The company looks like it’s dying—9mobile

Etisalat came into Nigeria with a splash, marketed themselves as though they were for the high class, and a special group with cool tastes. They were the last to arrive so they had the hill climbing task of building a customer base in an ‘old’ but still growing market; they needed to ensure national availability quickly so as not to detract potential customers. Their services worked well, and they attracted lots of users through their data service, but they made themselves the most expensive of the four. They wanted to be the Apple computers of telcos in Nigeria. Years later, they sold off, and a new company 9mobile took their place. Nothing changed, the core strategy of unique but pricey—relative to the competition—tariffs and appealing to coolness remained the same. They’ve been losing customers from before the sale, and still are. It looks like they simply don’t want to live anymore. Because of a false start and a false premise?

Here are some thoughts that have come up in discussions without regard to workability….

The mobile network business serves a commodity market requiring a delicate balance of price, performance and ‘coopetition’. Many people will cope with mediocre but managable performance if the price is low enough.

Forget coolness and high class, this is a commodity market where people don’t attach emotional highs to spending big with nothing for other people to praise. Your service is neither an iphone nor a mercedes.

Use the Chinese method, bring your prices down. However, don’t overdo it, and don’t reduce quality too much either. Matching the cheapest across the competitors may be sufficient. This may lower income, but hopefully stem the trend of losing customers. You may even get some old customers back. Providing free data will win you many fans, surely. Could there be a medium to long term benefit for doing this? How can you do this without upsetting the others?

Wouldn’t it better to give real tariff benefits that apply to all network, versus too much skewing to own customers. Most people use other networks already…. You want to both keep your existing customers and win new ones.

Look for a complementary side gig; it looks like the others are ahead, but there’s alot of space in the sky.

Sell off to the second biggest provider?

Close down the business and auction the property.

A telco is a bank.

You deposit money in a bank; you withdraw money from it; you convert between currencies; you buy and sell using electronic banking locally and internationally. SWIFT, VISA, and other clearinghouses interface between the banks. Then there’s correspondent banking: this is what is triggered when you roam.

Buying phone credit is a parallel to foreign exchange transactions: credit for money. Loading the credit is like depositing the money in a bank. You withdraw the credit in products and services, buying calls, texts, internet services, music, apps etc. Some of the purchased products may be paid for by direct debit of the customers credit. Here the customer must have explicitly, in clear incontrovertible terms, given permission for these debits.

Being a post-paid customer amounts to having a credit line with a bank which you ought to settle monthly, usually. Roaming involves international money transfer, like using your debit card in a foreign country. You may even transfer credit and some other services to another of the same telco’s customer, as also with money transfers. Telcos have their own clearinghouses too.

Thus, a telco is a bank, albeit a highly specialized and narrowly tailored one. A lot of them have fairly large cash balances already. And with an existing customer base and their infrastructure, telcos could easily convert to full fledged banks as we know them—instantly profitable and very liquid.