Telecommunications firm 9mobile has projected that it will require about $3 billion in the next four years to reposition its operations in Nigeria.
The management of the firm, in an online interaction with the media on Saturday, said there have not been any major investments into the firm in the last eight years.
Leading the team, the Chief Executive Officer, Femi Gbanigbe, said that despite the challenges, the firm remained upbeat and ready to take the market by storm in 2025.
“Now, as you all know, 9mobile has the weakest coverage in the market as far as 2G, 3G, and 4G are concerned. If we were to compete favourably, as we used to do, and as the traditional telecoms business requires, we would need to invest about $3 billion over the next four years in order for us to have a chance of catching up. The traditional model requires us to spend about $3 billion, which can be translated in today’s currency to about N4.8 trillion,” Gbanigbe said.
Checks by The Guardian showed that about five years ago, 9mobile boasted over 13 million subscribers. However, between then and now, the figure has plummeted, with the Nigerian Communications Commission (NCC) data showing that the firm currently has about 3.4 million subscribers and a 2.15 per cent market reach.
Gbanigbe, who is confident in the new investor in the firm, explained that the total telecoms industry generated N4 trillion in revenue in 2023, with an expected revenue growth to N4.5 trillion in 2024, when the results are released.
He further explained that out of the N4 trillion generated as revenue in 2023, 9mobile had just 2.4 per cent in market share.
“I am confident that our investors can raise the required amount to turn around 9mobile, but the challenge is how we guarantee payback and over what period we need to guarantee the payback.
“I cannot go into the market to borrow money, even in local currency, because I will have to pay around a 30 per cent interest rate. So, my challenge is not necessarily securing capital. My challenge is, how much of that capital do I want to consume and invest, knowing that I also have the responsibility to pay back the investment capital in a shorter time horizon?” Gbanigbe further said.
To address the challenge, the firm, he said, has adopted a new mantra: “to build infrastructure where I must, and to share infrastructure where I can.”
Addressing the issue of telecoms industry sustainability and the call for tariff hikes, Gbanigbe said the telecoms industry has contributed immensely to Nigeria’s GDP and the entire digital economy of Nigeria over the last 20 years.
He, however, said that such contributions from the telecoms industry were possible because the industry was experiencing impressive growth, which, he said, must be maintained for industry sustainability.
“So, even though the industry is growing in its top-line revenues, the rate of growth of local revenue is not commensurate with the rate of growth of the cost base that we have. So, when we speak about industry sustainability, what we are saying is that every business must be in a position to generate revenue that can cover its costs and also give it the opportunity to reinvest back into the business.
“So, if we do not generate enough revenues to cover our costs, we’ll have to resort to borrowing either from shareholders or from the capital market, and this will not lead to sustainable growth,” Gbanigbe said.
He explained that should the industry continue this way, it will not be sustainable at some point, “because it will be impossible to continue to borrow without having any line of sight to paying back what we have borrowed.”
