Nigeria Mobile News
News about Telecoms development in Nigeria
Thursday 13 March 2008, 6:54 PM
Nigeria Telecoms Triple play blues.
In the past few years, “triple play” has probably been the biggest buzz word in telecommunications worldwide,promising as it does to boost revenues and reduce churn by offering an array of voice, video and data services. Today, integrated triple-play delivery is energizing the telecom and mass-media markets in Europe and America.
Triple play ambitions of Some telecommunications companies in Nigeria will change the landscape of communications for ever when implemented. Globacom and MTN with its acquired fixed wireline company,VGC communications Ltd, have made their intentions known about this innovative service and they sure have plans in place for it. Commoditization of Mobile telephony has led to a decline in spending of subscribers, forcing telcos to look beyond traditional services for future growth. In the belief that bundling of services in the convergence era will increase the attractiveness of service packages and improves customer retention, operators are staking their future on multi-play, viewing it as a means of achieving growth and differentiation. In essence they need the services to make subscribers spend more.
In telecommunications, the Triple Play service is a marketing term for the provisioning of the three services: high-speed Internet, television (Video on Demand or regular broadcasts) and telephone service over a single broadband connection. Triple Play focuses on a combined business model rather than on solving technical issues or a common standard. Unlike many other Services which operators classified as value added services, Triple play is far more than this. The challenge is to deliver voice, video and data services to Subscribers, over a single access point. Therefore telecommunications companies will be adding IPTV to their portfolios and to handle the complexity of the infrastructures they need to deliver the digital world their customers demand. The challenge lies in managing these conflicting demands reliably and efficiently, at acceptable cost, while providing the consumer with the quality of experience he has come to expect.
In maturing triple play markets like United states of America, where the service has been around for awhile, telecommunications firms are battling with cable operators for triple play market share. The cable companies offer a significant installed base of pay television subscribers and fast data rates using their cable-modem technology as they expand their services into data and voice communications. For their part, the telecommunications providers view the cable companies' incursion into the voice realm as an act of war. The telcos have little choice but to respond. So, Verizon and AT&T are rolling out IPTV services using advanced broadband networks that feature higher data transfer rates. However, the cable companies are firing back by offering their triple-play solutions in order to retain their current subscribers and to attract voice and broadband subscribers away from the telcos.
In the past, television was only distributed via cable, satellite, or terrestrial systems. Internet TV is basically defined as the ability to view video streams over the Internet. The primary models for Internet television are streaming Internet TV or selectable video on an Internet location, typically a website. Today - with the increase in Internet connection speeds, advances in technology, the increase of total number of people online, and the decrease in connection costs - it has become increasingly common to find traditional television content accessible freely and legally over the Internet. Internet television utilizes the connections of the Internet to deliver video from a source to a target device. Some of the ways in which Internet delivered television is used include,watching on a regular TV via a direct connection from a computer or a Set-top box, or on a computer, or on a portable device such as a mobile phone ,show a channel 'live' like regular TV, or allow the viewer to select a show to watch on demand,"Video-on-Demand" or VOD ,allows low budget, home camcorder productions to expensive professional productions to be viewed .Niklas Zennstrom and Janus Friis, both former skype owners launched joost,an iptv which promises to give cable operators a run for their money.
Telcos must remain vigilant because the challenges are not insignificant. Those challenges run the full spectrum of technical, regulatory and competitive and must embrace the technical challenge of delivering high-definition TV and other bandwidth-intensive applications.Also must weather the regulatory storms surrounding broadband, universal service and access to compelling content. Must meet and surpass the competitive challenge offered by other sectors, most notably satellite television service providers like the dominant player,South African Multi-choice DSTV and other upcoming providers like Hitv, Fstv,MyTvAfrica and host of others. Not also forgetting the ever innovating local stations like Silverbirds(Available on Jump TV) TV, AIT,Channels and many others. Already some are already offering specialized content like DBN which is a sport only TV channel.
Triple play, Unlike DSL, which has been aimed at heavy Internet users,is envisioned as the Plain old telephone systems of the 21st century: universal and priced affordable. Cost to consumers must be pretty much in line with what they pay today for Plain old telephone systems and cable TV. A premium triple play package which combines basic, several premium video channels, advanced video features, telephone service, and broadband is offered presently at around $100 in America. Pricing will determine widespread acceptance.
Similarly, if customers perceive video services to be less reliable than present Digital satellite TV and renting DVDs, they will not switch to triple play. And unlike telephone service and the Internet, television is viewed by more than half of the population for more than two hours per day. Outages will be duly noted.
The reliability challenge is more than just perceptual. Legacy services really are highly reliable. Fixed wireline telephony and cable TV are designed to deliver high-availability services. The design standard for telephone circuit switches is two hours downtime every 40 years, and analysis of cable TV designs shows 41 minutes downtime per year for the hybrid fiber-coax plant. Service availability is very important here since a subscriber will expect Television to work when switching it on for news or any other programme, likewise the internet and the voice.For this service to make the required impart, it has to be “always on” service.
Ease of use and reliability are critical considerations in any consumer product. The next generation technology must be easy to set up and configure and its operation must be relatively transparent to subscribers.
Customer service support in a single play world, like voice or video or data is challenging in the best of circumstances. Service providers need to attract new subscribers and quickly recoup the expense of acquiring them, while solving subscriber technical problems and answering their questions in a way that maintains high levels of satisfaction in order to reduce churn. No small feat. Support in a “triple play” world is an order of magnitude more difficult. It’s not simply three different areas in which to keep customers happy and keeping costs down. Customers expect to receive the same level of support across all services offered , seamlessly and consistently in real-time. They want one bill and one person to call if they have a problem. Without this seamless integration of service and support, they might as well buy each of their services from the lowest cost provider.
For telcos, the "triple play" represents the ultimate way to increase profits and customer loyalty at the same time. While this sounds like a piece of cake, not everyone is excited about its prospects because of the harrowing experiences of mobile subscribers presently. Customers Service levels must be consistent and superior for all three parts of the triple play in order to keep from churning subscribers.
The triple-play future is indeed bright, and we have reason to be excited. But let's not forget that there is still work to be done .
Emmanuel Okoegwale
emmanuel@gomobileng.com
Thursday 13 March 2008, 6:24 PM
Can Number portability Drive Etisalat Nigeria Market Share?
Farmed-out license holder,Etisalat Nigeria will utilize the Mudabala License in the very competitive and fast growing Nigeria market.Mtn the clear market leader with over 15 million subscribers with Glo and Celtel coming a close second and third with very impressive figures, the market is hotly contested for and operators will go to any length to acquire more subscribers even in the face of declining quality of service and poor mobile value added services.
Etisalat job placements in the newspapers signals the readiness to commence pre-roll out operations which is been speculated for the first quarter of 2008.The big question is,how will Etisalat pursue and join a race of six years with very formidable operators?
Nigeria’s third operator,Glo which came in later after the two dominant operators,MTN and Econet (Celtel),adopted the per second billing which provided the needed
Leverage to quickly establish in the competitive Nigeria Market.In the absence of killer mobile value added services that can clearly differentiate the new operator,Etisalat,Number portability will offer the best and sure way to acquire
Significant subscription level within a short time.
The Nigerian Communication Commission recently approved the use of number portability for the telecoms operators in Nigeria and the commission is making efforts to educate operators on the advantages of number portability. Number portability is a key aspect of deregulation in telecommunications. To ensure that there is competition in the marketplace for telecommunications services. Mobile Number Portability is the ability of a mobile subscriber to retain his/her subscriber number when changing network operators within a country.
Number Portability is not to be regarded as a subscriber service, which a subscriber can subscribe to. It is a network feature that allows the subscriber to keep a unique mobile phone number but must be agreed to among different mobile operators within the defined national or regional boundaries.
Number portability though a recent phenomenon has recorded significant successes in Asia markets which is very similar to the Nigerian scenario. Singapore was the first to implement in 1997 and Hong Kong in 1999,Taiwan recently implemented in 2005. These markets had already achieved the 50 percent mobile penetration rate during that period compared to Nigeria’s penetration rate of 25 percent which still offers a huge underserved market with a population under licensed territory of 140 million people and mobile phone subscription of over 40 million.
Number portability can be locality based which enables a mobile subscriber to move from one location to another without changing mobile number. This will significantly reduce capex cost and reduce roll out time in different regions in the vast Nigerian land mass for a new operator like Etisalat.
Second type of Number portability is Service Portability that enables a mobile subscriber to keep same number when changing different telecoms services and this is commonly used for mobile value added service. If a subscriber on a donor network wants to access a particular service on a receiving network, there will be no need to change number for the duration.Lastly,the Operator Portability that enables a subscriber to switch mobile operator without changing the mobile phone number,is essential for fair competition among mobile operators and to help new entrants gain market share.
In a market with poor quality of service where mobile operators are still chasing to sign on new subscribers rather than maintain existing ones and increasing the average revenue per user through innovative mobile value added services, number portability will be an advantage to Etisalat if the network offers better quality of service and superior customer service which is lacking with some mobile operators.
There are advantages for implementing Number portability and like wise challenges.
New operators can quickly acquire subscribers though not necessary at lower cost because there are cost elements to number portability. Service providers will often want to charge an administrative fee and recurring monthly fees for number porting services. These fees could discourage some potential porters, as they do not see the justification for such service charges. There is also a waiting period for subscribers to enable the ported number from the donor network to the receiving network and if the waiting period is not reasonable short, subscribers might get wary of the signing up for the service.
Finally,the dominant operators which will provide the bulk of subscribers wanting to move away to new operators like Etisalat,should not see the entrance as a threat but a health competition which will improve the over all satisfaction of the subscribers whom they called Kings.
Emmanuel Okoegwale
emmanuel@gomobileng.com
234-8030818868
Thursday 13 March 2008, 6:20 PM
Late Entrant strategies for Visafone and Etisalat Nigeria.
As the newly licensed cdma and Gsm operators commences roll out, indications are very strong that their might be some displacement in the Nigerian Telecoms Race. Clear favorites and pioneers like Mtn, Celtel and Glo are poised to face stiff competition from late entrants, Etisalat, Alheri and Visafone.
Ordinarily, Visafone should not be classified as a major threat since they will operate in the CDMA range but the class of additional license(800Mhz spectrum) that was bought after taking over cellcom, places the company in good position to provide some unique services and Coupled with the speedy roll out plans and the pedigree of the chief promoter, Mr Jim Ovia.Visafone is presently offering Very reliable and fast internet in the Nigeria Mobile space.
Etisalat is a clear leader with innovative products with foot prints in the Middle East market and many years of Experience and good financial position. They are a formidable organization.
Little known Alheri is backed by Nigeria’s leading Business magnate,Alhaji Aliko Dangote. This will be his first known foray into the rewarding Nigeria Telecoms market. Despite the seemingly little dog status in the telecoms market, they possibly have what it takes to challenge the dominance of the big operators. Alheri, holds a 3G license which enables an operator to engage in more data intensive applications and the backers also have deep pockets.
Early and dominant operators provides a significant and sustained market-share advantage over later entrants. Still, later entrants can succeed by adopting distinctive positioning and marketing strategies. Experience has shown that in the Nigerian Telecoms market, innovations and financial muscles is a major factor for acquiring subscribers. Late entrant Globalcom is an example of such innovative spirits. Pioneers in most industries, once they have reached the status of incumbent, are powerful. Sometimes, however, they get complacent or are not in a position to cater to the growing or shifting demands of the marketplace. New entrants can take advantage of gaps in the offerings of these aging pioneers, or find innovative ways to market their product or service. Globalcom was able to break into the Nigeria Telecoms market easier because other operators did not implement per second billing which should have slowed Globalcom’s race if already in place as at that time.
While it is fine to be a dominate player in a Telecommunications starved economy like Nigeria but it comes with a price of higher entry cost and product research. Late entrants do not need to go all the way anymore. It cost less to imitate a product than start from the scratch and with a penetration that is still less than 40 percent of the license under territory of 140 million people, there are still opportunities for deeper market share.
For the late entrants to quickly find their voices in the competitive Nigeria Telecoms market, they need to study the Mobile Value added services product portfolio offerings of the existing market leaders, Market environment and positioning. Some Basic strategic planning for service offering and Product portfolio is for late entrants to look for new geographic (where possible) and segments for their products. Presently, most Mobile value added service offerings of Dominant operators are focused on mass and youth segment market and the chief products are entertainment based which do not offer any real life benefits in any manner.
Strategic market entry plans for Telecoms late entrants include price reduction in an existing market. By introducing a product at a lower price than Dominate Operators, a late entrant can attract new subscribers who would not have otherwise signed for the service and in effect such a product ¬¬will lead to an expansion in the total market. An operator can also subsidize low end phones to reduce entry cost for people that ordinarily that might not be able to pay a lump sum for handset or even acquire one.
Product and service innovation with focus on a niche market, can help to establish late entrants as dominant players. Companies can compete by being innovative in the marketplace. The innovation may be radical or incremental. One example of incremental innovation is an enhanced version of an existing product. The enhanced product can compete directly with existing products, or it can be positioned to attract a smaller segment of the existing market. In addition, the improved product or service can sometimes attract new subscribers that are not the current target for the existing product or service. For example, Blackberry phones are currently without international language translations for emails and Sms. All the unique selling points for Nigeria Mobile operators for BlackBerry phones is the email service while neglecting the value added on for Blackberry, that has potentials to earn data revenue, change the face of e-commerce interactions in Nigeria and also further differentiate the operators offerings of Blackberry.
Late entrants can adopt the above to make in roads into the Nigeria Market but they should also be mindful of the barrier set up of the dominant players with substantial research and development investments, being early in the market are well positioned to stifle the growth of the new entrants.
Dominant operators like the MTN,Glo and Celtel in the GSM market and starcoms, Telkom-Muiltilinks in the CDMA market had established a presence in the market place, build brand equity and created an excellent distribution network. Also, a peculiarity of telecoms industry is that the quality of service is primarily determined by coverage. Having evolved over time, the first entrant's(MTN) network usually has much better coverage. The customers become used to enhanced coverage over time. So new entrants have to invest significantly to achieve this same coverage, an effort that is capital intensive and time consuming. All new networks have initial bugs that take time to fix. Subscribers are just not willing to go through another learning curve, when there is already a robust supplier of service. Another frequent constraint is access to property to build the towers, since the first entrants have already seized the ideal sites for coverage but Visafone will be leveraging on the extensive branch infrastructure of Zenith Bank to roll out while Alheri and Etisalat can opt for Co-location services of Helios Towers. But in the absence of these bail outs, the late entrants may require to invest larger amounts in network infrastructure to gain similar coverage. Given these hurdles, it can take two to three years before a challenger achieves coverage competitive with the incumbent's.
In addition to coverage and related quality of service, another huge barrier to entry for new entrants is the issue of number portability. The NCC has been making efforts and educating the dominate operators on number portability since they will most likely serve as the donor network while the late entrant will most likely be the recipient network. The success of number portability depends on the ability of the donor network to perfect the processing of the subscriber in a turn around time or hence the subscriber becomes frustrated while attempting to join another network while keeping his number.
The inherent advantages to being first in the Nigerian telecoms market are control of ideal sites; freedom to evolve and fine-tune network coverage; building of brand loyalty by offering superior customer service; locking in customers by subsidizing equipment for an extended period under fixed-service contracts, and gaining control of key channels of distribution.
Late entrants do also have its own advantages if they are able to learn from the pit falls of the dominate operators in offering a superior level of customer service, deploying new technology, so that a new entrant can offer similar or better service at a lower cost, the new entrant may also develop a new way to access the market, with an innovative distribution strategy and may simply be pricing aggressively, targeting selected segments by taking advantage of the incumbent's tendency to average pricing across all segments.
While the dominant operators do have their own advantages, so do the late entrants. They are coming with latest technology and more knowledgeable about the end-user experiences of that particular market. Examples abound of Telecoms operators that moved from late entrant position to dominant players by getting it right. Orange, successfully established its self as a dominant player from a late entrant in the British Market and Globalcom, did same too in the Nigerian Market.
I wish Visafone,Alheri,Etisalat and Nigomsat (If eventually awarded a license) an interesting journey into the fastest growing telecoms market in Africa!
Emmanuel Okoegwale
emmanuel@gomobileng.com
Thursday 6 March 2008, 2:38 PM
Mobile Marketing Africa - April 2008.
The African Mobile Marketing & Advertising Summit is the foremost event of the year dedicated to communication and loyalty on the mobile in the emerging markets. With the huge growth of mobile communications in Africa, this event will be bringing together advertisers, communication agencies, content developers, and mobile service providers.
Estimates for the value of the mobile marketing market vary from $2billion - $11.5 billion by 2011. What is certain is that this industry is growing, and growing fast. By attending the first annual African Mobile Marketing & Advertising Summit 2008, delegates will learn how to take advantage of new revenue streams to drive growth in mobile data usage and generate highly profitable advertising revenue.
The mobile industry is gearing up for one of its biggest challenges to date and now is the time to make sure that you position your organisation to take advantage of the opportunities available. You will hear case studies from operators, big brands, advertising agencies and content providers to enable you to maximise revenue from the value chain.
This insightful Conference will roll out the powerful and state-of-the-art technology campaign strategies and tools in reaching customers and building brand awareness through mobile marketing.
There has never been a more important time to position your organisation with the mobile marketing value chain.
Learn powerful campaign strategies and techniques straight from the foremost international and local experts that will help your brand connect with the continent's over 200 million mobile phone users.
Visit www.mobilemarketingafrica.com for more information.
Emmanuel Okoegwale
emmanuel@gomobileng.com
Tuesday 4 March 2008, 2:04 PM
Developing Nigerian 3g Mobile Content.
These are interesting times in the Nigeria Mobile Market turf. Glo and Mtn are enagaging themselves to establish dominance with product and commercial launch of 3G.At any oppouurtunity,both network providers are quick to market 3G with promises of what it can do.
Looking from what obtains presently with Wap, gprs and other multimedia services usage level presently in Nigeria, it will not be out of place to show concern about how operators intend to develop and drive usage of 3g which is highly content driven.Though some of the contents might run too on present networks but are best experienced on a 3G because it offers more for media bandwidth intensive contents.
Countries that made headway in 3G presents a very good example of what we should be emulating. Taiwan is an example of 3G success. Taiwan with Nokia’s help, set up its first mobile services development centre with focus on developing 3G mobile contents and services. Now, 3G is already well established with opportunity to experiment with rich diversified services offered by the technologies.
Revenues from 3g services come from two sources, the traffic generated by content and charges for content itself. According to UMTS forum, by year 2010, total operator-retained revenue will be over 300 billion dollars for generated 3G services. Nigeria 3G market should be well aligned and positioned to benefit too.
The Nigerian regulator, NCC, should bring together industry players to pursue strategic content initiatives and bring to market, innovative 3g content and services. The NCC should aim to bring operators together and chart a way forward thereby accelerating the adoption of the technology. The target audience should be mobile operators, application developers, content providers, content aggregators, systems integrators and equipment vendors. The national regulator will play a vital role in content development by working closely with privately owned IT and telecoms training institutes, research and development centers, to develop curriculum that will address the upcoming opportunities and thereby reducing capital flight through content that are offshore developed or foreign owned.
The objective is that since downloading or streaming of video content is the main driver of 3G usage and to attract subscribers and enterprises to use this technology, the NCC should put incentives in place for the development and launch of new 3g content and services that fully exploit the capabilities of the 3g platform.
The success of the 3g will increase the demand for mobile data services and thus leading to higher 3G usage which leads to higher ARPU’s for the mobile operators. NCC need to start sensitizing content providers on the following services that can be money spinner for 3g,namely, online multimedia, gaming, multimedia messaging, video chat, mobile matchmaking, multimedia content delivery, surveillance, remote monitoring, mobile marketing and location specific information delivery services.
For the mobile operators, in the real business sense, 3g is important but nonetheless secondary. Voice remains the cash cow and killer application on the networks presently. They will need to develop an investment program whereby it will develop strategic investment opportunities with content aggregators and providers. They should invest in and partner with innovative content providers to develop innovative content distribution channels, mobile communities and other rich content that was not previously possible in a 2g world. Operators need to target all market segments, though some may not generate revenue as much as expected but what is important is to create an entire environment where mobile phone is used for a variety of purposes.
The choices open to operators is to either develop in-house content, therefore becoming providers of bundled lifestyle content with the advantage of big brand tie –ins. Second alternative is to work with independent content aggregators but without the advantage of brand tie-ins because most content developers tend to reach out to more than one operator for same content. The reason is not far fetched, present revenue share propositions will definitely be a disadvantage in the highly content driven 3g market.
A transition to 3g service will mean that phones have ceased being mere communications devices and will have taken on many of the characteristics of the rich content technologies like cable and internet. While government supports the development of innovative new communications services which provide access to the internet, mobile TV and Video clips, and the content services may also potentially carry offensive or harmful content and there will be need to ensure appropriate safeguards are in place to protect under age persons from exposure to such harmful contents. Safeguards might just be similar to those in place for traditional media.
Finally without operators investing in the appropriate infrastructures and taking a more holistic view of the content marketing function, the content on offer will unlikely engage subscribers and build the desired levels of demand. The whole world is watching if Nigerians will take advantage of the multi billion Naira Nollywood industry to develop Nigerian centric content for the Mobile phone market.
emmanuel@gomobileng.com
Private message disabled
