Etisalat is the most recent entrant into the mobile market here, but it has grown quickly; what strategies have made this possible?
We have had a much stronger focus on quality of service, and a better focus on the youth market and innovation. As the fourth to arrive, five-10 years after the other operators, we cannot do what everybody else has done. We set ourselves apart to convince people to leave their existing operators and join Etisalat, in addition to tapping into the new customers in the market. We are known as the data company and the company that young people choose. The combination of Abu Dhabi and Nigeria has worked well. I have to salute our foreign partners because, apart from the initial equity that they have provided, they provided the company with a significant proportion of shareholders loans so we have not had to rely on expensive bank debt as much as the other telecom companies have done.
How has the influx of lower cost smartphones and cheaper data reshaped the sector?
The data revolution was always going to happen. The more applications that become available, the more vital data becomes. Many thought that the size of that market would be constricted because of the expense of smartphones, but Chinese companies have reduced the cost of producing these handsets, allowing for the kinds of innovations that we are seeing now. It is not only Apple or Samsung or HTC in the market anymore. There is an entire range of phones capable of the same functions, from mobile money to innovations in the healthcare and education fields. I have just started working with a company called Bridge Academy that has developed text message-based education for the low-income segment, which would not have been possible without the use of mobile technology and inexpensive smartphones with built-in fiber networks. The broadband revolution has made all of these things possible.
What is the role of telecoms and investors in developing an ecosystem of innovation in Nigeria?
Our investments in telecoms companies are made to provide the opportunity to rapidly launch their products on our networks, in a manner that recognizes their contribution. We need to provide support as investors for the expansion of the business, and we need to take more risks investing in entities beyond our personal connections to ensure that in 10 years there are major scaled up African tech companies.
How does Etisalat aim to resolve the barrier presented by the unbanked population?
Nigeria has a tremendous amount of catching up to do, and much of that has to do with the regulatory environment. Kenya has moved faster than Nigeria because their regulations were more conducive to the development of mobile phone companies. Nigeria and the Central Bank have some concerns regarding the combination of the need for strong anti-money-laundering provisions and ensuring that risks are protected, while at the same time creating the openness mobile banking needs to develop to reach the broader population. Banks using the old branch and head office structure do not have the cost profile for bringing banks to rural regions. We have no choice but to change that model and the regulations so that mobile money can be used by the population.
Regulation and government policy has been a major concern for foreign investors. What is your opinion of the fine imposed on the MTN in the context of doing business in Nigeria?
The only thing worse than having too much regulation is no regulation at all. If there are no regulations, the business environment is not fair. If regulations are to be effective and taken seriously, strict sanctions will have to be applied for violation of rules and laws.
What are your expectations for the year ahead?
Etisalat, subject to the government taking action to ensure that there are fair competition rules, which have not been fair up to now, will have a good year. For Nigeria, I expect that in 2016 the government will begin to get a grip on some of the key problems facing the nation. It will be difficult for them to achieve a turnaround in the space of 12 months, so people should be realistic with their expectations. Next year will be challenging, but by 2017-18, we will begin to see the consequences of some of the key decisions they will take in 2016, and I expect that those will be positive.