Globacom and Nigeria’s telecom revolution by Michael Jimoh
By Michael Jimoh
It boggles the mind when you consider how much this 19-year-old indigenous institution has been able to achieve in a country where the prevailing sentiment is that things never work. From the moment it commenced operation in 2003, Globacom has never looked any way but up. It is still rising. It is not only glowing with pride, as one of the company’s copies boast, it has become a popular brand and assumed something of an iconic status to Nigerians very much like Coca Cola to Americans.
We’re not saying it has the same international clout and reach as the almighty Coca Cola Company. No! It is their shared identification with their places of origin. Mention Coke anywhere in the world and people know its provenance. Mention Glo anywhere in parts of the West African sub-region (Benin Republic, Ghana, Togo) and people know its provenance.
Like Coca Cola, it is privately owned. Even so, the same way people identify Coke with America is just the same way others identify Glo with Nigeria, down to its preferred corporate colour used in most of its commercials and promos. Famous Nigerian faces have featured in many of their commercials and promos, from the Nobel laureate to dozens of Nollywood stars, musicians, comedians and sports men and women who have been, or are still, cultural ambassadors, thus lending a wholly Nigerian theme to a Nigerian brand.
Before it came on in 2003, two telecom companies – MTN and Econet – were already on the scene, preceding Globacom by 24 months. They were foreign-owned and both were literally scalping Nigerian subscribers. Buying a SIM ran into several thousands of naira. The accompanying handsets by both companies were also expensive. Even the supposed well-off class griped about poor services and outrageous billings by the two foreign companies.
But there were no alternatives, just MTN and Econet. So, if you wanted a handset at that time, you had to go to them compulsorily and shell out as much as N24, N35k for a SIM-card and phone – be it a Nokia, Sony or even Huawei.
Nothing hurts more than someone ripping you off, shafting you steadily from day to day, week to week, month to month for two years and you are unable to do anything about it. So it was with millions of Nigerian subscribers at the time. It was a collective hurt Nigerians felt but could do nothing about – until Globacom arrived the scene.
Glo, as it came to be known and better appreciated, was wholly Nigerian, founded by mega-businessman, Otunba Michael Adenuga. For the third “born” in the nascent telecoms sector, it was, as they say, an idea whose time had come. Globacom hit the ground running and to the delight of millions of Nigerian subscribers – for good reasons.
Mr. David Mark, under whose tenure as Minister of Communications the groundwork for GSM began in General Sani Abacha’s regime, infamously declared that phones are not meant for the poor, that it will be so expensive only the rich (counting himself among them) would be able to afford. Mark’s insouciant remark turned most Nigerians against him and was roundly criticized for it. But to MTN and Econet, it was like an unsolicited promotional ad by none other than the Minister of Communications himself.
What did they do? They priced their products and services higher than most annual salaries following the minister’s cue. MTN and Econet loved it and so made millions at the expense of Nigerians.
For Nigerians who like to show off their latest acquisition, especially the relatively new gadget, it was something of a privilege to own a functioning handset. Compared to the sleek and handsome sets today, they were mostly bulky and un-fanciful, complete with radio antenna resembling the walkie-talkies of yore. Nevertheless, Nigerians bee-lined it to the offices and outlets of those two, snatching up SIM cards and phones at outrageous prices.
MTN and Econet were on a roll from then on, making oodles of cash in the process. Worse still, they priced them out of the reach of the poor, just as the minister suggested, thus denying a larger percentage of Nigerians what should be an essential handy gadget. There was a subtle hint at class division then suggesting that those who could afford it were in a different class by themselves (the haves) and those who could not (the have-nots) were somewhat lower. Owning a handset then was a measure of your worth, especially by those who couldn’t afford to.
Once in a while mankind finds itself at a turning point in its history, a bind majority of Nigerians found themselves in those early years of telecoms. They needed a messiah. But where would the messiah come from? Who as going deliver them from the stranglehold of MTN and Econet?
“I will build a car for the great multitude,” Henry Ford, founder of Ford Motors, famously boasted. He saw it through and so started his auto industry from a steel mill in Michigan. Thus did Ford Motors take on its own life and the auto revolution began in earnest in America. Something similar was soon to happen in 2003, what has now been dubbed the telecoms revolution did not actually happen until Globacom entered the market if we take into account the full meaning of a revolution?
How did he do it? Much of the answer has become the stuff of legend in the history of telecoms in Nigeria. To understand it better, we turn to a charming piece written by Toni Kan, a Globacom staff, on Otunba Mike Adenuga’s 69th birthday last April. “Every time the story of Glo’s emergence in Nigeria’s telecommunications sector is told,” Toni Kan asserted, “the raconteurs always seem fixated on Glo’s disruption of the industry with the crashing of the costs of acquiring SIM cards as well as its introduction of the per second billing which the earlier players had claimed was impossible.
“Many analysts consider the disruptive move as no more than a clever marketing gimmick but in focusing on what was seen as gimmickry they fail to reckon with what has over the years become apparent as Adenuga’s unique approach to business.
“In throwing his hat into the telecom ring, Adenuga seemed clear that it was to be in the service of the common people of Nigeria who had been denied access to telecom services. In putting the People first he was living his brand Purpose of offering Nigerians a service that would help them access the information super-highway and thus place them in pole position to rule their world. This was at the heart of Globacom’s enormous investments in the Glo1 cable which earned the company the endearing sobriquet Grandmaster of Data. Glo’s crashing of the SIM price and introduction of per second billing have since become modern business marketing case studies but for the discerning observer, they were statements of intent from a people-oriented businessman.”
How true! Inspired or not by Ford’s vision of building cars for multitudes, of making average American families own their own automobiles, Adenuga’s dream for Globacom followed that business strategy.
Though a late starter in the telecoms sector, Glo’s 55million subscribers alone in Nigeria says much about the success of the people first approach. Put people first or make them count in any business enterprise and you’re as good as made. The founder of Ford Motors was at one time the richest man in America. Adenuga is reputed to be the second richest man in Africa, according to Forbes’ latest rating.
One of the greatest advantages of capitalism is that it encourages and drives competition and, in so doing, brings out the best in people, products and services. Just imagine if there was only one or two operators in the telecoms sector today? Nigerians of a certain generation still remember those days of NITEL. With the privatization of telecommunications, MTN and Econet were first on the field. True, they provided better services than NITEL but they also made Nigerians subscribers feel they were doing them a favour for which they should remain forever grateful even though they were paying through their noses for it.
With the advent of Globacom, Nigerians got to know you could become a subscriber without necessarily having to invest a month’s income to acquire one. Buying airtime was even cheaper, N50 naira at one time. There were other marketing strategies the latecomer introduced and adopted that caught on with millions of subscribers across Nigeria.
This is the much-talked about telecoms revolution wrought singlehandedly by Globacom without firing a shot. It may be a combination of his entrepreneurial drive as a typical Ijebu man and his years in the US where he read and obtained an MBA. Faster than putting your finger to a keyboard, other telecoms companies reduced their charges for almost every service they provided and previously charged higher for. It was not hard to see why. Millions of subscribers turned to Glo who had shown that the impossible was possible to the chagrin, most probably, of the board of directors of rival companies.
To stay in the flow, MTN and Econet beat down their prices, from SIM cards to calls, SMS and much else. It was as if Adenuga had come to show them the way this kind of business is done. Today, Glo is as much a household name in Nigeria as MTN and Econet now Airtel after several reincarnations and as it turns 19, the proudly Nigerian company is glowing with pride and more than certain to glow brighter/ better as the years go by.