(L-R) Aja Enekwachi, head, regional sales, South South and South East, Etisalat; discussing with Yinka Akande, director, brands and communications, at the launching of Etisalat promo for South and South East region in Owerri.

AS Bharti Airtel, India’s dominant operator, gears up to formally commence active operations in Nigeria and other 14 African countries which it recently acquired from Zain Group,there are indications that the telecom operator may replicate strategy of ultra low cost services to its subscribers in India to crash the prices of telecommunications in Nigeria. This comes on the heels of drastic reduction of its workforce and replacing it with outsourced contract staff, BusinessWorld can reveal.
This development becomes necessary as the company is planning to crash the current telecoms tariff in Nigeria. BusinessWorld Investigations can reveal that the anticipated low price is feasible if the company also implements its staff harmonisation plans in line with the model it operates in its home country.
Bharti’s model, which aims at maximising the consumption of minutes, has seen successful implementation in India. The company plans to do this by raising subscriber per base transceiver station or by increasing usage per subscriber by way of offering lower tariffs.
The telecom firm has particularly noted the importance of the Nigerian market to
its success in Africa and believes that having managed to maintain its leadership and profitability in its home market despite unprecedented levels of competition, severe price erosion and ever-tightening profit margins, some of these strategies could be employed to bring Zain Nigeria to profitability.
This would, however, come at a price. Bharti plans to offload its network management, IT systems, call centres and retail distribution networks to third parties in order to remain competitive. Anything not deemed customer-facing would be outsourced. This would mean massive job loss in Zain Nigeria.
Bharti’s strategy, involving cost reduction and increased usage, will have to come with capital expenditure investment. The company will have to build a strong network to compete with other players in the country. This could require an investment of about $1.5 billion. The higher taxes and mobile termination rates can also cause problems for the Bharti model with lower tariffs.
Another difficulty for the company will be Zain’s operational costs. The company is
currently loss making and the entity will have trouble making profits on low cost model. Thus, large number of Bharti personnel will have to relocate to Nigeria, for instance, to kick start its style of operating with existing infrastructure. This emerging scenario may likely aggravate the labour situation in the economy based on the fact that the industry is now the largest employers of labour in the country.