Prior to the advent of GSM in 2001, phone penetration was low to the point of being negligible. Nitel had the monopoly. But all that changed with the GSM revolution brought by the licensing of Econet, Mtel, MTN and the later entry of Glo and Etisalat into the industry.

At first, all that was needed for marketing success was availability. Because the demand for a phone was far more than the supply, these companies were on a roll, snapping subscribers after subscribers from phone starved Nigerians. That has since changed. The landscape is becoming more competitive and the growth rates of yesteryears are becoming hard to replicate. In a nutshell, continued success in the contemporary Nigerian GSM market calls for marketing wizardry.

Despite the figure being brandished by NCC, the Nigerian telecom market is reaching saturation point. Most of the new lines being activated are purchased by people who already own one or more phones. An additional phone line does not translate to increase airtime usage; in fact, the reverse is mostly the case. The mobile industry ARPU (Average Revenue Per User) in 2003 was around $54 per month but as at December 2008, it has fallen to $13.

So how are the major players in the Nigerian telecom industry facing this reality?

MTN

It is the undisputed market leader in coverage, revenue and subscriber base. This is easily attributable to MTN’s marketing savvy.

Effective differentiation and positioning are the biggest determinants of marketing success. And MTN is a master of the craft, exemplified by its product and service actually owning values — real and perceived, rational and emotional in the consumers’ minds. And their possession of these values and meaning in the consumers’ minds (beyond primacy of product) has enabled them to successfully differentiate themselves.

Coverage

That was the original competitive advantage of MTN. In the early years of GSM in Nigeria, while its main competitor – Airtel (then Econet) was mired in management crisis, MTN was building capacity and adding town after town under its coverage. After which it started covering all the major highways in the country. And having achieved broader coverage than its competitors, MTN quickly reflected this in its positioning statement — changing its tagline from the best connection (a generic and daft tagline) to everywhere you go.

It then followed logically that if you want to be able to use your phone wherever you may be in the country, you have only one choice: get connected to MTN.

Reliability

This message is subtly embedded in the company communication message. It is really doubtful whether MTN has a more quality network than its competitors, but that is not the issue. The issue is that MTN was smart enough to take advantage of an unexploited positioning opportunity. The result is that MTN owns the word reliability in the customer\’s mind.

Leadership

This is largely a quantitative issue. With over 40% of the market, the leadership position is a given. And coupled with its association with coverage and reliability, MTN’s leadership is unquestionable.
The result? Decreased price sensitivity. MTN’s charges are about the highest in the market, yet the company still adds more new subscribers than its competitors year after year. This is just one of the benefits MTN is enjoying from its supremely high brand equity.

HOWEVER……
For MTN to continue to enjoy its position, it must become even better in its marketing. Leaders lose when they make mistake in their marketing strategy. MTN’s market success was helped by the mediocrity of its competitors’ marketing. And it would be naïve of MTN to expect a continuation of this state of affairs.
And most especially, MTN needs to know that as much as your brand equity gives you price premium, in an industry like telecoms, it is only for a time. This is because as the number of offers within a category multiplies, the differences between them start to become increasingly trivial and loyalty to the best value replaces any previous loyalty to a brand.

Airtel

A confused brand.

There are only a few brand mis-management graver than that of Airtel Nigeria. On August 5, 2001, Airtel became the first telecoms operator to launch commercial GSM services in Nigeria. In its first two years of operation in Nigeria, the company was running neck to neck with MTN for the leadership position in the industry. But a deluge of management crisis led to its loss of momentum. This situation was further compounded by the perennial identity change of Airtel – five times in the last couple of years. Econet, Vmobile, Celtel, Zain, and Airtel.

All these factors make the job of managing the brand a challenging one. Unfortunately, the company’s marketing has been average at best.

Positioning

What does Airtel stand for?

What associative cue does the name Airtel evoke?

To me the answer is confusion. This sad state of affairs is not only the result of perennial identity change; it also results from poor product management strategy. Airtel has so many products in the market that it is very difficult for a prospective subscriber to know the one that is most suitable for him.

The way to build a strong brand is having a narrow focus and owning a word in the mind. Because Airtel lacks any meaningful differentiation, it will always realize meager results from its marketing. The result has been that Airtel has had to compete on price.

Now, if being the low price provider is Airtel’s value proposition, (let\’s leave the appropriateness of this strategy for now) then the smart thing for Airtel is to convey it in all its messages and in everything it does. This, Airtel has failed to do.

It is not all gloom for the brand. Airtel needs to first take stock of its marketing asset and devise ways to get the optimum result from them. For instance, survey after survey has shown that Airtel is perceived as a most customer-focused company. But Airtel seems oblivious of this great marketing asset that if properly utilized can pay a huge dividend to its brand. This, coupled with its low price could form the nucleus of Airtel’s positioning strategy. And a brand perceived as customer-centric will always enjoy market success.

GLO

If there is any company whose entry into the Nigerian telecom industry was greeted with great anticipation and expectations by the public, it was Glo. This was due to:

The huge publicity that accompanied the story of how the company won, lost and fought to re-win operating license from NCC. The company came at a time Nigerians were becoming increasingly disgruntled by the high cost of GSM service.

And Glo did not disappoint. At least initially.

It won wide market acceptance and goodwill by launching its service on per seconds billing (i.e. the prevailing practice then was per minute billing whereby even if your call terminates after one second, you still pay for the full minute). It also priced its sim cards cheaper than what was available in the market thereby ensuring that more people had access to its service. And it paid off. Despite being a late entrant into the market, in a little over three years, GLO captured about 25% of the Nigerian GSM market. Unfortunately, the company marketing since then has been mediocre and wasteful.

Effective marketing involves much more than overpriced ads and flashy celebrity display. Yes, celebrity display. If there is any marketing practice Glo is known for, it is her unprecedented use of celebrity endorsement. But celebrity endorsement as a core brand building strategy is simply stupid (except in some industries like lifestyle, cosmetics, and fashion). Another marketing practice associated with Glo is sales promotion. In fact, it is an inside joke in the Nigerian marketing community that Glo doesn’t do marketing—it does only promotion. The problem is, you don’t build a brand by sales promotion—you only build temporary sales.

Glo probably has more marketing assets (at least potentially) than its competitors. Exploiting just one or two of this is enough to leave competitors gasping for breath. For example:

Glo is the only Nigerian owned GSM brand– this means its profits are kept in Nigeria…..(though this might not be the best positioning strategy for a company with international aspirations)

Glo is the first single company to build an $800 million high capacity fiber optic cable—this huge investment shows GLO’s belief in and commitment to Nigeria and its resolve to provide its subscribers the highest quality service. In other words, Glo has the most claim to the word quality in the customer\’s mind.

The potency of these assets is that they could be used to connect with the market on an emotional level. All that is needed is a good positioning strategy. But that, for now, is what is lacking in Globacom.

ETISALAT (now 9Mobile)

Had Etisalat entered the Nigerian telecoms market earlier, it probably would have attained market leadership by now. The reason for this is not farfetched: Etisalat is simply the most creative marketer in the Nigerian telecoms industry.

Etisalat’s market entry strategy is the most well thought out I have seen in Nigeria. First, the company recognized it was coming into a developed market which means it would have to gain customers from the existing providers. And to overcome this uphill task, Etisalat started by first identifying the singular reason people find it difficult to change their GSM service provider even when they are dissatisfied with the service they are getting—which is that changing provider will mean changing phone number, (i.e. there is no sim convergence in Nigeria) a daunting and inconvenient prospect.

This, Etisalat addressed by asking people to choose any phone number they want. And people did. Choosing numbers that are similar to their existing numbers. As a result, Etisalat gained hundreds of thousands of subscribers even before it launched its services! and Etisalat’s subsequent marketing has equally been brilliant.

Segmentation and Targeting

here Etisalat performed better than its competitors. For example, it effectively targeted the young population with the Easy clique, a product that resonates well with that market segment.

Promotion

Etisalat has become the trendsetter in the industry as far as meaningful sales promotion is concerned. In fact, its competitors have been reduced to copying its promotions.

But, despite all the above, Etisalat still needs to improve its marketing. What the company needs most at this stage is a deepening of its subscriber base. As much as brand building is vital, at least equal if not more attention should be devoted to sales building marketing.

If there is anything that all these tell us, it is simply that the old school of marketing is still the only school that counts: know your consumer. Segment and Target accordingly. Position specifically by ensuring that your brand stands for something clear, important and differentiating.