The Decline of Globacom: What Went Wrong for Nigeria’s Once-Promising Telecom Giant

When Globacom launched in 2003, it entered a crowded telecom market, behind big names like MTN and Econet. But it quickly made a name for itself with bold moves like per-second billing, which changed the game for Nigerian telecom customers. In 2004, they made waves by giving away SIM cards for free, while competitors charged up to ₦2,000 for theirs. They also made big investments in internet services early on, even launching a huge undersea cable by 2009 to help Nigerians get better internet.

But over time, things began to change. Globacom’s innovation and rapid growth slowed down, and the company struggled to keep up with the competition. Now, the company’s market share is down to just 13%, and it has only 19.1 million subscribers—far behind rivals MTN and Airtel.

The Path to Decline

Several factors have contributed to Globacom’s struggles. First, there have been doubts about Nigeria’s total telecom subscriber numbers, with some insiders suspecting they’ve been inflated for years. New rules from the Nigerian Communications Commission (NCC) forced companies to recount their subscribers, and Globacom had to remove 40 million inactive users. MTN and Airtel, on the other hand, are still leading the market with 78 million and 53.7 million active subscribers, respectively.

On top of this, Globacom has faced issues with its service quality. A major cyberattack in 2023 exposed customer data, and the company didn’t report it for a whole year. This hurt its reputation even more.

Issues with Leadership and Corporate Culture

Globacom also struggled with leadership problems. After the cyberattack, the company appointed a new CEO and board of directors in October 2024. This is the first time someone outside the Adenuga family has taken charge since Globacom’s founding in 2003. Sources say the company was often run like a “one-man business,” with founder Mike Adenuga making all the major decisions.

Corporate governance has also been an issue, with some insiders pointing out underinvestment and weak management as major causes of the company’s decline. For example, Globacom once considered teaming up with telecom giant Orange, but the deal never happened.

Financial and Regulatory Issues

Globacom has had trouble paying its debts on time. It owes MTN Nigeria ₦3 billion in interest on fees for using their network, but managed to settle for just ₦2 billion. The company has also been known to delay payments to other vendors and partners.

Despite being Nigeria’s only local telecom company in a market dominated by foreign players, Globacom has continued to rely heavily on its founder for funding. Experts believe that this, combined with years of underinvestment, has hurt its ability to keep up with competitors who are spending money on improving their networks.

What’s Next for Globacom?

There are concerns that Globacom could follow in the footsteps of 9Mobile, another Nigerian telco that had an early advantage but eventually struggled with financial and ownership issues. However, some believe Globacom still has potential, with its submarine cable and national license giving it an edge over smaller players.

With a new CEO, a revamped board, and more attention from regulators, there’s a chance the company could turn things around. Industry experts say that if Globacom can focus on improving its leadership, investments, and customer service, it might be able to regain its position in the market.

(Article is curated from Techcabal)