There Was an Etisalat!

There was an Etisalat!

Few days ago, after the unresolved debt crises between Etisalat Nigeria and its lenders which degenerated to the pulling out of its major stakeholders from continuing with the business in Nigeria, and an ultimatum situation where the Nigerian operation was given 21 days to re-brand or desist from using the Etisalat brand name, the new management board freshly constituted came up with 9Mobile as the new trading name for a telecoms license with over 20million subscribers to cater for.

The journey that started with lots of anticipation, fanfare and excitement, with millions of naira being splashed on the faces of the people, top rated entertainers, every one singing 0809ja for life ends unceremoniously with an ultimatum.

Etisalat came into the fast growing and highly promising Nigeria’s telecom market in 2009, which was then dominated by MTN, Airtel and Glo. It came with the innovative number reservation 0809uchoose campaign where subscribers pre-owned their number and were very promising. They were everywhere no time. I wouldn’t forget the 0809ja nationwide campaign where they were practically ‘dashing’ people millions of naira for simply saying 0809ja. Many see in Etisalat, a company with deep pocket who are really ready to give the existing players a good run for their money, and they surely did.

They were vibrant; they created enough virtual cues that set them apart within a short time.It got to a point that many observers were seeing Etisalat taking the second or 3rd position in terms of subscriber base.

Etisalat became part of the popular culture- involved in music, lead sponsor on the Nigerian Idol reality TV show; they encouraged innovation among students with the Etisalat prize for innovation and so many others. The Etisalat prize for literature was another of its many engaging platforms. These are aside from other CSR activities which includes; malaria eradication, merit awards, schools adoption etc.

The Beginning of Problem

In a bid to improve on service quality and expanding its reach, according to Ibrahim Diko, EMTS VP, corporate affair, they got a loan of $1.2 billion from a consortium of Nigerian banks, backed by their foreign partners in 2013. And as at this point, dollar was being exchange for less than N200/$1.

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Fast-forward, by the end of 2016, dollar was going for over N400, hence Etisalat found it difficult to service the loan as required. The lenders were getting more agitated, who wouldn’t be, with the uncertainty surrounding the Nigerian economic situation. By March this year, it took the intervention of both the Nigerian banking and telecoms regulators, the central bank of Nigeria, CBN and the Nigerian telecommunication commission, NCC to prevent a forceful takeover because of failure to perform its obligations. This as they say just postponed the inevitable evil day.

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Part of the premises for the brief respite that made the lender to shelf their sword for the meantime was the assumption or thought that the UAE’s majority shareholders will increase its stake in the Nigeria operation, thereby pumping in some money to help in bailing it out of the woods while things get better in Nigeria. By the way, Etisalat Nigeria was jointly owned by three shareholders — Etisalat Group — 40 % , United Arab Emirates Sovereign Wealth Fund through Mubadala Development Company, Abu Dhabi — 45 per cent and Myacinth through Emerging Markets Telecommunications Services, EMTS Holding BV 15 per cent) EMTS is owned by Mr. Belo Osagie, the Nigerian promoter.

This was not the story, as they instead of increasing their stake and injecting funds pulled out of the business, and request that EMTS Holding BV, a special purpose vehicle established in Netherlands, to transfer 100 per cent of its shares to United Capital Trustees Limited, legal trustees of the banks.

Following the collapse of the talk with the lender, Etisalat UAE, the parent company through a filing at the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate, announced its discontinuance of shareholding in Etisalat Nigeria

The timely intervention of the regulators and a clause in the NCC license to Etisalat made outright takeover difficult, hence the appointment and composition of new management board. It would be a huge disaster for it’s over 20milllion subscribers, with hundreds of employees and several thousand indirect employees who earn their means of livelihood from Etisalat Nigeria. It is also a negative publicity for the Nigeria economy that a company of that size collapse at this important time that we want foreign investors more than ever before.

Following the discontinuity of interest in the Nigeria operations, the brand owners, Etisalat UAE gave the ‘new owners’ 3 weeks to discontinue the usage of the brand name. So sudden! This made the ‘new owners’ to urgently present 9mobile as the brand name and Nigeria’s newest telecom services provider.

9Mobile, viability, Opportunities and challenges.

Ordinarily, this would have been a mere acquisition and change of brand name which could be done seamlessly as we have seeing in the case of Airtel and others in recent times, however, this is a bit different. Different in the sense that it was a troubled situation that seemed to prolong at least as far as the highly competitive telecoms business is concern. There is a loan repayment of over $500 million still outstanding and the original brand owners wouldn’t even cut them some slacks to properly put the house in other for a new investor before giving ultimatum on the use of the brand.

For the new owners or intending buyer, this might be the best time to acquire a company, because it’s presently at a weak point, the brand value has been eroded with the prevailing situation, hence it can’t be sold with a premium.

Presently, we have a brand name change that was as a resultant effect of an ultimatum issued by the Etisalat brand owners, even though it was imminent. It would have been a bit different if this was announced before the ultimatum and ultimatum situation wouldn’t have arisen or if they were given a little more time to settled down and use the name for the a couple of months while they put their house together.

Secondly, 9mobile from all indication is an interim brand name because various angles suggest that other major telecoms were said to be in top gear negotiation on possible acquisition, the 2 that has been pointed are Orange mobile and Vodacom, and a third rumor angle is the interest of a Nigerian billionaire.

And the cost of a rebranding is enormous for a brand that is still heavily indebted and the lenders are all out for war to get there money.

Moving forward, the unresolved loan situation and the possible acquisition by an established operator is likely going to affects 9mobile promoter to be modest in their marketing campaigns and engagement while waiting for the ‘new owners’ and this might hurt in a seriously competitive market.

More so, 9mobile is a completely new brand with no antecedent. For all I care, it was conjured together to safe face from the ultimatum and avoids disruption. This implies that 9mobile will have to run through the bases of brand building-

Creating its own promises,

Communicate this to the consumers effectively

Deliver on the promise, which is mainly quality service delivery

Stabilize its present position and earn the subscribers trust.

On the other hand, let’s say, the 9mobile promoters are really interested in starting a new telecom brand, which is a very good one if you ask me, considering the enormous opportunity in the Nigerian telecoms , one of the fastest growing and with potentials of more growth. There is also a huge infrastructure in place already and the whopping 20million active lines. You don’t get 20 million active lines overnight. I think 9mobile will be starting on a very good note in terms of infrastructure and subscription base.

They also have the advantage of the ‘global problem’. The situation that led to ‘the downfall’ of Etisalat was and is a global one in Nigeria, every of the other players have their own issues which they have been able to managed thus far, there are rumored of one or 2 almost closing shop a while ago. While this is unfortunate, none of the other players seems to have the capacity to aggressively compete or choke 9mobile out as it might have been 3–4 years ago. It means 9mobile’s engagement now; especially if it’s forceful enough is likely going to be well received, if well planned with a narrative of reinforced management for better service delivery.

The promoters and management of 9mobile are well aware that they are in an already properly dominated market with cutthroat competition from the top 3 players who aren’t just contented with holding on to their millions of subscribers, but like an hyena, looking at snatching the one from the other guy if he wasn’t smart enough.

They need to come out quick about their readiness to continue to deliver good service, without giving the subscribers the benefit of second thought. Changing from one service providers has become very easy with porting which is available on all the networks, without discarding their sims.

Because this is a new brand, they need to come out with exciting brand proposition that will make users stay glue. They need to as a matter of urgency check the viability and effects of Etisalat’s existing engagement platforms and activities, take best among them and start engaging

Very importantly, they need to create a niche for themselves as a new entrant.

Whatever they have to do as I said earlier, every moment count.