Etisalat squeezes into tight Nigerian telecoms market

Etisalat launched commercial services in Nigeria on October 24, making the telco the fifth licensed GSM operator in Africa’s most populous country and the company’s eighteenth operation worldwide.

Etisalat enters a tight Nigerian mobile market where it will compete with incumbent operators Globacom, MTN Nigeria, Zain Nigeria (formerly Celtel) and Mtel.

Mobile services were launched in six cities – Lagos, Ibadan, Abuja, Kano, Port-Harcourt and Kaduna, with further cities expected to be added shortly.

Etisalat faces a competitive marketplace, competently serviced by four incumbent mobile operators – MTN Nigeria, Zain Nigeria, Globacom and Mtel. As of August, there were 54 million mobile subscribers in Nigeria, representing a mobile penetration rate of around 40 per cent. There are also numerous unified access service licensees that offer an array of fixed and wireless propositions.

However, Hakeem Belo-Osagie, chairman of Emerging Markets Telecommunications Services (EMTS), the company that owns the licence in Nigeria, remains bullish that the Emirati telco will excel in the complex Nigerian market.

“Etisalat’s success in countries like Egypt, Afghanistan, Sudan and Central African Republic shows that it has the capacity to thrive in difficult and challenging terrains. Here in Nigeria, Etisalat will replicate and even surpass its achievements in those markets,” Belo-Osagie stated.

Etisalat has made an aggressive entrance with a pre-launch promotion offering up to one million Nigerians the opportunity to reserve at no cost their choice of mobile number starting with 0809, as well as receive a free prepaid SIM card that includes free airtime every month, indefinitely. It is believed that almost all of the promotional SIMs have been reserved.

In January 2007 the Nigerian Communications Commission (NCC) confirmed the receipt of full payment of US$400 million by the UAE’s Mubadala Development Company for the award of a unified access service licence in the country.

The unified licence consists of permission to operate a mobile network in GSM 900MHz and 1800MHz spectrum bands. The NCC introduced a unified licensing regime in March 2006, for the first time allowing operators of wireless local loop operations to roam across wide licence areas. Four unified licences were awarded in May last year, with about two-dozen companies having applied for the concessions.

The award of the licence to Mubadala was part of a wider bilateral agreement between Nigeria and the UAE. Mubadala Development Company is a wholly owned investment vehicle of the government of Abu Dhabi. It was established in October 2002. In September 2007, Etisalat entered a strategic partnership with Mubadala Development Company, which saw the telco becoming the operating partner for the Nigerian telecommunications company. Etisalat holds a 40 per cent interest in the company; Mubadala has a 30 per cent share, with the remaining shares held by Nigerian investors.