Wednesday, September 1, 2010

Decline in Umbrella Operators in Nigeria

The Nigerian mobile network has grown significantly since awarded the Global System for Mobile Communications (GSM licence in January 2001, began operating in August).

Before the (GSM) launched in August 2001, ownership of mobile phones was the exclusive preserve of the rich and the well connected in the Nigerian society, and nine years after, the growth of the telecom sector is unmatched by any other in the country. It has recorded phenomenal growth both in terms of subscriber’s base and infrastructural developments.

However, Umbella Operators in Nigeria often called by some as Commercial Telecoms Operators (CTO) are continuously declining despite the increase in subscriber data base witnessed in the telecoms industry.

Umbrella operators were seen all over the places and it seemed as the only business that yielded instant profit, but as time passed by, this same business started declining and one could hardly locate them unlike when the business started initially.

Speaking with some of the Umbrella Operators in the bussiness, most said that they make profits in making calls compared to selling of cards. The decline according to them is as a result of having less profit in the business compared to when the GSM operations started in the country. Most of them are using the business to sustain themselves temporarily despite the low profit margin.

From there various responses I gathered that there is no forum or association representing this body of operators in the country, which is actually resulting to the decline in interest of individuals who would have ventured into the business. Ordinarily, the average Nigerian would think that the consistent increase in the subscriber base of over 77 million would affect the commercial telecom operators in Nigeria.

Speaking with some of the distributors in this business, they observed that the numbers of patronage from the umbrella operators has declined. According to them, “we usually have queues in our various outlets, and we make up to N10m per day of sales, but now we don’t have these queues any longer and we now make N2.2m of sales per day”.

The distributors said that most of them in the country sell below the agreed price from the GSM operators in other to keep their clients. This they said is done secretly to please the GSM operators in other to get some incentives from them. According to them the major sale is made from the sales of MTN and ZAIN now BHARTI AIRTEL recharge cards, while adding that the inconsistency in price of the recharge cards has also made most distributors to decline in the business.

From the Gsm and CDMA operators point of view I observed that it is as a result of low tariff plan given to customers to enable them make voice calls and also the adoption of new technologies in the system that has enabled them serve their customers more efficiently.

With the new technology, users can be able to recharge their phone lines without going out to the commercial telecoms operators by using their credit cards to buy recharge cards online while also having the choice of various tariff plans on voice calls. Most users also communicate via chats especially those using the BlackBerry and other Smartphones which can perform this same functions which has shifted the direction from less of voice to more of data.

Below are the list of recent prices that the distributors sell to the Commercial Telecom Operators

Price list

100 ---------------------------------------------N96.00
200 --------------------------------------------N192.00
400 --------------------------------------------N384.00
750 --------------------------------------------N720.00
1500 ------------------------------------------N1440.00

Bharti Airtel
100 --------------------------------------------N96.00
200 --------------------------------------------N192.00
500 --------------------------------------------N485.00
1000 -------------------------------------------N975.00

100 ---------------------------------------------- N94.00
150 ---------------------------------------------N140.00
500 ---------------------------------------------N475.00
750 ---------------------------------------------N715.00
1000 -------------------------------------------N950.00

100 ------------------------------------------N94.00
200 --------------------------------------------N191.00
500 --------------------------------------------N476.00
1000 -------------------------------------------N950.00

100 ----------------------------------------------N94.00
200 --------------------------------------------N189.00
500 --------------------------------------------N472.00
1000 -------------------------------------------N950.00

200 ---------------------------------------------N190.00
500 ---------------------------------------------N475.00

100 ---------------------------------------------N96.00
250 --------------------------------------------N238.00
500 --------------------------------------------N475.00
1000 -------------------------------------------N950.00