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Etisalat: 15 Months of a Smoking Gun
- By Ikem Okuhu
- Published Monday 15th 2010
- BrandWorld
- Unrated
NOT many people gave Etisalat a chance to strike gold so quickly in the Nigerian market when it launched operations - late 2008. The market looked too crowded for a late entrant. The brands playing in the field have been around for eight years - enough time for them to be such strong household names that space would just not be there (and where they exist, not large enough) in people’s minds for any upstart no matter how fat the budget.
When six months ago, the company announced that it had amassed one million subscribers, nine months after entering the market, cynicism greeted the news, with many dismissing it as mere PR stunts. In a market replete with false claims of market share, one would not blame those that took this news with a pinch of salt.
But the news refused to end there. Fifteen months after entering the Nigerian market, Etisalat came out with another market-shaking news – that it is looking at attracting between 2.4 million and four million subscribers by the end of 2010. And the war chest appears significantly huge. But the telecom market, as capital intensive as it is in Nigeria, is not all about having a staggering budget to play with. Applying resources with the properly balanced strategic mix that attracts and wins subscribers is the highway that is not travelled by faint-hearted players.
The question that hangs on the lips of many is: How was Etisalat able to find such huge subscriber-base and brand distinction at such a short time in a market where nearly all the people that should own mobile phones were already owners of one or two (sometimes more) active mobile handsets? When the company celebrated its one million subscriber-base, CEO of the company, Steven Evans acknowledged Etisalat’s quick acceptance.
“The swift and steady growth in our subscriber numbers is an evidence of the acceptance we have enjoyed from our customers and the superior service quality we offer. We are delighted to have hit such a figure under a year of commercial operations despite our position as the fifth entrant into the dynamic Nigerian telecoms market.
By the time Evans was saying this, statistics indicated that the company was very far below the ladder in terms of market share. Then MTN had over 27 million subscribers, owning 40.23 per cent of the total telecommunications market; Glo, 5.9 million subscribers or 23.44 per cent of the market, Zain, 14.6 million (21.59 per cent of the market) and Etisalat, over 1 million subscribers or 1.54 per cent of the market share. If Etisalat is able to accomplish its four million subscriber target by the end of 2010, that would be a trend-setting 300 percent growth. Tend setting because although the country has a potential mobile phone market of over 100 million, the company would be doing this in the face of challenges that previous entrants did not have to confront with.
When Glo entered the market in 2004, it had to fight its own fight. Then three brands, MTN, Econet (V-Mobile) and Mtel were holding sway. To distinguish itself, Glo emphasised its “Nigerianess” by reinforcing its indigenous ownership. The company also found space in the billing system of the period. At a time Nigerians were crying against the per minute billing system that operators were too unwilling to change, Glo stormed the market challenging Nigerians to reject the per minute billing as charged by existing operators. Needless to say that this marked a turning point in the Nigerian telecom market as other players soon adjusted. Glo rode on the goodwill from this for a long time and owes its quick acceptance partly to this entry strategy.
But if someone had used the “proudly Nigerian” platform and the anti-per-minute billing to ride into the market, what else is left for a new entrant to play with? How can any other player drop anchor in a crowded bay of champion ships with champion sailors?
When Etisalat berthed in the Nigerian market, a revolution was taking place in the Nigerian entertainment industry. Youths were increasingly finding expression in music. The music industry was reaching an attractive high, spurning a local variant of hip-hop with all the lingos, jingos and slangs. In the midst of the challenges facing Nigeria as a nation, a unique “proudly Nigerian” spirit was growing very rapidly.
For this generation of youths, Nigeria was “9ja.” So what did Etisalat do? The first got their network code of 0809 and then coincidentally found a young Nigerian musician who can connect with the “streets” with his music as he could connect with the top echelon with his intellect and accent, to do a television commercial playing on the “9ja” lingo.
Till date, Banky W’s “‘0809ja’ for life” commercial is one of the most memorable campaigns and it went on to be an integral component of every other media advertising by this young company.
What Banky’s voice did for Etisalat was that it provided a magic carpet that transported the company into the minds of Nigeria’s hip-hop generation which statistics have shown constitute over 60 percent of the population. And it is this segment that actually spends money (and time) on telephones and would spend several minutes just to say “hi” to the guy at the other end. And then followed the “0809-u-choose promo. Although existing operators were offering this service, which allowed a subscriber to have his phone number configured to “rhyme” with his/her name on the phone key pad (not qwerty phones though), Etisalat positioned itself as the first to make a product out of this. It also designed it as a special treat to subscribers who got the feeling that a special kind of “reservation” was being made for them on the network. Young people were excited by this and the brand got further etching into hearts and minds of a demographic group that actually controls a bigger bulk of the family income.
Not done with differentiating itself, Etisalat, at a time it has hardly made any profits from its Nigerian business embarking on a sales promo that paid out a whopping $1million to the winner. Etisalat might not have made any money from this outlandish promo but it sure achieved strong brand visibility and impact.
It seems that Etisalat came into the Nigerian market determined to simply spend money over the short-to-medium term without necessarily worrying about in-flow. At launch, the company announced an investment plan of $2billion. Of this, $800 million was spent in the first 15 months while another $700 million has been earmarked to help drive the expansion programmes of 2010. CEO Evans said the current investment will be channeled towards renting telecoms infrastructure to cut costs and save on resources. Additional resources, he continued, will be pumped into upgrading existing infrastructure. Evans also said Etisalat was not expecting to make profits until end 2011 when, hopefully, a large enough subscriber-base would have been amassed to generate sufficient income to make a profit. One brave aspect of Etisalat’s marketing strategy is the plan to attract subscribers from other networks. According to Evans, The “expected increase in Etisalat’s subscribers would mean attracting subscribers from other network users.” This is a challenge that might be tough to handle. In the phone market, equity ranks very high. A phone number is like an identity card. A subscriber’s business and social network is connected via his phone number. This means that there are strong emotional connections existing between a person and his phone number.
So then how does Etisalat intend to make subscribers jump ship from other networks to theirs with the attendant risk of being disconnected from hundreds of friends, family and business associates? Only an Etisalat can provide answers to questions like this. But if track record is anything to go by, competition has good reason to fear. The remains the leading operator in the Middle East, a business and religious hub heavily visited by Nigerians. It operates in 18 countries with an estimated 100 million customers. In 2009, Etisalat reported annual Net Revenues of AED 30.831billion (approx: $10 billion) and Net Profits of AED 8.836 billion (approx: $2.5 billion).
With group performance at such impressive high, it is therefore no wonder the company is racing through the Nigerian market with such breath-taking speed. Within 15 months, it has been able to register its presence in all the states of the federation and Abuja, introduced data services and achieved strong mind share, tools that are prerequisites for brands that want to put up a good fight in the market. Determined to spend $1.5 billion in Nigeria by end 2010 without making any profit and looking and looking to spend additional $500 million by 2011, competition should really watch this dark horse flying from the rear on butterfly wings.
When six months ago, the company announced that it had amassed one million subscribers, nine months after entering the market, cynicism greeted the news, with many dismissing it as mere PR stunts. In a market replete with false claims of market share, one would not blame those that took this news with a pinch of salt.
But the news refused to end there. Fifteen months after entering the Nigerian market, Etisalat came out with another market-shaking news – that it is looking at attracting between 2.4 million and four million subscribers by the end of 2010. And the war chest appears significantly huge. But the telecom market, as capital intensive as it is in Nigeria, is not all about having a staggering budget to play with. Applying resources with the properly balanced strategic mix that attracts and wins subscribers is the highway that is not travelled by faint-hearted players.
The question that hangs on the lips of many is: How was Etisalat able to find such huge subscriber-base and brand distinction at such a short time in a market where nearly all the people that should own mobile phones were already owners of one or two (sometimes more) active mobile handsets? When the company celebrated its one million subscriber-base, CEO of the company, Steven Evans acknowledged Etisalat’s quick acceptance.
“The swift and steady growth in our subscriber numbers is an evidence of the acceptance we have enjoyed from our customers and the superior service quality we offer. We are delighted to have hit such a figure under a year of commercial operations despite our position as the fifth entrant into the dynamic Nigerian telecoms market.
By the time Evans was saying this, statistics indicated that the company was very far below the ladder in terms of market share. Then MTN had over 27 million subscribers, owning 40.23 per cent of the total telecommunications market; Glo, 5.9 million subscribers or 23.44 per cent of the market, Zain, 14.6 million (21.59 per cent of the market) and Etisalat, over 1 million subscribers or 1.54 per cent of the market share. If Etisalat is able to accomplish its four million subscriber target by the end of 2010, that would be a trend-setting 300 percent growth. Tend setting because although the country has a potential mobile phone market of over 100 million, the company would be doing this in the face of challenges that previous entrants did not have to confront with.
When Glo entered the market in 2004, it had to fight its own fight. Then three brands, MTN, Econet (V-Mobile) and Mtel were holding sway. To distinguish itself, Glo emphasised its “Nigerianess” by reinforcing its indigenous ownership. The company also found space in the billing system of the period. At a time Nigerians were crying against the per minute billing system that operators were too unwilling to change, Glo stormed the market challenging Nigerians to reject the per minute billing as charged by existing operators. Needless to say that this marked a turning point in the Nigerian telecom market as other players soon adjusted. Glo rode on the goodwill from this for a long time and owes its quick acceptance partly to this entry strategy.
But if someone had used the “proudly Nigerian” platform and the anti-per-minute billing to ride into the market, what else is left for a new entrant to play with? How can any other player drop anchor in a crowded bay of champion ships with champion sailors?
When Etisalat berthed in the Nigerian market, a revolution was taking place in the Nigerian entertainment industry. Youths were increasingly finding expression in music. The music industry was reaching an attractive high, spurning a local variant of hip-hop with all the lingos, jingos and slangs. In the midst of the challenges facing Nigeria as a nation, a unique “proudly Nigerian” spirit was growing very rapidly.
For this generation of youths, Nigeria was “9ja.” So what did Etisalat do? The first got their network code of 0809 and then coincidentally found a young Nigerian musician who can connect with the “streets” with his music as he could connect with the top echelon with his intellect and accent, to do a television commercial playing on the “9ja” lingo.
Till date, Banky W’s “‘0809ja’ for life” commercial is one of the most memorable campaigns and it went on to be an integral component of every other media advertising by this young company.
What Banky’s voice did for Etisalat was that it provided a magic carpet that transported the company into the minds of Nigeria’s hip-hop generation which statistics have shown constitute over 60 percent of the population. And it is this segment that actually spends money (and time) on telephones and would spend several minutes just to say “hi” to the guy at the other end. And then followed the “0809-u-choose promo. Although existing operators were offering this service, which allowed a subscriber to have his phone number configured to “rhyme” with his/her name on the phone key pad (not qwerty phones though), Etisalat positioned itself as the first to make a product out of this. It also designed it as a special treat to subscribers who got the feeling that a special kind of “reservation” was being made for them on the network. Young people were excited by this and the brand got further etching into hearts and minds of a demographic group that actually controls a bigger bulk of the family income.
Not done with differentiating itself, Etisalat, at a time it has hardly made any profits from its Nigerian business embarking on a sales promo that paid out a whopping $1million to the winner. Etisalat might not have made any money from this outlandish promo but it sure achieved strong brand visibility and impact.
It seems that Etisalat came into the Nigerian market determined to simply spend money over the short-to-medium term without necessarily worrying about in-flow. At launch, the company announced an investment plan of $2billion. Of this, $800 million was spent in the first 15 months while another $700 million has been earmarked to help drive the expansion programmes of 2010. CEO Evans said the current investment will be channeled towards renting telecoms infrastructure to cut costs and save on resources. Additional resources, he continued, will be pumped into upgrading existing infrastructure. Evans also said Etisalat was not expecting to make profits until end 2011 when, hopefully, a large enough subscriber-base would have been amassed to generate sufficient income to make a profit. One brave aspect of Etisalat’s marketing strategy is the plan to attract subscribers from other networks. According to Evans, The “expected increase in Etisalat’s subscribers would mean attracting subscribers from other network users.” This is a challenge that might be tough to handle. In the phone market, equity ranks very high. A phone number is like an identity card. A subscriber’s business and social network is connected via his phone number. This means that there are strong emotional connections existing between a person and his phone number.
So then how does Etisalat intend to make subscribers jump ship from other networks to theirs with the attendant risk of being disconnected from hundreds of friends, family and business associates? Only an Etisalat can provide answers to questions like this. But if track record is anything to go by, competition has good reason to fear. The remains the leading operator in the Middle East, a business and religious hub heavily visited by Nigerians. It operates in 18 countries with an estimated 100 million customers. In 2009, Etisalat reported annual Net Revenues of AED 30.831billion (approx: $10 billion) and Net Profits of AED 8.836 billion (approx: $2.5 billion).
With group performance at such impressive high, it is therefore no wonder the company is racing through the Nigerian market with such breath-taking speed. Within 15 months, it has been able to register its presence in all the states of the federation and Abuja, introduced data services and achieved strong mind share, tools that are prerequisites for brands that want to put up a good fight in the market. Determined to spend $1.5 billion in Nigeria by end 2010 without making any profit and looking and looking to spend additional $500 million by 2011, competition should really watch this dark horse flying from the rear on butterfly wings.
