1. T-MOBILE MARKET PLAN
FOR ENTRANCE INTO THE NIGERIAN
TELECOMMUNICATIONS MARKET
BY
ALASO LAWRENCE KRUKRUBO
MARKETING IN A GLOBAL AGE
EXECUTIVESUMMARY
2. T-Mobile is a key global player of international telecommunication services as a
solution provider of world’s besttelecommunication services and personal
digital assistant(PDA). Ithas over 150(Onehundred and fifty million)
subscribers in the United States of America, Europeand the United Kingdom. It
has achieved several enviable feats in both mobile and fixed
telecommunication operations worldwide. T-Mobile expansion into the
Nigerian telecommunication industry with outstanding services will provide
the Nigerian marketwith quality telecommunication products and services.
This marketing plan examines the external and internal environmentof the
telecommunication industry in Nigeria in relation to T-Mobile. Evaluation of
the political, economic, social and technological factors affecting the
telecommunication industry in Nigeria gives a better understanding of the
likely challenges and opportunities to affect T-Mobile which it has no control
over.
TABLE OF CONTENTS
4. DeutscheTelekom AG owner of T-Mobile commenced business in 1990 as a
solution provider for wireless PDAs and mobile communication services with
150 million customers worldwide. Theneed to improvethe quality of products
and services of mobile telecommunication and internet services all over the
world propels T-Mobile to pursuethe strategy of market development. The
poor telecommunication servicegiven by serviceproviders in Africa, precisely
Nigeria is the drivebehind T-Mobile’s internationalisation into the African
market. Nigeria has a population of over 200,000,000 predominantly workers
and entrepreneurs. GSMin Nigeria began in the year 2000 with 588,374
combined subscribers of allGSM operators. This figure increased by over
3000% to 19,519,154 subscribersby year end 2005. Theprojected growth rate
for 2011 is 14% compared to its growth of 19% on 2009 (Business Monitor
International, 2011)
2.0 ENVIRONMENTAL ANALYSIS
A company’s environmentinclude external factors outsidemarketing that
affect the marketing management’s ability to effectively connect with its target
customers (Kotler, Keller, Brady, Goodman and Hansen 2009).
2.1 PESTEL ANALYSIS
Political/Legal factors: Thesearethe extent to which a government intervenes
in the economy. In 1992 theNigerian Communication Commission (NCC) was
promulgated and by Section 10 (a) NCC Decree of 1992, NCC was authorised to
issuelicence to any person or persons wishing to provideand operate public
mobile communication thereby allowing private participation into the industry
and competition. This provision of the law allows T-Mobile entry into the
Nigerian market as a telecoms serviceprovider. However the NCC continually
squeezes unrealistic deadlines and control measures into the operations of
telecommunication serviceproviders in Nigeria.
Economic factors: The fluctuating interest and exchange rate of the Nigerian
naira will hamper the free flow of operating activities of T-Mobile. As at 16th
December 2011, theexchange rate of the naira was: £1 =N251 and $1 = N161.
The exchange rate of the Nigerian naira will affect the price of goods T-Mobile
may haveto importinto Nigeria in the courseof their business.
5. Socio-cultural factors: TheNigerian telecommunication market is extremely
sensitiveto price. A small risein the price of a serviceor product, can lead to a
huge drop in the averagerevenue per user of the network that increased its
price. Price wars do exist in Nigeria, when competition gets stiff in the GSM
market.
Technological factors: With the faster pace of technological changeand influx
of modern mobile phones, telecommunication serviceproviders haveto
improveon the services they provide to meet with the demands of their
subscribers for thelatest mobile phones. For instance with the introduction of
Blackberry into the market, telecommunication serviceproviders, in order to
retain their marketshare, had to upgradetheir equipment and technological
access to enable their subscribers usetheir blackberry phones. Failureto
upgradewith the latest technological requirements of a mobile device would
result in the telecoms serviceprovider losing its competitive advantage in the
industry.
2.2 SWOT ANALYSIS
STRENGHTS
-Superior personnelquality
-Highly skilled human resources
-Wide bouquet of smartphones and
PDAs
-Strong international brand name
OPPORTUNITIES
-growing number of revenue earning
customers in Nigeria
-large demand population of over
200,000,000 peoplewith only
91,000,000presently activeusers.
WEAKNESSES
-unfamiliar with high structuralcost
areas like Nigeria (country with low
infrastructureand epileptic power
supply)
-Cultural clashes between the African
way of life and the European style of
business.
THREATS
-No patent protection in by the
Nigerian government
-Exposureto crude marketing tactics
in the Nigerian telecoms industry
-Insecurity in Northern Nigeria (Boko
Haram) and in the South (Militancy)
-Severalanti-competitive activities like
Price wars and counterfeiting
Figure 1:SWOT Analysis based onJohnson, Scholesand Whittington(2011)
6. T-Mobile has a strong brand identity through its logo and ring tone composed
by Lance Massey. T-Mobileis branded for its innovativeprice strategies and
flexible contract plans to suitdifferent segments of the society.
2.3 COMPETITION ANALYSIS:
There are 5 players in the Nigerian Telecommunication industry; theseare
Mobile Telecommunication Network (MTN), Airtel Nigeria Ltd, Globacom
Nigeria Ltd, Etisalat Nigeria Ltd and Mtel.
Figure 2:Market share of Mobile operators basedon NCCMarch 2011
Given that MTN and Globacom are the two major competitors in Nigeria, it is
important that T-Mobile understands their modus operandi and peculiarity.
MTN is perceived as a very strong brand in the Nigerian market. Ithas a very
aggressivemarketing team across Sub-Saharan Africa. MTNhas a wide
bouquet of products and services. However MTNcustomer care serviceis
below expectations and expensive international calls tariff.
Globacom is perceived to be a truly indigenous GSMoperator. They were the
firstto introducethe revolutionary Per Second Billing (PSB) in Nigeria. The
brand is often associated with mouth-watering freebies and value added
services to customers. Theweaknesses includepoor customer service, poor
data servicewith cut throatinternational calls tariff.
48%
24%
19%
9%
0.10%
Market share
MTN
Globacom
Airtel
Etisalat
Mtel
7. 3.0 MARKETING STRATEGY
T-Mobile strives to remain one of the world’s leading telecommunication
companies with its strong brand name. In order to achieve this, T-Mobile will
focus on the strategic directions of market development and diversification
(Johnson, Scholes and Whittington. 2011). By marketdevelopment, T-Mobile
will be entering into a new market (Nigeria) with its existing products. By
Diversification, T-Mobile will develop a new product(cheap international calls)
to a new market (Nigeria) along with its products and services. Thesestrategies
will enable T-Mobile gain a competitive advantagein the Nigerian
telecommunications industry.
3.1 MARKETING OBJECTIVES: T-Mobile objectivefor entering into the Nigerian
telecommunication industry is to be the most loved brand in the daily lives of
Africans by providing the best and most affordableand reliable telecoms
serviceto all segments of the society. Itaims to attract and retain five million
revenue earning customers in the two years in Nigeria by 1st
January 2013 by
providing world class mobile solutions, most competitive tariffs and new
productdevelopment for the varying segments.
Societal objectives of T-Mobile include education on safeenvironmental
behaviour in Nigeria. Through the phone recycling programmeof T-Mobile,
consumers can recycle old and damaged mobile devices and get paid for doing
so. To protect human health fromradioactive waveT-Mobile operates its
network at acceptable radio wave limits of 9W/m2 for its 2G operating
frequency of 1,800MHz and 10W/m2 for 3G operating frequency of 2,100MHz.
3.2 MARKETSEGMENTATION:
T-Mobile is targeting the corporateorganisations and the individual customers.
The corporate organisations aretargeted, including the small and medium
scale enterprises, as they have the resources to purchaselargenumber of
products and services for their employees. The individual customers will be
segmented into the university aged students (19-25yrs), theworking class (26-
36yrs). T-Mobileconcentrates on this segmentation as the university students
are more attracted to technological devises and havestarted part time work as
8. to purchaseand fund their use of the mobile device. The working class group
have more resources to acquire latest mobile devices and more susceptible to
acquiring expensive phones that they do not need justto show off and feel a
senseof achievement amongst their peers.
3.3 MARKETING MIX
Product: T-Mobile products and services to the Nigerian society include mobile
phones, high quality wireless telecommunication service, mobile and home
broadband service. These products willcome in different packages of Sim only,
Phone and Sim package, Mobile and home broadband service(Dongleand
landline internet connections). All mobile phone being sold by T-Mobile will
include one year warranty. T-Mobilemobile services will be on Pay-as-you-go
or pay-monthly and focused on lower international calls.
Price: The products and services are targeted at all segments and classes in the
society. Incentives for subscribers during the3 months promotionallaunch
campaign include 10 free shortmessageservices (sms), free20 minutes calls
between T-Mobile subscribers. Therewillbe discounts in tariff for phone calls
made between subscribers of T-Mobilefor the Pay-as-you-go subscribersafter
the promotionaltime period and for the corporatesubscribers,calls between
the samecorporatelines will be free to enable communication between the
workers of the same corporation.
Product Subscriber Price
Pay-as-you-go Top up denominations
fromas low as N100,
N200, N500, N750 and
N1,000
Pay Monthly Mobile phone and sim
services for as low as
N1,000 monthly
Corporatesubscribers -5 sim and phone service
at N8,000 monthly (40
free sms, 40 minutes
free talk time)
-10 sim and phone
serviceat N10,000
monthly (80 freesms, 60
9. minutes free talk time)
Broadband mobile Free for corporate
subscribers
Broadband mobile (Pay-
as-you-go)
N1,000 monthly
Broadband Dongle Pay-as-you-go
Broadband home N3,000 Monthly
InternationalCalls 80 kobo per minute
Figure 3:Projectedprice list of T-mobile Nigeria Ltd
Promotion: T-Mobile will adjustits promotion or advertising strategy to
changes in consumer perception in the Nigerian GSM market. The Nigerian
market is unique and a One-Size-Fits-Allmarketing approach will definitely fail.
A more decentralised and regionalised approach will be employed in adverts
and promotions. Theseshould reflect the culture and way of life of the target
region. As part of its advertisement campaigns, T-Mobile will be using
marketing tools like abovethe line communication such as electronic media
and bill boards. Internetand digital marketing will also be done via the
company’s website. Printadvertisements will be done through national and
local dailies and popular magazines in Nigeria.
Place:T-Mobile’s penetration into the Nigerian telecoms marketwill startin all
in Nigeria. The corporateheadquarters will be located in Abuja, the capital of
Nigeria. With offices and wide coverage masts located strategically in all state
to give total coveragein each state, T-Mobile aims to gain strategic and
competitive advantageby being the telecoms company with the widest
coveragein Nigeria
Physical Evidence:T-Mobile servicecentres worldwideoffer mobile phone
solutions to our esteemed customers in a friendly and professionalmanner at
all times. The Nigerian offices will be at the same international standard with
serene environment, calming pink and white colours of T-Mobile.
Process: With self-help aids, customers do not have to queue for several
minutes to resolvetheir issues. T-Mobile websites will provide places where
complaints and enquiries can be lodged even before the subscriber comes to
the T-Mobile offices, if they wish to so do.
10. People:T-Mobile staff will be sourced fromthe local communities in each
state. This will enable T-Mobile reach the subscribers on a familiar basis.
Customers will feel understood and comfortable when being attended to by
persons fromsamegeographicalzone as them. Periodic training of staff will be
given every 4 months to ensurethe standard of customer serviceprovided is of
the highestquality and up to date with recent developments.
4.0 FINANCIAL PLANS AND FORECAST:
There is an assumption that T-Mobile will make a loss as a new company
coming into a new environment becausethere arealready established
competitors in the industry already and it will take for the people get used to
the company and its products. Given the recent economic recession, there is a
substantialreduction in consumer spending. Please see Appendix A for
projected financial forecast.
5.0 METRICS AND IMPLEMENTATION CONTROLS
Metrics and implementation controlmeasures will be implemented by T-
Mobile to ensurethe quality of servicedelivery and the effectiveness of
strategic decisions of the company in attaining its objectives. These control
measures will enable the company ascertain whatadjustments to be made in
terms of the sales volume, revenue, productnature and cost. To a certain the
effectiveness of its strategies, T-Mobile marketing managers will conduct
periodic surveys via questionnaires to its customers. Customers willbe
contacted via email and text messages (fromthe customer database) and also
T-Mobile shops to fill questionnaires regarding the quality of the products and
services rendered by the company in the courseof achieving its sales and
marketing objectives. Recording of all calls made to the customer carelines will
ensurethe quality of servicedelivery does not fall below international
standards.
11. 6.0 CONTINGENCY PLANS
Due to the volatile natureof the Nigerian economy, it is imperative that T-
Mobile provides contingency plans to enable it maximize any opportunities
that may arise. These plans include pricing strategy to counter competitor
strategy change and unforeseen recession of the economy.
7.0 CONCLUSION
The future of T-Mobile is unpredictable. There are already established mobile
operators in the market with strong competitive sense. The political stability of
the country is still in doubt as earlier stated in the SWOTanalysis. The
possibility of growing and gaining market sharebased on its international
reputation and internal capabilities is high. The strategy of product
development with cheap international calls will place T-Mobile in a
competitive advantagein the telecommunications industry in Nigeria. The best
strategy for T-Mobile is to stay flexible in order to take advantage of any
opportunity that comes out in the industry and also react to any negative
unforeseen circumstances that may occur in the courseof carrying out its
operations in Nigeria.
12. REFERENCES
Business Monitor International(26th
July 2011) Nigeria Telecommunications
ReportQ3 2011 [online] available on
<http://www.marketresearch.com/Business-Monitor-International-
v304/Nigeria-Telecommunications-Q3-6468093/>[18th
December 2011]
Johnson G, Scholes K, & Whittington R, (2011) Exploring Corporate Strategy
(9th Ed) FT Princeton Hall London
Kotler P, Keller K, M Brady, Goodman M, Hansen T, (2009) Marketing
Management(1st
Ed) Pearsons Education Ltd
NCC (2011) MarketShare of Mobile Operators(March 2011) [online] available
from<http://www.ncc.gov.ng/industry-statistics/industry-data.html>[18th
December 2011]
Nigerian Communication Commission Decree 1992
13. APPENDIXES
APPENDIX A
FINANCIAL FORECAST OF T-MOBILE NIGERIA FOR THE FIRST AND SECOND
QUARTER OF YEAR 2012
Quarter 1 Quarter 2
Expenditure
(N ,000)
Profit
(N ,000)
Expenditure
(N ,000)
Profit
(N ,000)
Sales 8000 9150
Cost of Sales 3282 3850
Gross Profit 4717 5300
Expenses
Web site
development
780 500
Launch
Marketing
1000 850
Administration 1650 1875
Distribution 930 1193
Other
expenses
650 1008
Total Expenses 5010 5426
Loss for the
quarter
293 126
