Afrigather When Globacom launched in August 2003, it entered a crowded telecom market, two years behind giants MTN, Econet, and MTEL. Regardless of this, it shortly made an impression with daring strikes, positioning itself as a severe competitor. By pioneering per-second billing—not like the ₦50-per-minute norm—it instantly disrupted the market, forcing rivals to observe swimsuit.
If per-second billing was a game-changer for the trade, Globacom pulled off one other stunt in October 2004 by providing free SIM playing cards—undercutting rivals promoting theirs for ₦2,000. This aggressive value struggle was solely attainable for a late market entrant, and Globacom backed it with hefty advertising campaigns, signing Nigeria’s largest celebrities as ambassadors.
By 2004, lengthy earlier than different Nigerian telcos acknowledged that information, not voice, was the trade’s future, Glo had begun providing 2.5G web service to 70,000 subscribers. By 2009, it had landed a 9,800km submarine cable in Lagos, exhibiting the depth of its ambition to attach Nigerians to the web. “We received the individuals speaking,” stated one in all its adverts.
Globacom raced to early success, and plenty of Nigerians recognized with the primary native telecoms firm with catchy adverts. Nonetheless, because the enterprise grew, it misplaced its revolutionary DNA and struggled to take care of the momentum of its first eight years.
The trail to say no
Regardless of its early success, Globacom now looks like an organization in decline. With its market share all the way down to 13% and simply 19.1 million subscribers, the once-innovative chief now grapples with stagnation. Hypothesis has mounted for years that Nigeria’s telecom subscriber numbers—217 million in early 2024—have been inflated. Business insiders believed the dearth of clear guidelines on counting subscribers who had been inactive for as much as six months allowed telecom operators to pad their numbers.
A current audit and the rule that establishing 90 days of inactivity because the clear baseline by the Nigerian Communications Fee (NCC) has helped make clear points. As a result of these new guidelines, Globacom was required to recount its lively subscriber base, shedding 40 million subscribers who have been inactive within the final 90 days. Whereas rivals MTN and Airtel additionally shed a couple of million lively subscribers, they’re now the clear market leaders with 78 million and 53.7 million lively subscribers, respectively.
Globacom’s status for unreliable service has harm progress. A significant cyberattack in August 2023 uncovered buyer information to unknown hackers and went unreported for a yr, exacerbating the reputational injury.
Company tradition and governance points
One month after the hack was reported, the privately held firm named a brand new CEO and board of administrators in October 2024 after some stress from the NCC. In line with two firm insiders, it’s the first time since 2003 that somebody exterior Mike Adenuga’s household will management the corporate.
As Adenuga’s management entered the 2020s, Globacom’s status for innovation had been undone, leaving a picture of an organization hampered by a one-man paperwork.
“It’s run like a one-man enterprise, and the whole lot runs as much as Mike Adenuga. They’ll’t take any choice with out his approval,” stated one individual near the enterprise.
That individual claimed a number of of Adenuga’s firms share the identical staff, blurring the traces between the companies.
Telecom executives and analysts spotlight a decade of underinvestment and weak company governance as vital components behind Globacom’s decline. As soon as a frontrunner in innovation, the corporate’s tradition shifted, stalling progress and resulting in mounting operational challenges. Telecom regulators have principally seemed the opposite method with points related to Globacom.
Its curious tradition could have value the corporate extra, with one trade supply claiming Globacom was poised to enter a possible partnership with telecoms firm Orange after the French firm expressed curiosity in a Nigeria enlargement. In the end, the transfer didn’t materialize.
Regulatory and monetary challenges
As the one native telecom firm in a market dominated by international gamers, Globacom has loved a leniency that trade gamers have questioned. Regardless of owing MTN Nigeria ₦3 billion in curiosity on interconnection charges for 15 years, Globacom settled the debt for ₦2 billion with out dealing with vital penalties.
This penchant for indebtedness additionally extends to distributors and companions
“They don’t pay Worth Added Providers on time, they don’t pay interconnect charges on time. It’s the similar factor they do to companions; they won’t pay till 180 days,” stated one individual conversant in the corporate’s operations.
Not less than two different distributors which have labored with Globacom prior to now ten years claimed the corporate has a status for late funds.
This reliance on Adenuga, who’s broadly believed to be the corporate’s sole financier, is believed to be linked to a perennial underinvestment within the firm.
“To be vital and ship the precise service, you in all probability want $1 billion in capital expenditure yearly,” stated Bolaji Balogun, CEO of Chapel Denham, who helped execute the $1.67 billion sale of Econet Wi-fi to Celtel in 2005, stated at a telecom occasion in August 2024.
In contrast to different main operators, Globacom doesn’t outsource its over 8,700 towers to firms like IHS; as a substitute, it builds and maintains them with international technical consultants.
“The price of working these towers alone is gigantic, protecting vitality, safety, neighborhood engagements, and personnel prices,” stated an trade knowledgeable.
Infrastructure-heavy sectors like telecoms require ongoing funding to take care of service high quality. For instance, you’ll be able to have a submarine cable, however with out deploying terrestrial cables to achieve particular person customers, connecting towers with fiber cables, and constructing extra towers the place wanted, the community will wrestle.
The necessity to regularly enhance high quality can be why MTN and Airtel are investing in information centre infrastructure. Whereas each firms began out with utilizing present information centres, they’re now constructing their very own information centres.
Past infrastructure, Globacom has made little funding in its Fee Service Financial institution (PSB) licence, acquired in 2020, leading to stagnant progress for the service. In the meantime, MTN and 9Mobile, with related licences, have added hundreds of thousands of customers to their cellular cash platforms..
The longer term outlook
There are worries that Globacom might go the best way of 9Mobile, one other telco that had a flying begin earlier than funding troubles and several other possession adjustments left it the trade’s sick man. But, many consider Globacom has the capability, a submarine cable that’s a big income stream, and a nationwide operator licence that enables it to launch a variety of choices.
With a brand new CEO and board and further regulatory scrutiny, it’s attainable to arrest Globacom’s slide.
“The brand new NCC EVC is concentrated on reworking Glo’s strategy, and the fee is invested in seeing Globacom function otherwise within the trade,” one individual on the NCC who declined to be named stated.
Globacom didn’t reply to a request for feedback.
The consensus amongst trade leaders is that Ahmad Farroukh’s keep as CEO will probably be short-lived. It highlights a disbelief that Globacom’s proprietor will be capable of keep out of the enterprise and one other current actuality: solely a dedication to the brand new company governance construction and a return to revolutionary methods will pull Globacom again on the trail of progress.
