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Why France’s Orange Telecom investing in Nigeria in 2020 will not make a big difference

The prospects of France’s largest telecom operator, Orange, making an entry into the Nigerian telecom market has been in the news. According to reports, an entry within months is being explored by Orange Telecom. I call the operator Orange Telecom, partly because it was formerly called France Telecom, and partly because it makes for an easy way to distinguish between the operator and any references to other oranges.

Expectedly, there is a lot of excitement in the air. There are those who believe that this could be a game changer. I am not one of them, and for good reasons. My position is that Orange Telecom coming into Nigeria won’t make much of a difference in the industry. Any foreign direct investements into Nigeria will bring some benefits, no matter how little. Which is why you must bear in mind that my position is about whether Orange will make a big splash or impact or not. Shall we?

Orange Telecom in Nigeria

What Will Orange Telecom Do Differently In Nigeria?

Let’s begin with the popular argument that Orange could come in and disrupt the market with an industry game-changer the same way Globacom did when it introduced per second billing (PSB) after its launch years ago. Did anyone else notice that Etisalat came in, with its huge Arab war chest, after the per second billing disruption by Glo, and nothing big happened? I did. I noticed. As a matter of fact, Etisalat Nigeria struggled badly in the market.

Why was Etisalat unable to pull a disrupting stunt like Glo did? The per second billing disruption was possible because Glo took advantage of a gaping hole in the market that was deliberately left there by the first movers, ECONET Wireless and MTN. It was an early mover problem, and that problem, as well as other early mover problems, have since been plugged. That age is past.

It Is An Uphill Struggle From Here

Any new operator has to struggle its way up the hill now. Smile is struggling. Ntel is struggling. They are not GSM networks, but the principle is the same. Which reminds me of all the buzz when news of the entry of Smile, and later Ntel, broke. Nigerians saw them as saviours, who would free them from the hands of expensive and poor Internet services from the Big 4 mobile operators. But what happened? The new entrants barely made a splash and are still struggling years after. And not much has changed in terms of quality of service.

What is Orange Telecom going to do differently if it invests in Nigeria’s telecom market – manufacture mobile Internet out of thin air? Dash out free calls to subscribers? The latter is certain death. Existing network oparators are already complaining about loss of voice revenue to Internet calls and instant messaging.

Job Creation?

Yes; the Nigerian economy will benefit from the foreign direct investment that an Orange Telecom entry would bring in should it happen. The country needs the money. But will it create lots of new jobs? Not likely. It isn’t likely to be anything massive by way of job opportunities, because chances are that Orange Telecom are going to invest in an existing operator, not create one from scratch.

So, let’s say Orange invests in 9mobile, with a majority holding, and decides to rebrand. Millions of naira will change hands for the rebranding exercise – artwork/design/printing, as well as PR and marketing via the various media channels. That is something. Some extra money moving through the economy injects some life into the country.

Perhaps a few extra direct and indirect jobs are created. Perhaps some layoffs will happen, as they almost always do when a new entitiy takes over an existing one.

Conclusion

Let me summarise the situation: should Orange Telecom come, they would arrive to face the very same challenges that existing operators on ground have been facing. Nigeria’s big problem is the severe lack of infrastructure, and that deficit has not been addressed. Orange will operate in that same environment. Then there are the taxes – multiple taxes, not to mention outright extortions.

Nigerians are better off waiting for the second coming of Christ than waiting for Orange Telecom to come save them. We are always looking for a saviour, when our problems are due to severe infrastructural deficiencies. Orange Telecom is welcome, of course, but their coming won’t create any massive change in the industry. It will be mostly business as usual.

Follow me on Twitter where I am @Moverick.

References

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