TOP STORY

Glo has ambition to become a major West African player for both mobile and fibre

Nigeria’s Globacom has slowly been building itself a West African regional position, seeking mobile licences and trying to find more country operators to connect to its Glo One cable branching units. Russell Southwood talked to Globacom's COO Mohamed Jameel about its ambitions, LTE testing, mobile TV and Triple Play.
 
Q: What is the current state of the mobile market in Nigeria?

A: It is almost close to saturation. Operators are now very aggressive to do what little customer acquisition is left over. It’s crucial to hold on to your existing subscriber base so there’s a lot of focus on retention. A number of loyalty schemes will be started. The first indication of the situation in the market is the price war between operators. On-net rates are now down to 25-30 kobos on-net, although there has not been much done on off-net.

Reducing prices when the market is close to saturation will hurt operators. They will have to cut costs and prepare to take a financial hit. Investment revenues will be delayed. Once prices drop, usage increases and therefore you need a better network. It’s not a healthy model, especially in a market like Nigeria where costs are huge.

Q: How are your data sales going?

A: Computer penetration is very low but we’re catching up to a double digit figure so there’s good potential. Data is growing in a big way. There’s around 70,000-80,000 subscribers using 3G on their laptops and feature rich phones make up around 5% of our subscriber base. Lot’s of people are using our Blackberry services.

Q: You have announced that you’ll be testing LTE. When will you be implementing?

A: We’ve only just started testing but we’re the first in the market to do so. We’re testing 30-40 locations in Lagos and the speeds are impressive. Before we start the service, we will need to go to the regulator to get approval because we will have to operate LTE on a different spectrum. Currently we’re using a combination of GSM and 3G spectrum but when we launch, we want to use 2.1 or 2.6. LTE needs special handsets and modems and there are not available in the market right now.

Q: So what’s the timeline for implementation?

A: It will be the beginning of 2012 but modems will be available in Q3, 2011. I’ve no idea at this stage what the price will be. 3G customers are the same as LTE customers so unless handsets are available at a cheaper rate, uptake will be limited. It will initially be targeted at post-paid and business customers but two years down the line it will go out to all consumers. Initially, it’s a niche market, mainly in Lagos and Victoria Island or a remote factory location needing data. I can just plug in LTE near the BTS and it’s ready. Therefore in the next 18-24 months there will be a corporate product.

Q: You have a mobile TV service. How’s it going?

A: There’s not much happening. We’re doing DStv and you can get all channels. But you need a DVB-H phone and that costs N29,000 ($200) to use it. It’s very much a niche market. The number of subscribers will not be large because of the price of the handset. It’s very much a niche market and so the subscriber numbers are low. There would be opportunities if the price came down. In the North, people listen and watch a lot of  radio and TV to keep ahead of the troubles there. Because power is often scanty, they are left with battery powered radios. They could switch to live TV on their mobiles if the product was cheaper.

Q: The Glo One cable has landed but where is there service?

A: It’s live in London, Accra and Lagos. There’s lots of customers between London and Lagos for high-speed Internet. Ghana will start collecting customers soon.

Q: Where does Glo have licences outside Nigeria and what are your expansion plans?

A: We have licences in Gambia, Cote d’Ivoire and Senegal and already have operations in Ghana (not yet launched), Benin and Nigeria. Once all these are established, we will go to other countries, particularly countries where the cable has landed. We also want to get licences in 2-3 other West African countries. We have got 16 branching units on the Glo One cable and we’d like to take it to other countries, particularly landlocked country operators seeking licences where they can get a terrestrial licence. We have a licence to land in Cote d’Ivoire. And we’re also looking at the possibility of creating as ring between Accra and Lagos using a terrestrial route connected to the marine route of Glo One and of reaching Guinea on a terrestrial route.

Q: Where are you with the Senegal landing station for Main one?

A: We’ve already laid the 200 kms to connect and are in discussion with Expresso. We want to be the biggest gateway operator in West Africa and would like to dominate the international minutes market in the region.

In terms of getting the capacity inland in Ghana and Nigeria, either we will have our own terrestrial fibre or go into alliance with other cable operators on the ground.

Q: Where are wholesale bandwidth prices now in Nigeria?

A: Nigeria has been predominantly satellite because of the problems with Nitel so we had good expectations of price when we got connected. There are now 3 competitors (SAT3/Nitel, Main One and Glo One) and so prices took a beating, They were initially US$1,500-2,000 per meg per month and these are now down to US$400-500 at volume. Two more cables are arriving so prices will go down again.

We used to be 100% satellite but at least 15-25% of the market (including large volume customers like operators) have shifted to fibre. Others are in the process of doing so but some are waiting for contracts to expire. Some are still keeping an element for redundancy purposes. On international, we’ve switched everything to fibre and use satellite domestically for remote BTS, which is about 10-15% of the BTS.

Q: You have expressed interest in doing Triple Play in the past. Will you be doing it?

A: This has not happened. We would like to be a transporter, depending on content providers (to give us services).

Q: What about Fibre-To-The-Home?

We are already doing this in a small way to corporates but for households it’s still faraway in time terms, However, we are doing Fibre-To-The-Cabinet.

Q: Will Glo have an IPO or a private placement?

A: We’ve not taken decision and in the meantime, we will continue to finance ourselves to develop the network We are not averse to either idea but we will take a decision when the time is right.


Ghana Special: The state of the data market in Ghana (Web and mobile Internet)

Thomas Hesse, CEO, Explainer DC on the state of web development in Ghana

Praveen Sadalage, MD, Busy Internet on its plans to extend its new data centre in Ghana

Kofi Dadzie, CEO Rancard Solutions on the state of the mobile Internet in Ghana

Herman Chinery-Hesse, CEO,  the Soft tribe on creating Africa's eBay and payment systems

Derry Dadzie, CEO, DreamOval, on Motech, Cocao Link and mobile payment systems

Tweet  LinkedIn  Send to a friend  Share