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A global market research company operating in Nigeria,TNS-RMS, highlights factors that will drive change in the country?s telecoms industry in 2013, writes DAYO OKETOLA writes
A number of developments will take place in Nigeria?s telecoms industry this year, going by the predictions by a global market research firm, TNS, which operates as TNS-RMS in the country. Firstly, TNS-RMS predicts the entrance of a new network operator into the Nigerian telecoms space.
According to the firm?s report on the expected changes in? Nigeria?s telecoms market in 2013, made available to our correspondent on Monday, the new operator will ride on the sale of the moribund Nigerian Telecommunications Limited, expected to be completed this year.
?There is every possibility that if NITEL?s assets are sold off at the rock-bottom prices proposed by relevant government officials, the transaction will provide any interested and discerning telecoms operator the requisite platform to come into the Nigerian telecommunications market space and compete favourably,? the report says.
But against TNS-RMS predictions, many industry stakeholders had recently stepped up campaign against the sale of the entity, calling for its repositioning with new investments.
?TNS RMS also predicts increase in competition and fall in prices.
Industry analysts say the recent slash in ?off-net? SMS tariffs by the Nigerian Communications Commission is a pointer to what will happen in 2013.
In view of this, the Regional Director, West Africa, TNS Connect & Telco Clients, Mr. Seyi Adeoye, says a high-level? competition will? likely weaken prices in the telecoms industry in 2013.
According to him, the pressure on telcos? revenue will further be sustained with increased use of VOIP platforms and other OTT offers.
He says the price reduction gimmicks being used by telcos may soon be over while fast-forward innovation, intelligent market segmentation, profiling and targeting become veritable tools in the hands of any telco that wants to succeed.
He says, ?When you want to see the future of the mobile market, take a look at Scandinavia. This is the region with the most competition, the lowest prices and the highest phone concentration. In Denmark, one month of mobile voice and data equals the price of a large pizza and a two-litre bottle of cola.
?In Nigeria, over the period to 2014, the increasing number of users will dominate the impact of price increase.? However, beyond 2014, increasing saturation of mobile phones will mean that continued price reductions will not lead to sufficiently large increase in user numbers to offset the impact of the price reductions.?
Adeoye says the Mobile Network Virtual Operator model, which was developed in Denmark, can happen sooner than expected in Nigeria.
MVNO is a network provider that does not own radio spectrum or wireless network infrastructure, rather it goes into agreement with an existing mobile network provider to obtain bulk access to network services and then retail same to end users at cheaper and highly competitive rates.
?MVNO is also a real possibility within the Nigerian market space. Despite current QoS issues, the installed capacity of GSM operators in Nigeria is only about 56 per cent utilised, leaving room for MVNOs to snap up idle capacity. If this happens, it will disrupt the competitive landscape of the Nigerian telecoms market,? Adeoye said.
The NCC had in December, 2012 commenced infrastructure-testing for the proposed Mobile Number Portability initiative with eyes on April 2013 for likely take-off.
TNS-RMS says this will further increase the level of competitiveness among the current operators with direct impact on products and service pricing.
Adeoye also says telecoms operators in the country will either have to accelerate innovation and diversify or lose their market share.
He observes that competition in the Nigerian telecoms market remains aggressive with over 70 per cent penetration level. Though the industry is still growing, Adeoye believes the tempo will be significantly reduced amid declining prices.
The immediate priority for network operators, according to him,? is the need to accelerate diversification of revenue streams; adding that it will help reduce churn rates and increase Average Revenue Per User.
He recommends possible areas of generating revenue to include online commerce, educational services (learn foreign languages, public contents, and university exams), video/audio streaming, mobile TV, cloud services, storage apps, content streaming, mobile money, and mobile advertising, among others.
Also commenting on factors that will drive change in telecoms industry in 2013, the Chief Executive 0fficer, TNS, West, East and Central Africa, Mr. Adeola Tejumola, says provision of data services has been clearly labelled as the next revenue frontier for mobile operators in Nigeria. He, however, observes that not only GSM operators are interested in capitalising on this trend.
He, therefore, submits that the rise of Wi-Fi networks represents one of the key defining changes in the country?s telecoms landscape in 2013.
He says, ?There has been recent emergence of data-only networks with focus on providing mass access to broadband Internet service, using WiFi platform (802.11 x standards) at very affordable prices or packages. An example is Oxygen Broadband Networks now servicing the entire Computer Village, Lagos in partnership with Main-One Nigerian and Loop21 Mobile Net, a WiFi hotspot software development company in Austria.
?This scenario is creating headlong competition between these networks and mobile network providers within the country,? he observes.
Tejumola also identifies Nigeria?s rising middle income consumerism as one of the key drivers of change in telecoms industry in 2013.
He says, ?Although the African continent has always had a modest middle class, made up mostly of government workers or others tied to the ruling elite, the middle ranks have begun to expand in recent years with private sector employees. They include secretaries, computer gurus, merchants and others who by virtue of education, geography or luck have benefited from economic growth of around six per cent annually in such countries as Uganda, Ghana, Nigeria and Kenya, and approximately eight per cent in Rwanda.
?The Nigerian middle class is expanding and fuelling growth in Africa?s most populous nation. They also are spawning the advent of new services such as fertility treatments, online retail stores, auto workshops and funeral homes. To them, it?s all about lifestyle. Middle class Nigerians would ideally make up the mid value telecoms segment and a significant part of the high value telecoms segment.?
According to him, 80 per cent of the Nigerian telecoms market revenue is within these two spend-brackets.
?There would be need to develop a unique engagement model for this class of Nigerians hinged on enhanced personalisation of mobile products and services and context based marketing,? he adds.
The report concludes that quality of service will continue to be significant change driver in the Nigerian telecoms industry.
?Recent heightened market activities characterised by price cuts, new product offers and innovative services have broadened options before the customer; who in return raised the ?Expectation Bar?. Ease of connection and call clarity are now crucial and could easily turn to a pain point (thus encouraging multiple sim use, value-erosion and outright churn).There is need to monitor closely customer satisfaction, understand clearly the levers and maybe evolve these into some sort of Performance Score Card,? the report adds.
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Source: http://www.punchng.com/business/technology/2013-change-elements-that-will-shape-telecoms-industry/
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