What’s behind Orange’s decision to suspend entry into Nigerian Market?
By Joseph Ekeng
Until recently, there were some quiet whispers that telecommunication giant Orange was going to make an entry into the Nigerian market.
In preparation to make the big decision, the company last year sent a delegation to survey the Nigerian market and meet with relevant stakeholders.
But Orange has said that it will no longer move forward with the investment plan, at least for now. But it didn’t rule out the possibility of a future entry.
This was revealed by the Chief Executive Officer, Middle East and Africa, Orange, Jerome Henique at the Mobile World Congress Barcelona, Orange Middle East, and North Africa.
So what could be the reason for the u-turn?
According to Jerome, there was a lack of market conditions. He explained that after it carried out a market survey, it concluded that the conditions were not right for investment.
Jerome also alluded to the fact that the price of success in Nigeria will be too high given that Nigeria already has four established operators. So, displacing any of the top four would be an uphill task and would require a major investment.
Jerome explained further that seeing the enormity of the investment it is expected to make in Nigeria in terms of acquiring an operating licence, investment in infrastructure and so on, Orange would need to be among the top two players if it must be profitable.
But given the strength of the other operators, it would be a tough goal to accomplish.
But while the Nigeria plan may have gone south, the company is already taking serious steps about expanding to Ethiopia. The East African nation’s government is looking to sell off a 40 per cent stake in state-owned Ethio Telecom.
Jerome said that Ethio Telecom is a strong incumbent that has been “transforming itself quite impressively” since the arrival of competition from Safaricom Ethiopia.
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