Nigeria: Bane of CDMAs – Zoom Mobile Transformation in Perspective
There is no gain saying that players in the CDMA segment of the Nigeria telecommunication industry are facing challenges, partly caused by unfavourable policies and an uneven playing field. But Zoom Mobile has remained undaunted in the midst of all the uncertainties as it recently began a journey of transformation, writes Malachy Agbo
The CDMA segment (otherwise known as private telecom operators) of the Nigerian telecommunications industry has in relative terms underperformed in comparison to their GSM counterparts such as MTN, Glomobile, Airtel and Etisalat.
To put things in perspective, according to the ongoing SIM registration exercise as mandated by the NCC, there are about 110 million voice subscribers in the Nigerian market with the CDMA segment accounting for well below 10 per cent of this number.
All these challenges notwithstanding, Zoom Mobile which despite falling on hard times, beset with interconnect debts, threats of multiple issues with regulators, loss of customers, and many more, is now determined to position itself as a game changer in the industry.
The Board of Reliance
Telecommunications Company Ltd, the holding company that owns Zoom Mobile, in the past seven months, has taken bold steps to turn around the company’s fortunes and capacity, in order to take advantage of the imminent growth in the data market in Nigeria. Critical to this move is the appointment of Edwin Momife, a business turnaround professional who is not a stranger in the telecom and information technology sector both in Nigeria and overseas.
Industry analysts both local and international as well as the ITU have projected that there will be over 100 million data customers in Nigeria by 2016, making Nigeria a clear leader in internet usage in Africa.
The Zoom transformation team pooled together by Momife, the new CEO, seemingly portends a new and more successful future for the company. According to Momife, they have a mandate for complete and total transformation from a voice-driven business to a more dynamic data driven, customer focused provider, across much of the country, where they have coverage and transmission assets.
“The team today represents some of the best talents in the industry that has been carefully selected and boasts a broad skills set and competence in Nigeria and globally,” he informed THISDAY recently.
He further stated that the team is made up of Edgard A. Osuagwu the Chief Information Officer who comes with experience from Perot Systems, Microsoft, MTN Nigeria and lately Eco Transnational Bank; Tawa Bolarin, the Chief Commercial Officer who’s cut her marketing and product development teeth at Virgin Media, UK, Talk Talk Plc, UK, and until recently, MTN Nigeria via BT, UK. Others, he said, are Danielle Ogunpitan, who is in charge of the transformation office.
“Aside the new hires, we also retained some of the pivotal management team members such as Mr. Andy Ibekaku, Chief Technical Officer, who comes from Nortel US and Ego Obiegbunam formerly of Deloitte Akintola Williams, who is the acting Chief Financial Officer. There’s also Kerian C. Enechi, Company Secretary and Legal Adviser, who brings on board 23 years of critical legal and management experience,” he said.
Momife noted that the CDMA technology which the PTOs use, have underperformed lately because of both the market structure and internal challenges. “The initial restriction on their licensing to the provision of only fixed wireless services excluded them from the quantum growth enjoyed unimpeded for 10 years by the GSM operators that has made them so strong and cash rich. As such, the CDMA operators cannot muster the needed capital to offer alternatives in the voice market for the majority of the Nigerian consumers,” he said.
He further lamented that the interconnect regime does not favor the smaller players (PTOs) enough to succeed. “The annual operators’ levies were tilted to favor the larger operators as against the PTOs, they are all currently asked to pay 2.5 per cent of their annual turnover by the regulatory body. Again the PTOs did not have the wherewithal to arrange for a large financing framework to attract the needed capital to build out coverage for products and services that can compete effectively,” he said.
However, Momife remains very optimistic in his assessment of his company’s future, explaining that there is an opportunity for Zoom Mobile to grow full circle with the explosion of demand for internet services. “The dawn of Main One and other submarine cables in Nigeria has created a huge opportunity to deliver internet services at very attractive rates to all and sundry.
“The recent proliferation of smart devices like Google’s android based devices, Blackberry, Samsung’s Galaxy series, Apples iPad, and more, has generated more and easy access to the internet. The pervasiveness of the social networks such as Facebook, Twitter, BB messaging platforms have created a huge awareness to be tapped into by operators,” he said.
It is against this back drop, he noted, that Zoom Mobile has introduced its range of low cost, high quality smart android devices such as the ZoomBerry, Zoom PCs and Zoom Pads which are targeted at the youth and any other segments of the population with the desire to be online on the go!
According to the Zoom Mobile CEO, Zoom has started its transformation journey based on its internal change programmes dubbed the 4Rs – Re-Finance, Re-Connect, Re-Engineer and Re-Invigorate – with over 240 separate but related organisational change initiatives driven by its hit squad of top industry management team now handling the business.
“The programmes are all geared towards improving Zoom Mobile’s quality of service, operational excellence and will make their products more attractive to the customers, especially in meeting their needs. Zoom now has unlimited internet access at competitive prices for its customers,” he said.
According to him, the board under the chairmanship of Senator Annie Okonkwo, has mandated two financial advisory firms, Futureview Group and Primera Africa to raise additional capital and also work with a number of its major creditors to restructure its financial obligations to allow the new data-centric business model to flourish and succeed.
He said his mobile company has begun the reengineering of its network from a voice-based to a data-driven network and has commenced offering high quality data services in partnership with Main One. “This type of high quality broadband service will soon be available across 17 states of the federation where the Zoom network covers.”
Yet, he confessed that there are also challenges with respect to providing high speed, high quality transmission to deliver cost effective broadband services, of which Zoom and some of its partners will be making a strategic announcement on this in the very near future over a planned national solution to this problem and will expand Zoom’s capability in the carriers market.
“The jury is out as to the promoter’s capacity to raise the needed capital after single handedly funding the transformation thus far and also to allow this exceptionally talented work horses to deliver on these very good spirited ambitions. A possible restructuring of the shareholding of the company must be considered as well, if these are to succeed,” he said.
Momife goes on to add that “ZOOM has outsourced a range of its business areas to Huawei Technologies Nigeria on network management, while caliber networks, revenue assurance and fraud and interconnect management has been outsourced to Telecom Advisory Associates which is Africa’s leading practitioner in this sphere.
“Afrexim is also one of ZOOM’s major creditors that is working together with the team to complete a suitable plan on the debt refinancing. This process has gotten to a quite advanced stage and Zoom has already made some payments to Afrexim,” he said.
Momife added that that in line with the Central Bank of Nigeria’s cash-lite initiative, Zoom Mobile has entered into a high level partnership with Interswitch to execute its business effectively. “This will enable Zoom Mobile subscribers to recharge their voice or data plans seamlessly and in a cashless manner via ATMs, POS and the web,” he said.
According to him, when the company completes its transformation process, its business will be a game changer and a template for the CDMA transformation business in the country and also for further growth of internet services, e-commerce and ICT services in the Nigerian economy.