The story of 9mobile will be technically incomplete without carefully mentioning what led to it change of name sometimes in 2017. It should be recalled that after a long period of time battling to recover from a 1.2 billion bank loan, Etisalat International, the parent group, called it quit with her Nigeria partner, Etisalat Nigeria, ordering her to consider immediate rebranding. Ever since, staff and workers under the new formation confirmed things never remained the same.
Lots of stories, speculations and rumors are flying everywhere on the internet. Why this has attracted loads of interest from the public is perhaps because the old Etisalat Nigeria Company once prides itself as the leading youth telecom network. The world, particularly investors, workers and subscribers of the network are chiefly interested to know the narratives and are keen on following the roll of events. So much, in recent times, has been revealed and so much more seem would be uncovered with time.
In all of these controversies, there is this fear that 9mobile might end up like NITEL that slummed one night and never recovered. Borrowing from obvious reasons that have possibly led to the turnaround of event for 9mobile, analysts have identified fall in figures of data subscription, which was occasioned by loss of subscribers who left the network during the heat of controversies on the possible sale or likely ‘death’ of the service provider.
In business –especially in telecommunication, subscribers are the cord that ties success to business. Therefore, an increase in the figures will translate to a jump in the revenue turn over. Considering the case of 9mobile, it is clear that the fall in the number of subscribers had a dent on the big face of the company.
According to statistical figures, as presented by NCC, in December 2017 alone, the 9mobile recorded a loss of about 68,341 internet users. From this, it should be clear or ideas –at least can be made up to understand how the 5.5bn net revenue loss accumulated. Going by this significant 68, 341 drop in user base, there will therefore be an ultimate fall in the returns from phone calls, recharge unit and message charges.
When we talk about issues relating to insolvencies, bankruptcy and other financial challenges in big firms or organizations, researches, into the market, have shown that a number of factors may be responsible. In an interview with Dr Maku Olukayode, a senior lecturer from the Department of Economics, Olabisi Onabanjo University, Ago Iwoye, Ogun state, the economist and expert classified these factors into two categories. According to him, issues around financial challenges can be narrowed into internal factors and external factors. He carefully enlisted these factors, identifying management of finances as principal.
“Of course, many of financial challenges facing firms are predominantly ushered by internal and external factors. An internal factor has to do with manners with which firms manage their finances: how they manage their risk, inventory and how they define their competitiveness with other firms. It also has to do with their investment decisions and strategies, their financial leverages and their goodwill to the public.”
Shedding more light on the matter, the economist and lecturer added that these internal factors also include ways firms manage their capital structure, formulate capital budgeting decisions and distribute risk. In summary, according to his analysis, all these things are what we call comprehensive financial management within a firm. Considering the case of 9mobile, he however noted that there are also factors which are responsible for financial crises under obvious external factors. Here, he identified economic factor and submitted that this challenge influences the cost of production.
“There are also external factors –that are beyond the control of a firm. One of them is economic factor –the issue of recession, the meltdown and the state of infrastructure. All these things build on the cost of production.”
Going by his analysis, in economics, when the cost of production is over burdened, there is the tendency of a firm not to be able to meet the cost with revenue. The senior lecturer further explained that the fall/loss recorded is natural, noting that goodwill (patronage) from the public is never a commodity given cheaply but one that must be earned through piloting assuring and convincing operational modus that one’s firm can compete favorably with the existing market.
While responding on what category of factor was largely responsible for the loss in the case of 9mobile, Dr Maku Olukayode disclosed that the crises is a result of a marriage between internal factors on the side of the management and external factors threatening the brand just as confronted by other brands. For him, there is more to the internal factors which must be tackled for any progress to be recorded again by the network provider.
“Of course, the current crisis with 9mobile is a combination of the two –internal and external factors. We have companies and firms surviving in very hostile external economic factors. Mind you, this is only possible provided these companies harmonize their internal factors very well. Let me add, here, we equally have companies and firms that are in a very good external economic environment but because they cannot manage internal factors very well, they have issues. So, there is no external factor that can do the work of internal factor for any firm.”
Drawing the way forward for 9mobile, Dr Maku advised her management to consider reviewing her terms and redesign a framework that will sufficiently reposition the brand. According to him, the time to revisit her strategies must not be further delayed.
“Every serious firm should be able to utilize their resources very well, should be able to have a good strategy of how they manage their risk and should have a very robust investment decision that attracts returns to the company. They must also design a corporate frame work that will send a positive signal to the public and subscribers. For the recovery of any firm from loss, a lot has to be done internally.”