Parable of the Submarine and the Etisalat Brand

You’ll probably be taken aback by the headline wondering what could be the connection between Etisalat and a submarine! The analogy, in my opinion, is aptly given by the brand’s chief custodian. This is quite different from the story told by a fool – full of sound and fury but lacking in meaning, to paraphrase the great scholar Shakespeare, in one of his classics.
Steven Evans, CEO, Etisalat Nigeria, is surely one of those who should know when it boils to down to investing in Nigeria and telecoms in particular. A meeting with him at an interactive session last week brought to the fore what has consistently made the Etisalat brand tick in the Nigerian market notwithstanding its late entry.
As an early bird to the session, some invitees were surprised to see the CEO and his lieutenants already on ground at the venue waiting to receive guests. And he kept them engaged, speaking from a position of knowledge and competence on the company’s business and how it plans to continue to wrestle market share from the competition.
Sure, he did not betray the trust that he knows his onions in an industry where his company has the uneasy task of being the fifth operator, coming seven years behind the earliest operators. The hard news is that the industry is set to see an intensification of competition. This, according to Evans, is a good sign for telecoms consumers and the industry at large. It is expected to bring in a new sigh of relief as the industry and overall economy is expected to recover from the backlash of the 2009 global financial crisis, particularly the banking crisis which had telling effects on investments and disposable incomes of corporate organizations and individuals in Nigeria.
There was also a slow growth in subscriber levels, according to the Etisalat CEO. “2008 yielded 12 million subscribers to all networks compared to a paltry 4 – 5million recorded in 2009,” he disclosed.
At the close of 2009, Etisalat had garnered 2.6million subscribers, short of its projected 4 million. An encouraging result by all standards compared to the total growth rate in the industry. On an optimistic note, Evans believes 2010 will be better even though he expects a return to proper growth in the market in 2011.
With an infectious optimism in the Nigerian market, he says Etisalat is firm in its commitment to the market: “Talks about investing $2 billion in the Nigerian market are very much intact”. Out of this sum, the company has so far invested $700 – $800million. It plans to continue the trend with another $600 – $700 million in 2010.
Evans likens the huge sums sunk into developing the Nigerian market by way of investment to a submarine machine which will have to reach the base of the sea before it heads for the surface where it will hopefully return to profitability. And the company is not about to blink in its investment drive though it currently covers only 40% of the country’s 36 states while competitors are reported to have about 80% coverage. Etisalat plans to partly leverage on the co-location agreements currently being embraced by the players in the industry to spread its tentacles across viable areas of the country.
Now the competition too should be cautious as Evans sounds a warning. Nigeria has a multi-SIM market with very low brand loyalty. What this translates to is that in most cases, aggressive players will always pull subscribers from competition to alter the market graph. This could be a dangerous sign to the competition. Due to the nature of the market and the brand’s entry strategy, 70 – 80% of Etisalat’s subscribers are poached from the competition and the trend is not about abating. The company hopes to sustain this by its continuous positive propositions to consumers. “Critical to us is building the network and improving our customer service capability. Emphasis is on doing things in innovative and quality fashion,” the CEO maintains.
Just like its current record $1 million promo which stands as the biggest in Africa , more promos will be creatively deployed to drive the brand and endear it to consumers in 2010. Consumers are also in for a good time as the CEO promises that the brand will champion a more competitive price regime to drive its promos. With these and more, one can be sure that a deliberate action is in motion to aid the brand inch into the competition’s territory. Etisalat does not want to be an “also ran”. Its aim is to rearrange the order and sit pretty as one of the top two operators within the next few years. Do you take this as an empty boast? May be not, but it certainly demands continuous innovation, creativity and daring market drives.