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<title-group><article-title>An Assesment of Etisalat International Marketing Strategy for the Nigerian Market</article-title></title-group>
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<contrib contrib-type="author"><name><surname>Ogunmola</surname><given-names>Eyitayo Ebietoni</given-names></name><xref ref-type="aff" rid="aff1"/></contrib>
<aff id="aff1">Business Strategy, Leadership and Change; Edinburgh Business School; Heriot Watt University</aff>
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<abstract><p>Etisalat is a global business which currently operates in 16 countries across the Middle East, Asia and Africa, and as one of the 25 leading global telecoms companies, the management team has identified Nigeria, the largest black Nation on earth as a strategic opportunity to increase both its brand perception and returns to its shareholders. This piece, written based on few frameworks and models to provide an analytical recommendation to the leadership of Etisalat on how to penetrate the market, and also sustain its presence despite the monopolistic competition. The report provides an insight into a business case establishing the growth of LTE subscriptions in the market and also provides a macroeconomic analysis of the business environment of the Nigerian market. The popular SWOT analysis framework guided the critics of the status and capability of Etisalat as a global business, providing insight to its competitive advantages and its area of development as a brand. One identified opportunity for Etisalat, among many others, is the strong governmental and public relations capability of Etisalat which is considered a strategic opportunity to grow its presence in the region. The report also analyzed the economy of the country from a macro and more objective perspective. Identifying key challenges and strategic case for why Etisalat would succeed in Nigeria despite the obvious challenges. Identifying FDI in the telecoms industry as a growing area, the country has been able to help service businesses attract more infrastructural investment which has also reduced the cost of operation at scale. Finally, the piece provides critical short-term and long-term recommendations with an implementation plan which further identifies areas of immediate opportunities.</p></abstract>
<kwd-group kwd-group-type="author"><kwd>Etisalat</kwd><kwd>Management</kwd><kwd>Marketing strategy</kwd><kwd>SWOT analysis</kwd></kwd-group>
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<sec id="sec-1"><label>1</label><title>Introduction</title>
<p>Headquartered in Abu Dhabi, United Arab Emirates, Emirates Telecommunication Group Company PJSC, doing business as Etisalatis a multinational telecommunication service provider that is ranked one of the top 15 largest mobile network providers globally. Currently, operating in 18 countries across the globe, the firm wishes to expand its business operations to Nigeria, one of the fast-rising economies in the World with a population of almost 200 million people. Founded 43 years ago, Etisalat launched its Middle East&apos;s first mobile network in 1982. Since then, the global corporation has expanded its business operations across the Middle East, Sudan, Afghanistan, Ivory Coast etc.</p>
<p>The international business has established a global footprint to do business in 16 countries across Asia, the Middle East and Africa. The company is highly renowned for operating in a wide array of macro-economic and geopolitical contexts. Anticipating the GDP growth of countries like UAE, Morocco, Pakistan and Egypt will improve in the face of oil price volatility, the company anticipate a strategic re-entry into emerging economies like Nigeria to create stronger leverage in its global competitive landscape.</p>
<p>Understanding that there is varying context, the company is developing a different entry strategy for different countries and market. This study does not just analyze the current competitive landscape of the markets where Etisalat is operating; it also provides a macroeconomic analysis of the Nigerian market to determine the best strategy to enter intothe West African Nation. Also, this piece provides some recommendations on how the company can provide value in Nigeria considering the unprecedented transformation that the telecoms industry is experiencing across the world, the evolution of technology, the change of business models, altering customer needs and behaviour, the rise of competitors which have drained the top players of their market shares. This all-encompassing international marketing intelligence is aimed to help the top leadership of Etisalat International make a more informed decision on its entry into Nigeria and also provides a highlight on how to survive the local competition.</p>
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<sec id="sec-2"><label>2</label><title>Business Case</title>
<p>This piece is a presentation made to the leadership of Etisalat on how to regain its presence in Nigeria after it failed in Nigeria in 2017 due to unpaid debt which claimed its market relevance in its West African market. According to the Africa Market Outlook 2015, the number of mobile LTE subscriptions in Nigeria from the 2nd quarter of 2014 to the 2nd quarter of 2015 has experienced a substantial increase. Nigeria had 486 thousand LTE subscriptions in the second quarter of 2015 which was a considerable increase from 407 thousand in the 1st quarter of 2015. The same study reveals that Nigeria is second on the continental ranking for the Mobile LTE markets in Africa by a number of subscriptions in the 2nd quarter of 2015 <xref ref-type="bibr" rid="ref-1">[1]</xref>. As at December 2018, there is a total of 174 Million different subscribers in Nigeria with the MTN Nigeria Communications holding the largest market share at 38%.</p>
<sec id="sec-3"><label>2.1</label><title>Company Overview</title>
<p>Ranked 25th largest telecommunication operator globally, and largest in the United Arab Emirates in 2016, Etisalat had 12.9 million Euros in revenue in the same year <xref ref-type="bibr" rid="ref-2">[2]</xref>. In 2017, Etisalat was ranked top in the Middle East as the most valuable brand by Brand Finance in its Middle East 50 2017. Coming top with a 7 Billion US Dollar brand value against other competitors like Emirate Airlines. Structured as a global business, Etisalat International Investments which oversees global and international business growth and expansion outside the UAE. The International Business Unit, under the leadership of Hatem Dowidar, CEO of Etisalat International, has successfully expanded its presence to 14 countries beyond its headquarters. The global management team consists of 14 members, with 11 directors on the board. vision is to shape the digital future and empower societies through innovation and connectivity.</p>
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<sec id="sec-4"><label>2.2</label><title>Strategy Statement</title>
<p>In recent years, telecoms and adjacent industries have been in a state of flux on account of ongoing changes within the macroeconomic environment and the increasing and evolving influence of digital developments. In light of this, the Etisalat Group has conceived a new vision supported by a bold corporate strategy to maximise shareholder value in this developing market landscape.</p>
<p>In 2017, the company delivered consolidated revenue of AED 51.7 billion and consolidated operating profit of AED 17.45 billion which represented about a 3% increase YOY in the UAE and the Group’s consolidated revenuedeclined 1% to AED 51.7 billion in 2017 due to the unfavourable exchangerate movements mainly in Egypt. However, the business hits a year-over-year revenue growth was 2%. While the company has experienced some challenges with its decline in its global profitability, the company&apos;s shareholders make a case for global growth as consolidation for the decline.</p>
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<sec id="sec-5"><label>2.3</label><title>Company Assessment</title>
<p>International Revenue Outlook: Revenues of International consolidated operations for 2017 declined year-on-year by 7% to AED 20.0 billion negatively impacted by the unfavourable exchange rate movements in Egypt in addition to competitive pressure of mobile segment in Morocco and a fixed segment in Pakistan. Revenues from international operations represented 39% of Group&apos;s consolidated revenue. The report uses the SWOT analytical framework to provide a structured assessment of the global operations of the company.</p>
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<sec id="sec-6"><label>2.4</label><title>SWOT Analysis</title>
<p>The SWOT tool is used to provide insight and differential analysis of the current status and business condition of Etisalat, helping the international marketing team to make a more informed decision. The framework also will help is provide information on the strategic strengths, weaknesses, opportunities and threats of Etisalat as it considers expanding into the new market <xref ref-type="bibr" rid="ref-3">[3]</xref>.</p>
<table-wrap id="tab1"><label>Table 1</label><caption><p>Swot analysis of the company.</p></caption><graphic content-type="pdf-region" xlink:href="pdf-region:2:66,112.9,537.1,472.5"/><graphic content-type="pdf-region" xlink:href="pdf-region:3:66,731.1,537.1,756.2"/><p content-type="note">This table is shown in the PDF version of the article.</p></table-wrap>
<p>The demographic profile of the market. Nigeria, for instance, has a growing youth population.</p>
<p>Mobile Number Portability (MNP) enables mobile subscribers to keep their mobile telephone numbers</p>
<p>another.</p>
<p>Strong governmental and public relations which help for new emerging market penetration.</p>
<p>Ever-changing customer behaviour and needs pose a new business opportunity for the company.</p>
<p>Investment capability for structured product management and diversification.</p>
<p>Etisalat can practice a differentiated pricing strategy by leveraging on new technology.</p>
<p>More acquisition opportunities of start-ups disrupting communications.</p>
<p>The economic boom and increasing customers’ purchasing power in emerging and fast-rising</p>
<p>environment for Etisalat.</p>
<p>Threat Focus on oil-producing economies and drastic reduction of oil prices might affect the profitability of the company.</p>
<p>New markets have a lot of startups offering more</p>
<p>Currency fluctuations because of the volatile political situation in the countries where Etisalat is operating.</p>
<p>Access to human capital and talent in developing economies.</p>
<p>Cultural differences might also pose some threat to the leadership of Etisalat.</p>
<p>Imitation of the counterfeit and low-quality product is also a threat to Etisalat’s product, especially in the emerging markets and low-income markets.</p>
<p>Direct and intense local competition and protectionism of the government from international business.</p>
<p>Liability laws in different countries are different and</p>
<p>given changes in policies in those markets.</p>
<p>when changing from one mobile network operator to affordable services.</p>
<p>economies will help create a more profitable business Etisalat may be exposed to various liability claims</p>
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<sec id="sec-7"><label>2.5</label><title>Macroeconomics: The Nigerian Market</title>
<p>Benchmarking against other African countries in terms of FDI, Nigeria has the highest number of investment influx and also ranks second in Sub-Saharan Africa. Owing this to the political and economic landscape, the country since 2007 has sustained a 50% FDI in the energy sector and 50% in the service sector <xref ref-type="bibr" rid="ref-4">[4]</xref>. As of 2016, the telecommunication industry attracted about 30% of the entire FDI in Nigeria. While there have been debates about the correlation between FDI and telecommunication development in Nigeria, it’s also important to note that infrastructural projects are valued at $100 billion.</p>
<p>A country of about 180 million people with a Gross Domestic Product per capita recorded at 2412.41 US dollars in 2017, the prospect of profitability in telecommunication is high. In the context of FDI as a framework for analyzing the attractiveness of the industry, the telecommunication sector has been mentioned by the Central Bank of Nigeria to be attractive to global investors. This investment, however, impacts infrastructural investment in technology and human capital for the sector <xref ref-type="bibr" rid="ref-5">[5]</xref>.</p>
<p>As the FDI investment improves, the Telecoms infrastructure improves, and this has an effect on the cost of transactions from the customers&apos; end and increases the output and productivity of the industry, hence improving the economy <xref ref-type="bibr" rid="ref-6">[6]</xref>. Telecommunication is recognized as one of the fastest-growing sectors in Nigeria but competition is getting fierce among players, hence rates are dropping <xref ref-type="bibr" rid="ref-7">[7]</xref>.</p>
<p>With major references to mobile telephony and data transmission, the Nigeria telecoms industry is at emphasis a fast-rising market. The focus ofthis analysis is to use some more structured analytical techniques to provide insight into Etisalat as a new entrant in the Nigerian market.</p>
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<sec id="sec-8"><label>2.6</label><title>PESTLE Analysis of the Market</title>
<sec id="sec-9"><label>2.6.1</label><title>Political</title>
<p>As a young democracy, Nigeria is growing and emerging in its political scape. Currently in the middle of an election, this impacts political stability and investors are laid back to understand the next direction of the government. Evidently, this political instability has also been shown to affect FDI in the past recent months as an investment has dropped by almost 21% in Nigeria.</p>
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<sec id="sec-10"><label>2.6.2</label><title>Economic</title>
<p>Over the past 4 years, the local currency of Nigeria, Naira has dropped against the dollar and now sells at the money market at N300 to USD 1. Inflation continues to be in double digits and the unemployment Rate has risen to 23.1%, with 20.9m Nigerians jobless <xref ref-type="bibr" rid="ref-8">[8]</xref>, <xref ref-type="bibr" rid="ref-9">[9]</xref>. The country&apos;s GDP growth rate is at -13.98, and the GDP of the country is at 375.8 billion USD GDP, no. 27 in the Global Table of PPP <xref ref-type="bibr" rid="ref-10">[10]</xref>. Currently in Nigeria, according to the CIA&apos;s most updated report, total mobile cellular subscriptions are about 145 million. This figure gives the total number of mobile cellular telephone subscribers, as well as the number of subscriptions per 100 inhabitants <xref ref-type="bibr" rid="ref-9">[9]</xref>.</p>
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<sec id="sec-11"><label>2.6.3</label><title>Socio-cultural</title>
<p>Nigeria is a highly diverse Nation with about 250 ethnic groups and almost 520 languages spoken across its 923,000 sq km of land. With a population of almost 203 million people <xref ref-type="bibr" rid="ref-9">[9]</xref>, Nigeria is big and highly diverse. The most populated country in Africa has its challenges when it comes to reputation and influence across the Sub-Saharan. Challenged with ethnic violence, corruption, internet fraud, and regional unrest in the northern part of its division. Since 2015 after the election of the new leadership, the country has taken huge steps to fight corruption head-on and put back its reputation to the top.</p>
<p>Currently, about 80% of the entire population is below 40% and this youthful population is the key driver to the innovation ecosystem of its entrepreneurial hub. Also, about 40% of the population is below 15 years.</p>
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<sec id="sec-12"><label>2.6.4</label><title>Technology</title>
<p>The telecoms industry has been highly influenced by the efforts of major submarine fibre optics high bandwidth cables. The arrival of companies like MainOne, Glo1 etc has increased accessibility and reach. Nigeria is also linked to Europe by SAT-1 and accessibility and data transmission have been more affordable. The country has also moved, over time, from the 2.5G bandwidth to 4G.</p>
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<sec id="sec-13"><label>2.6.5</label><title>Legal and regulatory</title>
<p>Nigeria&apos;s telecoms industry is primarily governed by the Nigerian Communications Act of July 2003 amending the Act of 1992. The act put a total end to the monopoly of Nitel and created a regulatory body called the National Communications Commission (NCC) which is charged with ensuring fair play in the market. Although the market is best categorized as an Oligopoly, it is highly regulated. This type of unstructured market competition has also given rise to the downward pressure on prices for mobile services. With the influx of data technology companies and start-ups in the communication sector, respect for intellectual property rights is still on the low.</p>
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<sec id="sec-14"><label>2.7</label><title>An Evaluation of the Nigerian Telecommunication Industry</title>
<sec id="sec-15"><label>2.7.1</label><title>Competitiveness: application of Porter’s five forces model</title>
<p>According to Porter <xref ref-type="bibr" rid="ref-11">[11]</xref>, the major reason why firms develop strategies is to cope with the intense competition either by differentiation or low-cost strategy. Hence, the dynamics of the competition that exists in the telecoms industry in Nigeria are primarily captured by the five crucial forces which are shown in Table</p>
<table-wrap id="tab2"><label>Table 2</label><caption><p>Porters’ forces of Etisalat company.</p></caption><graphic content-type="pdf-region" xlink:href="pdf-region:5:66,118.9,537.1,756.2"/><p content-type="note">This table is shown in the PDF version of the article.</p></table-wrap>
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<sec id="sec-16"><label>2.7.2</label><title>Problem identification</title>
<p>The report is structured to help the management team identify immediate and long-term challenges and problems the company will encounter in its quest to expand to a new market, Nigeria. The approach is to use two different models and approaches to analyze the situation of the market, identify the problems with the new market and finally use the same approach to identify market loopholes.</p>
<p>The first approach is to use the Porter’s internal value chain framework to examine how values are delivered to users in the industry and use the same model to identify major value roadmap problems.</p>
<fig id="fig1"><label>Figure 1</label><caption><p>Competitive strategy [11].</p></caption><graphic content-type="pdf-region" xlink:href="pdf-region:6:66,453.9,537.1,655.2"/><p content-type="note">This figure is shown in the PDF version of the article.</p></fig>
<p>Basic economics describes that a firm will be profitable if its total revenue exceeds its cost of delivering value to its customers. Hence, the concept of value chain analysis, postulated by Porter and Stern <xref ref-type="bibr" rid="ref-14">[14]</xref> is to help the firm understand not only their value chain operations but also their competitors, suppliers and distributors&apos; value chains. Using the same model, described in the diagram below, we will be examining basic problems that align with different parts of the value chain.</p>
<table-wrap id="tab3"><label>Table 3</label><caption><p>Porter analysis of Etisalat company.</p></caption><graphic content-type="pdf-region" xlink:href="pdf-region:6:65.9,62.8,537.1,344.3"/><graphic content-type="pdf-region" xlink:href="pdf-region:7:66,706.3,537.1,756.2"/><p content-type="note">This table is shown in the PDF version of the article.</p></table-wrap>
<p>Service activities This type of activity helps ensure that value Human capital and engineering talents delivery to the customer is enhanced and at scale maintained. Brand clash-most of the decentralized This includes support services, upgrades, service systems also work with other training, installation, spare parts etc. mobile operators It also includes invoicing, customer service Contract enforcing and manual services.</p>
<p>Support Activities Procurement activities In the telecoms industry, procurement is Access to competitiveoptions connected to network infrastructure and Payment model service development. Legal enforcement</p>
<p>Human resource Activities include recruiting, training and Culture alignment management development, retention, remuneration, Access to talents reward systems and compensation of Alignment with new organizational employees andmanagers. processes, policies, and systems Change management Firm infrastructures This includes high-level general Scaling leadership management, strategic planning Defining management structure management, legal services, accounting and finance, accounting, public relations.</p>
<p>Technology Such as research and development, process This is a long-term investment with a development automation, design, and redesign. less clear path to profitability.</p>
<p>Make or buy analysis would need to always be conducted.</p>
<p>Also, using the PESTLE analysis model, we’d identify a few macro-economic challenges that Etisalat willlikely experience. While it is quite impossible for Etisalat as a brand to solve these Macro-economicchallenges, it’s important to understand the dynamics of the larger context.</p>
<table-wrap id="tab4"><label>Table 4</label><caption><p>PESTLE analysis of Etisalat company.</p></caption><graphic content-type="pdf-region" xlink:href="pdf-region:7:65.9,115.9,537.1,340.6"/><p content-type="note">This table is shown in the PDF version of the article.</p></table-wrap>
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<sec id="sec-17"><label>3</label><title>Recommendations to the International Marketing Team</title>
<p>It is important to note that Etisalat is a late entrant in the market in Nigeria and the firm needs to develop a more competitive strategy to gain a market share. This means Etisalat would have to compete aggressively with players that have already gained a large market share and also influenced both the supplier end of the chain and the regulators. The piece highlights some strategic recommendations:</p>
<sec id="sec-18"><label>3.1</label><title>Partnership, Alliance and Cooperation</title>
<p>The firm needs to redefine its model to allow for a more robust and structured form of partnership. Etisalat would need to consider a sharingmodel that allows it to share already existing infrastructure, suppliers, and channels with competitors. Also, the firm needs to consider a structured partnership for passive infrastructure share as this allows for a considerable reduction in investment across the board. The firm might consider landing on the MainOne or the Glo1 Submarine cables for point of data, mobile broadband and other value-added services.</p>
</sec>
<sec id="sec-19"><label>3.2</label><title>Differentiation and Creative Pricing</title>
<p>The technology landscape has changed greatly with mobile applications with growing social networking capabilities. There is a whole lot around e-health, e-policing, e-education, e-banking etc, and this internet-enabled application offers Etisalat the opportunity to leverage the unique customer needs and demands to offer value. Hence, Etisalat can diversify its product base to generate extra revenue and attract new subscribers. This approach, at scale, will help Etisalat dominate an emerging market. One of the major areas of innovation is for Etisalat to offer unique solutions for free for its subscribers and a pressing challenge is the e-policing and e-traffic control offering.</p>
<p>Ordinarily, because of the monopolistic competitive feature of this market, prices are known to fall as new firms get into the market and product differentiation will be a key factor. Also, Etisalat can consider offering a highly competitive model which allows for price flexibility in areas where the purchasing power of the customers is low. Also, the company can consider opportunities to offer a strategic partnership with manufacturers in different regions to offer after-sale services on user-end equipment, provide ‘package solutions’ that are viewed as a value-added service and differentiate you from the competition <xref ref-type="bibr" rid="ref-15">[15]</xref>. However, competing on price is not always a worthwhile long-term strategy as firms might compete away profits. Hence, Etisalat must considerdifferentiation of scope which is driven by quality- this might be an avenue to offer premium values at high prices.</p>
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<sec id="sec-20"><label>3.3</label><title>Focus and Innovate</title>
<p>Another leverage Etisalat can have over its competitors is the value that comes with technology innovation. Especially with the increase in innovation technology in Lagos, Etisalat can position itself as the ‘Friend of Tech’. This positioning will give the business an opportunity to make use of its acquisition and merger capability to take over a few technology-driven products that are disrupting the industry in Nigeria <xref ref-type="bibr" rid="ref-15">[15]</xref>.</p>
</sec>
<sec id="sec-21"><label>3.4</label><title>Implementation</title>
<p>The implementation framework is divided into two major components based on the timeline. The short-term strategies are worked out to be deployed within the first 2 years while establishing the brand and its values in the telecoms industry. The long-term strategies are to be deployed post 3 years and these strategies are identified to help consolidate Etisalat’s presence in the regions.</p>
</sec>
<sec id="sec-22"><label>3.5</label><title>Short term Plans</title>
<p>The short-term strategies are focused on ensuring that real values are offered to the users and customers and ensuring that the company achieves a break-even within the first 2 years of working within the market. Highlighted below are the short-term plans that this report has identified.</p>
</sec>
<sec id="sec-23"><label>3.6</label><title>Partnership, Alliances and Coalition</title>
<p>To join the battle for supply chain access, one of the easiest approaches to gaining access and building the company’s network of suppliers is to join organizations and coalitions that help with access networks.</p>
</sec>
<sec id="sec-24"><label>3.7</label><title>Sales and Marketing</title>
<p>One approach that has worked in the past for new entrants is to outsource the marketing activities to firms that are specialists in marketing.</p>
</sec>
<sec id="sec-25"><label>3.8</label><title>Service</title>
<p>The short-term goal is to engage local engineers that are regionally dispersed and working directly with local communities. An approach to scaling this outcome is providing incentives to local service providers that work directly with the brand.</p>
</sec>
<sec id="sec-26"><label>3.9</label><title>Operations</title>
<p>One of the few challenges in the short term is operational efficiency. The recommendation is to work directly with the HR unit of the organization to keep developing the human capital in-house in operational efficiency.</p>
</sec>
<sec id="sec-27"><label>3.10</label><title>Long Term Strategies</title>
<p>The long-term implementation strategies should focus on how to overcome some of the forces that are high in the market so that after years of establishing itself in the market <xref ref-type="bibr" rid="ref-16">[16]</xref>, Etisalat can become a leading industry player.</p>
<p>The long-term plans, based on the Porter 5 forces, are highlighted below:</p>
<p>I. The Etisalat supplier network: as Etisalat grows and becomes known in Nigeria, it is important to start building a network of suppliers that are loyal to the brand. Independent of the interdependencies on the ecosystem of suppliers in Nigeria, this approach allows the brand to navigate the supply hurdle and scale its product scope.</p>
<p>II. Innovating through differentiation: Etisalat needs to keep leveraging the technology emergence in the service industry and provide its customer free (or most affordable) m-services as complementary values. III. Increasing barrier to entry: since the threat of entry is high, Etisalat needs to build a model that allows it to scale and influence regulators to set in new policies that raise the barrier to entry. This is done majorly by public relations and government engagement.</p>
</sec>
</sec>
<sec id="sec-28"><label>4</label><title>Conclusion</title>
<p>As technology changes the dynamics of competition in the telecommunication monopolistic market in Nigeria, it’s important for Etisalat to note a few strategic options as it expands its presence in Nigeria which is becoming a fast-rising market. The strategic plans highlighted in this piece will help the international marketing team re-enter the Nigerian market and provide immediate value to customers in a blue ocean niche of M-servicing, providing it with the immediate leverage it needs to gain some market share and also offer continuous value through innovative differentiation.</p>
</sec>
<sec id="sec-29"><title>Funding</title>
<p>Not Applicable</p>
</sec>
<sec id="sec-30"><title>Data Availability</title>
<p>Not Applicable.</p>
</sec>
</body>
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