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The never-ending twists and turns involving beleaguered GSM operator, Emerging Markets Technology Services (EMTS) – operators of 9Mobile – took another turn as Teleology Holdings Limited (run by Adrian Wood) has pulled out from Teleology Nigeria (the consortium of investors that bought the telco). What led to the pullout according to 9Mobile was non-fulfilment of its part of the contractual obligations.

This is after Teleology became the preferred-bidder after the network was put up for sale – as a result of its default on a $2.1 billion loan from a syndicate of Nigerian banks – and had also fulfilled all requirements.

It should, however, be noted that, despite several reports about the NCC’s final approval of the sale, there is yet to be any official confirmation of same from the regulator.

In view of same this article seeks to highlight five areas of 9Mobile’s business that will require urgent attention to turn the network’s fortunes around in the shortest time possible, and to ensure maximum returns on the inevitable (and significant) capital investments that will be injected into 9Mobile to achieve these objectives.

5 key areas Teleology should focus

As with any telecommunications network, the name of the game for 9Mobile is to achieve strong EBITDA margins. This is necessary to ensure that enough free cash flow is generated for reinvestment into network assets. Traditionally, network operations have been characterised by strong revenue growth from core services – driven by a large subscriber base – as well as controlled operating expenses, culminating in high net margin percentages.


However, with decreasing revenues from voice and SMS services due to the proliferation of over-the-top (OTT) platforms that provide the same services via internet protocol, the business models of network operators are undergoing a reconfiguration.

This is the context in which the new owners of 9Mobile must rebuild.

To achieve strong network subscription growth and robust service revenues in the shortest time frame, 9Mobile must focus on, and invest in, the following five key areas:

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  • Service Quality
  • Network investment
  • Digital Services
  • Enterprise Services
  • Marketing

Service Quality

9Mobile’s total subscriber is peaked at almost 22 million at the end of 2016, continuing the strong year or year growth demonstrated over the prior three year period. This consistent growth was in spite of the fact that the network charged higher prices than its competitors across all its services.

Subscriber acquisition was primarily driven by the network’s reputation for high quality voice/data connectivity – despite its higher price points – and increasing customer dissatisfaction with other operators. Such dissatisfaction stemmed from a variety of issues ranging from high dropped-call rates and unsolicited SMS marketing, to poor customer service.

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However, as at the end of 2017, 9Mobile’s total network subscribers had dropped to just over 15 million – including a loss of over 4 million subscribers over a 6 month period. To quantify such subscriber losses in financial terms, based on an ARPU of around $4.50/₦1,620, that means over ₦6 billion in revenues was potentially lost by the network. Surveys have shown that the network’s service quality significantly dropped after the exit of the prior owners which was the main cause of the subscriber exodus.


By quickly restoring consistent delivery of high quality voice and data connectivity – thereby regaining its reputation as a high quality network provider – 9Mobile can reclaim a significant portion of its lost subscribers based purely on loyalty to the network stemming from extended periods of customer satisfaction.

It will be difficult, however, for 9Mobile to again attract a significant number of new customers simply on the basis of their dissatisfaction with other networks. This is primarily due to rectification of the other networks’ operational deficiencies resulting from increased regulatory scrutiny.

Consequently, 9Mobile’s focus – in terms of its B2C activities – should (continue to) be on the youth segment of the population, particularly those in regions of the country with low teledensity rates; and strategies built around targeted products/services that cater directly to youth demographic segment need to be quickly developed.

Network Investment

The second key area on which 9Mobile must focus is network investment. To achieve the above discussed service quality significant capex – ranging from 30-40% of total revenues on average – must necessarily be (re)invested in network equipment and capabilities. Thus the bulk of any capital to be invested in the company by the new owners must necessarily be allocated to address these concerns.


Moreover, market data (both domestic and international) points towards significant increases in demand for data – based on the fact that the bulk of all network activity in the market is related to internet access and usage.

Research from Ovum predicts telecoms data revenue to grow at a CAGR of 25.1% between 2016 and 2022. Additonally, non-SMS data only accounted for 16.4% of mobile revenue in Africa in 2016, but is expected to rise to 47.5% in 2022.

All network providers in the Nigerian market have already witnessed healthy growth in their respective data revenues – at a rate of 20% on average. This in turn has been one of the primary drivers of growth in their overall service revenues, notwithstanding, consistent declines (of 4 – 7%) in revenues from their core voice and SMS services.

The other side of the coin is that for a network operator to capture the increasing demand for data, and by extension revenues from same, significant capital expenditures are required to optimise the operator’s capacity to satisfy this demand by constantly investing in the maintenance and upgrade of the network infrastructure.

So, for 9Mobile to ensure that it is able to attract a significant amount of subscribers over the short term and sustain such growth, it is imperative that the EMTS focuses heavily on its network investments. Additionally, 9Mobile should target its network investments predominantly towards maintaining and increasing its 3G, 4G (LTE), and W-CDMA capabilities. This is despite market leaders increasingly focusing on 5G roll outs. 3G & 4G-LTE network capabilities are still the most important network infrastructure in a developing market like Nigeria. This is certainly the case, at least until deployment of a critical mass of broadband fibre optic connections across the country by the infrastructure companies (Infracos) that have been licensed for this purpose.

As a side note, with the rising costs associated with traditional network infrastructure, innovative operators are increasingly finding ways of integrating cloud technology into their services for not only lower costs but also provide their own branded OTT services. This may be something for the management of 9Mobile to also consider.

Digital Services

Digital services have brought about a new frontier for network operators. Examples of such services include access to multimedia content, mobile financial services, healthcare (virtual care) and location-based or lifestyle services. 9Mobile’s competitors have seen significant revenue growth from this service segment, ranging from 15 – 25% annually on average, and with same forming an increasing proportion – predicted to reach as high as 15% by 2022 – of overall service revenues.

Although it is true that digital services generate lower margins for network providers, they also require much lower capex investment and such services, when properly executed, have proven to be a primary driver of net margins for African telecoms businesses over the last few years.

Given that revenues from core services such as voice and SMS are struggling revenues, digital services combined with growing data access and usage demand, will serve to significantly offset the decline.

Notwithstanding that data access/usage will be the main source of revenue-growth for operators, these revenue channels will not generate the necessary EBITDA for the required cashflow to invest in maintaining/upgrading network assets. This means that digital services – with much lower capex and cost profiles – can and should be the predominant means of driving subscriber and overall service revenue growth, as well as potentially becoming a significant source of revenue for an operator; including revenues that would be generated from outside the mobile network ecosystem.

Enterprise Services

Total number of mobile network subscribers in Nigeria have crossed 160 million, representing over 70% of the country’s population. Total internet subscribers are just over 100 million which represents almost 60% of the populace.

This shows that the mobile communications market is nearing peak saturation thus limiting the scope for future growth – based on traditional models and services. This means the only real growth opportunities for a network seeking to gain significant market share quickly – like 9Mobile – is in the enterprise/B2B segment.

While the consumer market is forecasted to grow by 0.6% on an annual basis globally, the B2B market is expected to grow by 2.6%. These growth projections are even bigger in developing markets such as Nigeria, with the largest opportunities predicted to be in information security, enterprise mobility management, unified communications, cloud services and analytics.

It is estimated that there are almost 10 million registered businesses in Nigeria – and a lot more than that when informal businesses are factored in. Currently, the total size of the enterprise market is under 1 million – given that total fixed/wired subscribers is just over this number and not all of those customers will be businesses.

Additionally, almost all of these businesses rely to some extent on data access and usage, with a growing number increasingly digitizing their models and operations. When one also considers the large and equally growing number of new entrepreneurs, with data-hungry businesses that are almost completely reliant on internet connectivity, then the opportunities become even clearer.

By developing innovative, solution-driven services for Nigerian businesses, 9Mobile could quickly find itself as the leading network provider in this segment.


As EMTS focuses its investments in the forementioned areas of focus, such efforts must equally be matched with significant expenditure on promoting 9Mobile’s services and targeting its marketing communications appropriately.

Key activities must include extended televsion/radio advertisement campaigns and programme sponsorship; powering strategically beneficial national events/initiatives; endorsement of celebrated personalities; social media advertising campaigns; and partnerships with local communities and/or institutions that work with the target demographies.

Naturally, 9Mobile will also have to develop attractive promotional offerings in the short term to acquire an initial base of new subscribers. Innovative (low cost-large data) promotional packages and zero-rated service bundles (such as data-free use of social media or entertainment services) will quickly need to be developed and heavily marketed in an extended all media campaign.

Another concern of key importance that will be addressed by appropriate marketing investment is its effect on customer psychology. The more investment made in highly visible brand marketing, the more the public will see the network as a stable entity – an important psychological association that is desperately needed by 9Mobile in the wake of all its recent turbulence.


After a tumultuous year, with significant subscriber losses amidst debt troubles and ownership uncertainty, the first steps have now been taken towards the recovery of EMTS and its network 9Mobile; the steps being the achievement of financial and management stability.

What is now key for the management team is for an extensive review of the network’s current position in respect of the five above-highlighted areas, and appropriate statetgies developed and implemented to ensure the network immediately begins to recapture lost ground and gain additional market share in the shortest time period.

The telecommunications sector is currently undergoing rapid change, and this presents an basis for 9Mobile – as with its competitors – to adapt its business models and operations accordingly. 9Mobile may have suffered serious disruption of late, but given that the entire sector is also experiencing wider disruption from outside forces, a window of opportunity has presented itself for the network to capitalise on the shifting landscape by focusing on the five highlighted areas.

Olumide Mustapha (Esq. MIOD ACTI ACIArb BL(Hons) QSEW BA) is a Senior Partner at Technolawgical Partners – one of the leading Telecoms/Media/Technology advisory firms in Nigeria. He is a Corporate Lawyer, Business Analyst and Tax Consultant with specialised expertise in African Telecoms, Media and Technology sectors. He is a qualified legal advisor in both the UK and Nigeria and has over 10 years experience working with local and international clients in these sectors to sustainably grow their businesses. Follow Olumide on his Twitter account and Medium blog for regular legal, business, and tax insights related to the new Africa economy.

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