to push promos to customers with multiple SIM cards. Yes, Nigerians wait for the telco with the best promo and switch to a new one afterward. Once that one ends, they switch to the next promo in line, cascading race to the bottom. But in agriculture, farmers are business-people and are focusing on bringing IT into agriculture. The Telecom Committee has a strategic role to assist because in that redesign agriculture will be a growth sector. This diversification goes beyond agriculture to other areas like education and health.

Leading telcos in Nigeria (source: latest solution)

Mobile Virtual Network Operator (MVNO): Though NCC will likely decide if telcos have the capacity to anchor MNVOs, it may be time for the telcos to explore how they could sell services in bulk to MVNOs. MNVOs will provide cashflow to invest in innovation and growth. This is one of the biggest telecom businesses in U.S. where companies like AT&T and Verizon have MVNOs that differentiate with services even when relying on infrastructure provided by telcos like AT&T. Yet, this may not be an absolute decision of the telcos to make as NCC will surely like to run the show as typical in Nigerian regulation. The Telecom Committee may consider pushing for MNVOs if they feel confident they have excess capacity to sell. MVNOs will help them reach some cities which the telcos are not interested since MVNOs are usually not nationwide brands: they are assigned areas they can do business. And usually, they win with customer service.

4G Deployment: The telcos have promised 4G but are yet to deliver in practical forms. They need to get the 4G services to in the nation. The fact is this: without broadband, Nigeria will stall in the advancement we expect in AI and other emerging technologies areas like IoT (internet of things). Now is the time to make this 4G happen at scale. Without affordable 4G, some emerging services in security, education and health would stall. So, it is very strategic to deploy 4G – Nigerians are waiting.

Innovation on Data: The business is about data right now. But data will not make telcos improve their revenues if the data is not “transformed”. I do think they need to innovate on the data they have. That innovation on data will provide the path to building platforms. There are many things they could do. I noted one in the Forum today. Besides, home automation, home security and energy management would benefit on this data innovation. The telcos can drive some of these areas through strategic partnerships.

OEM-Focused Partnership: The telcos in Nigeria have focused on gaming, quizzes and the typical things you see being promoted via SMS. Those things are leisure. And they are okay. But for the telcos to see new growth, they have to invest and partner with OEMs that make physical things which need Internet to work at scale. Think of companies like Nest (the Nigerian version), Ring (security) and more. They need to push investments in those areas because they could sell more data if those succeed.

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