How Vodafone lost Nigeria Market to MTN – El-Rufai

The Kaduna state governor, Nasir El-Rufai has explained how MTN became a major market shareholders in Nigeria’s telecom industry.

El-Rufai recalled while speaking at the 20th year Anniversary  of Association of Licensed Telecommunications of Nigeria (ALTON) that Vodafone had the opportunity of being the major operator in Nigeria, when the telecoms revolution started, but it never saw the market potential.

As the popular English proverb says, “one man’s loss, is another man’s gain”. This saying has neatly played itself in Nigeria telecommunications industry between these company; United Kingdom’s telecommunications firm, Vodafone and the South Africa telecommunications company, MTN.

The United Kingdom’s telecommunications firm, Vodafone, was said to have lost the Nigerian market to MTN because it not only underrated, but also under-estimated its potential opportunities.

Vodafone was the first network operator the Nigerian Government contacted to come and jump-start the telecoms sector in 2000.

El-Rufai said the telecoms journey actually started with the late dictator, General Sanni Abacha, but he couldn’t achieve much because of his death in June 1998. “Though, Abacha issued one GSM licence, which we waited for to switch on, but the firm never did, till Abacha died. Then came General Abdulsalam Abubakar. There was one Ibrahim Aliyu, who was the chairman of Intercellular, and later former Permanent Secretary, Ministry of Communications, who later became most senior adviser to Abubakar, so he was able to prevail on the Head of State, and some telecommunications sector’s move were facilitated. But still, nothing concrete was achieved until President Olusegun Obasanjo came on board.”

According to him, with Obasanjo on board, some telecoms experts, including Titi Omo-Ettu, Shola Taylor, and others in Diaspora, submitted a memorandum to the President, appealing to him to license GSM operators.

He said while the appeal was on, he (El-Rufai) was appointed the Director-General, Bureau of Public Enterprises (BPE), and was charged to privatised everything including NITEL.

“I think my appointment at BPE played some role in changing the direction. I went to President Obasanjo, who said he wanted to issue licences to GSM. I told him: ‘Sir, you (Obasanjo) cannot legally do it.’ He asked, why? I said because the Nigerian Communications Commission (NCC) that will issue the licence is not empowered by law to do so. He said: ‘the best I can do is that I have the executive power to license,’ I said sure, you can issue the licence as the government of Nigeria, but any serious operator/investor will want to speak with the regulator to know the terms, and regulations. He said what can we do because he wants to do it as quickly as possible,” El-Rufai stated.

He had told Obasanjo that the country would need to first build the sector, by writing the policy, which should be enacted as fast as possible.

According to him, in 2000, Obasanjo gave him the go ahead, but insisted that he will issue the GSM licence before the end of 2001. “Then, we started the process. I replaced the Minister of Communication, and we began the trustees. The Communication ACT of 2003 was drafted, and that was how we started the journey.”

HOW VODAFONE LOST IT.

El-Rufai said in 2000, while President Obasanjo was in a hurry to issue GSM licences, “he called me and the then Minister of Communications, and said: ‘I want to issue one GSM licence for $1 to any major operator, who do you recommend?’

“I said to President Obasanjo,Vodafone! Vodafone then was the largest mobile operator in  the world. He picked the phone, called the then Prime Minister of Britain, Tony Blair, and he said that some Nigerian delegation are coming to Britain to make presentation on the opportunities in Nigeria’s telecoms market, and that Vodafone should be made to receive us. We went and met with the officials of Vodafone and we made our presentation,” he stated.

According to him, few weeks later, “we got a reply letter from Vodafone. They said they have looked at our presentation, their analysts have looked at it and the forecast is that the Nigeria GSM market is just about five million subscribers in 36 states. That is the size of the market will just be five million subscribers. That only five million people in general can afford to pay for GSM service in three years. According to them, the market was so small; Nigeria you are so poor to afford a mobile phone. We replied them to say our GDP figures are deceptive because 75 per cent of our economy is not capture in the GDP numbers, take a look at this again. They replied that even if 75 per cent of the economy is informal, it only means that only 20 million of Nigerians, 15 to 20 million can afford a GSM phone in the first three years, it was not worth Vodafone’s time.”

El-Rufai noted that the story changed when MTN and Econet came on board in 2001, within the first year of operations, they had over five million subscribers.

ALSO RELATED: We killed NITEL for Nigeria Progress – El-Rufai

“This was Vodafone’s biggest investment mistake, because if they had come into Nigeria at that time, God’s know how much bigger they would have been today,” he stated.

Contrary to Vodafone statement, the Director, World Telecom Labs, Mr Satya Mekala while speaking exclusively with Business Remarks described Nigeria as the best country in Africa to invest for good telecommunications business.

MTN STANDS

Presently, Nigeria is home to over 200 million people with over 259 million connected lines.

In a study carried out by Business Remarks, it was gathered that out of the total connected 259,579,030 lines in June 2019, a total number of 174,024,116 are active with a teledensity of 91.17.

Furthermore, data obtained from the Nigerian Communications Commission revealed that in September 2019, MTN Nigeria records over 65,328,104 subscribers to its name.

In Q3 2019, MTN Nigeria grows its revenue by 12.1 to reach N854billion mainly driven by increase in voice and data revenues.

Similarly in a Nigeria Mobile Report 2019 published by Jumia, there were over 5 billion unique mobile subscribers globally in 2018. The report forecasted that 28 million new mobile subscribers will emerge from Nigeria between 2019 and 2025.

It was predicted that Nigeria will contribute 4% of the estimated 700 million new global mobile subscribers, making it the only country in Africa marked with a significant contribution to increasing mobile penetration in the world.

On the issue of internet subscribers; According to Statistia in 2018, Nigeria had 92.3 million internet users. This figure was projected to grow to 187.8 million internet users in 2023. The internet penetration amounted to 47.1 percent of the population in 2018 and was set to reach 84.5 percent in 2023.

The Nigerian Communications Commission (NCC) puts the number of mobile Internet users in Nigeria at 122,681,418 as of July 2019. This tells us that about 61% of Nigerians are subscribed to mobile Internet data.

In a report released by the National Bureau of Statistics (NBS) for the telecom industry for half-year 2019, Nigeria had a total of 122.6 million internet subscribers. Out of the total internet subscribers, MTN led with 52.1 million, accounting for 43% of the total internet subscribers.

For the regulator (NCC) in the month of October 2019, the total number of mobile internet subscriber (GSM) was 123,206,103 out of which MTN subscribers is placed at 52,163,778.

Among its other achievement was that MTN was successfully listed on the Nigerian Stock Exchange (NSE) Market in May, 2019

Also, recall that Business Remarks reported, MTN has unveiled 5G technology in Nigeria making it the first in Africa.

Achieving download speeds of more than 20 gigabits per second in the first trial, the company adding that the 5G trial is based on commercially available baseband hardware and 5G mobility is supported.

This follows a temporary license from the Independent Communications Authority of South Africa (ICASA), MTN’s 5G trial network uses 800MHz of bandwidth in the 15GHz band.

“5G gives us the opportunity to rethink how our business can add further value to the lives of our customers,” MTN’s Chief Technology and Information Officer, Babak Fouladi said.

While showcasing the 5G network in Calabar after its first trial in Abuja, the MTN Chief Technical Officer, Mr Mohammed Rufai, said the exercise was in continuation of the company’s effort toward educating Nigerians about the new technology, pending its approval by the Nigerian Communications Commission (NCC).

Rufai, who conducted the test trial affirmed that 5G gives highly impressive throughput and speed quality unmatched with what consumers currently enjoy on any 4G networks in Nigeria.

“As you can see, the speed on 5G network is 10 times the current Internet speed being enjoyed on 4G networks,” he told the enthusiastic audience at the Calabar trial.