When Does The Music Stop?

A personal reflection on the telecoms industry in the Nigerian context

Optimism to burnout

It was October 2015. That time of year when our Chiefs (CEO, CFO, CCO) and a few Directors would fly out to Abu Dhabi for the last board meeting of the year. 

They would typically go with what we called a “board pack” – a detailed analysis of the Etisalat Nigeria business situation on revenue, subscribers, profit margins, operations, head count and any other thing of interest to our parent company Board.

In previous years, some top executive would typically lose their job after the big boys returned from a board meeting. The board meeting always was a precursor to hard decisions being taken to get the ship moving in the right direction. This year was a bit different. No one got fired but the first salvo in my awareness of the incoming business wide collapse was about to be heard.

In an informal debrief on what went down at this board meeting, we were told the board had mandated that we were not to take on any new loans to run the business. They would also not be bringing in any new cash to fund operations or network expansion. We would have to run the business based on what the company generated by way of revenue.

Except you were MTN Nigeria and had already broken even (revenues exceeding running costs) this was quite a tall order. For some strange reason it did not freak a lot of my colleagues out the way it did for me. 

From then on, I believed the owners were limiting their exposure in a way that was truly definitive. I said to myself “if they want us to use our blood to run their business. Maybe it’s time I go use my blood for my own business”. That was how my mind interpreted what I had just heard.

I would eventually resign in December 2015, serve out my 2 months’ notice period and go run Up in the Sky with my business partner Oje Ojeaga. I had spent 9 years working in the Telecoms industry at this point - first as an advertising agency lead on the MTN account at DDB Lagos and then as a marketing manager in Etisalat Nigeria - I was fed up with all things telecoms, I was done.


Hopes and dreams deferred

All over the world, businesses in the telecom industry need lots of patient capital to function and thrive. For Etisalat Nigeria, it’s pipeline of cash was soon to face serious head winds. The music had stopped playing but there was still a lot of dancing going on

In 2013, the company had taken a syndicated loan facility of $1.2 billion with a 7-year tenure to expand its network rollout from a consortium of 13 Nigerian banks. This was a dollar denominated facility and was being paid back as such. In another cycle of business engineering, the company sold 2,136 base stations to IHS in a sell-to-lease transaction in August 2015. All these actions were consistent with industry realities at the time as competition became stiffer and the need to lower OPEX became critical.

By 2016, Nigeria was in the middle of a recession, the Naira had been devalued, and all the banks were beginning to call for their facilities. Etisalat Nigeria was now faced with the maddening situation in which each dollar owed had technically doubled while their revenues were still in the much-devalued Naira.

The business tried to negotiate with the banks to receive their facility repayments in Naira to no avail. The banks then embarked on a risky gambit. Recall that by this time the Naira was in free fall, everyone was looking for scarce dollars. The banks believed that the Etisalat Group in the UAE would be forced to step in to provide the much-needed dollar infusion to prevent crisis in the Nigerian subsidiary. This largely accounted for their insistence on a dollar repayment. Up until this time, about 42% of the loan had been repaid, leaving a balance of $696 million still owed the banks before its major default began in February 2017.

Unfortunately for all, this gambit would fail. The Etisalat Group had decided the Nigerian subsidiary was a loss-making venture and rather dumped their shares and walked away. Emerging Markets Telecommunications Services Ltd or EMTS, the company registered with the CAC and trading as Etisalat Nigeria received the notice to drop the Etisalat brand name within 3 weeks and was left holding the bag with the debt gone bad.

The rise and fall of businesses

Thus began the rapid destruction of value of an entity that truly created value and genuine competition in the Nigerian telecoms space. My contemplation of these events crystallised a theory I have had about businesses and how they rise and fall in general.

This theory derives from a popular situational analysis model called the 5 C’s marketing framework used by marketers to help evaluate the most important factors affecting their business – a health check, if you will.

The 5 C’s are Customers, Competitors, Collaborators, Context and the Company itself. From querying the current state of those 5 variables, an organization could develop a road map and strategy plan to guide the assessment, creation, capturing and sustaining of value. 

This article posits that the Company is probably the most critical variable in determining sustainable market success using the Nigerian Telecoms Industry as a frame of evaluation.

You can understand your CONTEXT/CLIMATE very well and align business decisions accordingly, understand the CUSTOMER very well and create products and services they love, understand your COMPETITORS so well and have a check mate plan to be a step ahead of them and even treat your COLLABORATORS so well as to gain win/win scale but if the COMPANY itself is badly run, beset by internal struggles and is not largely aligned to a common set of goals you will flounder. 

Imagine a car in which there is a struggle for the steering wheel by the driver and passengers while the car is in motion. That is what it looks like when a company is at odds against itself, the journey to a destination will always be frustrated.  

In the Nigerian telecoms industry where I have worked for most of my professional life, I have seen this variable as probably the most important of all the 5 variables. I will use this industry to explain this hypothesis.


What happened in nineteen years

19+ years after the first GSM call in Nigeria, MTN Nigeria is the market leader with 40.1% market share, Airtel (the current brand iteration of Econet Wireless) is 2nd with 27% market share, Globacom, which started operations in 2003 (2 years after MTN and Econet) has 26.5% market share, and 9mobile (the current brand iteration of EMTS) has 6.2% market share. 

(Source: NCC)

But this was not how the story began. On May 16, 2001, Econet Wireless made the first live GSM call in Nigeria. MTN Nigeria made their first call on June 8, 2001. Both companies eventually began full operations in August of 2001, but you would think this initial head start would be written in stone and Econet would forever be ahead of MTN Nigeria. 

I have a lot to say about why this pie chart looks like this but the most telling for me as an observer and participant in this industry is that the companies with the most stable management have earned the top spot and are likely to keep it. 

Close followers of this industry will tell you that MTN Nigeria and Econet Wireless Networks were going at it neck and neck from 2001, with Econet the more beloved of the brands up until the company became enmeshed in a continuous cycle of boardroom upheaval.  It’s founder and pioneer CEO Mr. Strive Masiyiwa has chronicled his side of the story that saw management changes and brand transitions from Econet to Vmobile (Vodacom had a non-branded cameo in between) to Celtel Nigeria to Zain Nigeria and now Airtel Nigeria. 

Without a doubt, these series of challenges at the COMPANY levelhindered the ability of the entity to fight and dominate in this market, frustrating its attempt to overtake MTN and eventually ceding its 2nd position to Globacom. 

In 2010, Bharti Airtel completed the purchase of Zain Africa assets and began the series of actions that finally brought resolution to the board room struggles of previous years. With sizable investments in technology and focused brand/product marketing and improved media spend, Airtel Nigeria seems to now be on its strongest trajectory in recent years. 

                                             (Source: MMS Data 2020)

As recently as February 2020, Airtel was still 3rd in the industry via subscriber numbers behind Glo but has slowed edged its way back to the number 2 spot as of October 2020. It has taken 10 years to regain this footing after resolving its internal company struggles.


Focus leads to stability

Toe to toe, all these companies have battled to acquire customers with varying levels of ferocity, top dollar spend on network expansions, technology upgrades and marketing yet what has assigned them to their current standing appears to be the stability of the COMPANY itself.

Of all the Nigerian Telecom players, MTN Nigeria and Globacom have enjoyed the greatest stability at the COMPANY level in the entire industry. The latter, being a family-owned business, has enjoyed the ensuing steadfastness needed to remain focused on its corporate goals. You can say a lot about the Globacom business, but you cannot take away the size of the ambition of the Adenuga patriarch and how tightly he has kept a lid on the enterprise. 

With the industry defining opening salvo in 2003, it was clear Globacom was playing to win. By introducing per second billing to the industry, Globacom has been consistent in a populist assault leading to price crashes and promotions to win market share. Their ongoing sponsorship of the broadcast of the English Premiership League on DSTV bears testimony to their up-market trajectory and quest to mainstream the brand with premium associations. 

The self-styled ‘Grand masters of data’ have kept their focus steady year on year with the clear intention of becoming the market leader. Could their inability to maintain a 2nd position be a function of the company still casting the long shadow of a too strong Chairman at the helm? I will leave that for others to closely interrogate but you can be confident that if the company remains aligned to this ambition from the board room to the least employee, the fight to become number one will never be abandoned.   


MTN Nigeria has had a succession of CEO’s (7) in its 19+ years of operations but a largely stable board of directors. In fact, the board only recently got reconstituted after about 18 years. To show their seriousness of intent, they appointed as Chairman of the reconstituted board, the man who had midwifed the revitalized Nigerian telecoms industry at the Nigerian Communications Commission (NCC), Dr Ernest Ndukwe. This, coming after the shares of MTN Nigeria were listed on the Nigerian stock exchange again showed how robust the management expertise of the company has proven to be. 

This relative stability at the corporate level I posit, has accounted for its unmatched dominance in the sector, it has been able to maximise this focus in deploying its resources to overcome every challenger over the years. They have taken on local and international syndicated debt to expand operations, faced the same economic upheavals, weak purchasing power and challenging regulatory environment like other players but have found a way to maintain leadership through it all.

For close to 3 years, I worked on the MTN Nigeria account at DDB Lagos, its advertising agency. First as a strategic communications planner and eventually as a Group Head of the Consumer Segment team, through it all I found the MTN team to be a very well-oiled ship. They reviewed every initiative they embarked on, scanned the environment for every threat and listened extremely hard to the voice of the customer. Consistently that voice of the customer would relay the perception that the brand was perceived as stingy, exploitative, and yet still respected as a market leader. The business managers never silenced the research agencies who almost yearly gave this feedback. Our meetings were constantly aimed at how to improve this perception while maintaining healthy margins.

It appears this management ethos has persisted through constant market volatility from insurgent competitors, economic upheavals and even a patch of hostile regulatory friction with the Nigerian state. Indeed, their last announced unaudited results showed an impressive 9.1% increase in earnings before interest, tax, depreciation and amortisation (E.B.I.T.D.A) of N497.9 billion driven by strong subscriber growth (active and data subscribers) in October 2020 - the very testament of what a market leader looks like. 


What happened to Etisalat?

Just when the business crisis that began this article was getting started in 2016, Etisalat Nigeria was the 4th operator with 20 million subscribers and a 15% market share. MTN Nigeria had 39% market share, Globacom 23% and Airtel 23%.

                                                             (Source: NCC)

As of October 2020, 9mobile Nigeria (the new trading name for EMTS/Etisalat Nigeria) has 12 million active subscribers and 6% market share. What can account for this loss of over 8 million subscribers in 4 years? In the same market, its competitors have seemingly grown market share at its expense. The company has been fighting valiantly to recover its position since a new management team and shareholders came on board in the first quarter of 2018. 

It is important to note that EMTS had to change its brand and operating name from Etisalat Nigeria to 9mobile in a swiftly executed rebrand exercise in July 2017. All this was done amid its ownership and financing struggles. The loss of equity in the brand name change of Etisalat to 9mobile will probably need to be studied by brand scholars.

Etisalat Nigeria had been built as a youthful and innovative brand widely loved in the Nigerian telecoms space. I am clearly biased having worked at the company for 7 years but I dare say it was one of those rare institutions that had an alignment of corporate goals with organisational culture and deep customer orientation. 

From 2008 when it launched to 2017, its subscriber growth was impressive, 0 to 20m in just 9 years. Its growth had largely been at the expense of other operators and an underserved youth population, consistent with the brands positioning. Etisalat Nigeria intentionally set out to recruit the highest spending subscribers on other networks (MTN with the larger slice of the pie) and the growing youth population in Nigeria through various above the line and below the line marketing initiatives and campaigns.

If there was any competitor the market leader was wary of, it was Etisalat Nigeria. The company seemed on a sure path to take the scalp of MTN even from its 4th position in subscriber numbers. As any telecom professional would tell you, average revenue per user (ARPU) and actual revenues are the hidden indices that really tell how well a telecom company is doing. On both scores, Etisalat Nigeria had a gun to the necks of Airtel and Globacom, the erstwhile 3rd and 2nd operators via subscriber base.

As a testament to the quality of Etisalat Nigeria staff, all 3 operators embarked on an aggressive hiring spree from its ranks since the company became destabilised in 2016. An entire team of marketing strategy professionals were headhunted to MTN Nigeria, network engineers and sales professionals were tempted away with lucrative offers to Globacom and Airtel in debilitating droves.

Herein we land at the answer to the question earlier posed: What can account for this loss of over 8 million subscribers in 4 years? The answer seemingly lies in the decimation of the COMPANY itself. Without a doubt, the devaluation of the Naira in 2016 (a CONTEXT change) set off the turbulent dislocations that engulfed the company but once it lost the ability to focus on growth and execution by boardroom and financial struggles, it began losing key personnel, network quality suffered, and subscribers began to lose confidence as they no longer received competitive offers as the company product road map was thrown off balance. 

The end of the beginning

As my opening story confirms, as far back as 2015, the Etisalat Group board was already poised to limit their exposure to the Nigerian entity. The naira devaluation and the aggressive stance by the consortium of 13 banks only hastened the process of coming destabilization to Etisalat Nigeria’s operations. 

The subscribers who had kept faith with the company stopped recharging their lines and there was less attraction for new subscribers to join the network. Growth became a thing of the past. To get back to winning ways would require a long period of stability, capitalization to fund network optimization/marketing spend, clarity of the target market to pursue and the proper marketing mix to attract them. This is the challenge before the board and management of 9mobile today. 

Multi-SIMing is the reality of the Nigerian telecom space. This basically explains how many Nigerians carry dual sim phones with at least 2 different operator SIMs in them. This fact is both a gift and a curse to telecom operators. It assures that no operator can totally claim to exclusively own a subscriber, they are all basically sharing subscribers. The most important question for any Telco player is which SIM a dual SIM subscriber would choose to recharge each day. 

Does this long treatise of mine mean the fate of all operators is sealed? Will MTN Nigeria remain perpetually dominant? I don’t think so, fortunes can change in any industry.  However, if a company remains tightly knit, well run with minimal to zero internal disruption, the challenge before their competitors becomes so much harder to unseat them.

The entire point of this article is that every company rises and falls to their own hand. The better run and managed your company is vis a vis its competitors, the stronger and more likely you are to attain and master a dominant position. 

This should be the supreme task of a board and management team, creating a company that is always focused on its corporate objectives – getting culture right, getting financing right, embracing technology, creating, and capturing value without fail. 

Do this and stand your ground, you will prevail. The music only stops when you do. 


Idiareno Atimomo is the Chief Operating Officer and Co-Founder at Up in The Sky Ltd, an award-winning creative company that makes film, advertising and media neutral content based in Lagos, Nigeria.

Between Nigeria and the World Bank

The World Bank is not playing straight with the country

A few weeks ago, reports began to appear in local and International outlets suggesting that the US$1.5 billion loan Nigeria had arranged with the World Bank had been delayed owing to concerns the Bank had over Nigeria’s commitment to reforms mainly around the country’s currency regime. Reuters reported that:

“They are not convinced about the reforms,” a source close to the government said. All three sources declined to be named due to the sensitivity of the negotiations. The source added that the currency was the core issue. 

World Bank loans are often contingent upon reforms. It has not outlined any demands, but said previously that it was “recommending” a more unified, flexible exchange rate. Fuel subsidies and electricity tariffs are also being discussed.

A short history of a loan

The now much delayed loan began its life in late February this year when the World Bank reached out to Nigeria, informally, offering it a loan to deal with the coming impact of the coronavirus. By March 23rd, the World Bank made a presentation to Nigeria on the loan’s conditions and what it thought it might be needed for. This was a short 4-page presentation with the summary of it being that the loan would be to support Nigeria’s response to the pandemic. The presentation barely made mention of a healthcare response let alone anything to do with economic reforms.

On April 6th, the World Bank made a more detailed presentation (18 pages) to Nigeria which began to hint at reforms of Nigeria’s I&E foreign exchange (window) market. But while this loan was ostensibly to support Nigeria’s response to the pandemic, the presentation curiously made no mention of a healthcare response, as one might reasonably expect. At any rate, in Nigeria’s defence, the pandemic was not the country’s doing and it was the World Bank who approached Nigeria and not the other way round.

By this point, a target date for disbursement of the loan was set at June 2020 and beyond the mention of the I&E window in the presentation, no other reforms were required as a condition for disbursement. The World Bank does not typically require macroeconomic reforms - it often subcontracts that function to the IMF through the Letter of Assessment instrument which allows it to leverage on the IMF’s expertise in that area.

By April 28th, the IMF had concluded its own separate assessment of Nigeria’s situation and approved its request for a Rapid Financing Instrument (RFI) of US$3.4 billion. This was a record amount and was disbursed to Nigeria in one tranche specifically to aid the country’s response to the pandemic. In advance of the IMF’s approval, the United States’ Executive Director at the IMF, Mark Rosen, had written to Nigeria on April 26th promising the United States’ full support for Nigeria’s request, a commitment which was kept.

Even though an email from the World Bank’s country director to Nigeria’s Central Bank (CBN) spoke of ‘quick disbursing financing’, the loan remained elusive and by May 28th, another message from the World Bank was received by Nigeria with a whole new list of conditions including demands that Nigeria’s PPPRA - the body which sets the price of petrol - should make its pricing formula public. It also asked the CBN to commit to an exchange rate within 2 percent of the Nigerian Autonomous Foreign Exchange (NAFEX) rate. To the CBN’s credit, it moved fairly quickly and by July had implemented the NAFEX requirement (Nigeria’s Finance Minister got the request from the CBN and approved it the same day.)

The sound of goalposts moving

Rather than approve the loan, the World Bank then came up with a new demand - the CBN had to clear the backlog of foreign exchange demand which it calculated at US$6 billion. The CBN’s own calculations put the backlog at US$2 billion while in a separate calculation, the IMF put the figure at US$2.5 billion. To be clear, the backlog from foreign dividends, such as the one that recently embarrassed Nigeria’s largest bank, as well as those from correspondent banks is not included in CBN’s calculations. Still, it will be a stretch to imagine that even with those numbers included the number would reach the World Bank’s US$6 billion figure.

The World Bank then brought up the issue of Nigeria’s notorious parallel market where rates are always higher than official markets. It demanded that the I&E window somehow reflect the parallel market rate. The CBN’s position on this has always been that the parallel market only serves 7 percent of Nigeria’s forex demand (it is not difficult to pick hole in this CBN position, though) and as such makes no sense to use it as any kind of official rate.

What’s going on?

It is difficult to understand why the World Bank appears to be leading Nigeria on a merry dance over a relatively small loan amount that is less than half of what the IMF already approved and disbursed. One can consider a scenario where the funds were actually to help with Nigeria’s response to the pandemic and it had not yet been released by the end of August. Nigeria has fortunately been spared the worst scenario from the virus for reasons that remain unclear. Yet, had the worst happened, how might the World Bank defend withholding a loan to help with the country’s pandemic response on account of reforms to the country’s foreign exchange regime?

The IMF’s country assessment is usually valid for 6 months and the World Bank typically relies on it for that period. Yet it has simply ignored the IMF’s position this time and continued to move the goalposts.

One speculation is that the World Bank is unhappy that foreign portfolio investors are now stuck in the country unable to get the dollars they need to exit their positions and leave the country.

But this is also not the first time the World Bank will lead Nigeria on such a dance that ultimately ends in disappointment. In 2016 there were extensive talks about a loan which went on and on and ended with no funds being disbursed.

Most disturbing is that the World Bank now seems to be using the media to selectively leak information to the public designed to paint a picture of the country’s resistance to reforms as the sole reason for the delay.


It is not hard to find fault with much of what Nigeria does as a policy response and the World Bank is right to ask the country for reforms at any time, if only on behalf of Nigerians who would otherwise be ignored by their government. Yet, to lead the country on an endless dance over something as serious as a response to a global pandemic is, to put it mildly, in very poor taste.

And it really ought to be upfront as to what it wants from the country. Without delay

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