When Globacom launched in August 2003, it entered a crowded telecom market, two years behind giants MTN, Econet, and MTEL. Despite this, it quickly made an impact with bold moves, positioning itself as a serious competitor. By pioneering per-second billing—unlike the ₦50-per-minute norm—it immediately disrupted the market, forcing rivals to follow suit.

If per-second billing was a game-changer for the industry, Globacom pulled off another stunt in October 2004 by offering free SIM cards—undercutting competitors selling theirs for ₦2,000. This aggressive price war was only possible for a late market entrant, and Globacom backed it with hefty marketing campaigns, signing Nigeria’s biggest celebrities as ambassadors.

By 2004, long before other Nigerian telcos recognized that data, not voice, was the industry’s future, Glo had begun offering 2.5G internet service to 70,000 subscribers. By 2009, it had landed a 9,800km submarine cable in Lagos, showing the depth of its ambition to connect Nigerians to the internet. “We got the people talking,” said one of its ads. 

Globacom raced to early success, and many Nigerians identified with the first local telecoms company with catchy ads. However, as the business grew, it lost its innovative DNA and struggled to maintain the momentum of its first eight years.

The path to decline

Despite its early success, Globacom now feels like a company in decline. With its market share down to 13% and just 19.1 million subscribers, the once-innovative leader now grapples with stagnation. Speculation has mounted for years that Nigeria’s telecom subscriber numbers—217 million in early 2024—were inflated. Industry insiders believed the lack of clear rules on counting subscribers who had been inactive for up to six months allowed telecom operators to pad their numbers. 

A recent audit and the rule that establishing 90 days of inactivity as the clear baseline by the Nigerian Communications Commission (NCC) has helped clarify issues. Due to those new rules, Globacom was required to recount its active subscriber base, shedding 40 million subscribers who were inactive in the last 90 days. While competitors MTN and Airtel also shed a few million active subscribers, they’re now the clear market leaders with 78 million and 53.7 million active subscribers, respectively. 

Globacom’s reputation for unreliable service has hurt growth. A major cyberattack in August 2023 exposed customer data to unknown hackers and went unreported for a year, exacerbating the reputational damage.

Corporate culture and governance issues

One month after the hack was reported, the privately held company named a new CEO and board of directors in October 2024 after some pressure from the NCC. According to two company insiders, it is the first time since 2003 that someone outside Mike Adenuga’s family will control the company. 

As Adenuga’s leadership entered the 2020s, Globacom’s reputation for innovation had been undone, leaving an image of a company hampered by a one-man bureaucracy. 

“It is run like a one-man business, and everything runs up to Mike Adenuga. They can’t take any decision without his approval,” said one business close to the business. 

That person claimed several of Adenuga’s companies share the same employees, blurring the lines between the businesses. 

Telecom executives and analysts highlight a decade of underinvestment and weak corporate governance as critical factors behind Globacom’s decline. Once a leader in innovation, the company’s culture shifted, stalling progress and leading to mounting operational challenges. Telecom regulators have mostly looked the other way with issues connected to Globacom. 

Its curious culture may have cost the company more, with one industry source claiming Globacom was poised to enter a potential partnership with telecoms company Orange after the French company expressed interest in a  Nigeria expansion. Ultimately, the move did not materialize. 

Regulatory and financial challenges 

As the only local telecom company in a market dominated by foreign players, Globacom has enjoyed a leniency that industry players have questioned. Despite owing MTN Nigeria ₦3 billion in interest on interconnection fees for 15 years, Globacom settled the debt for ₦2 billion without facing significant consequences.

This penchant for indebtedness also extends to vendors and partners

“They don’t pay Value Added Services on time, they don’t pay interconnect fees on time. It is the same thing they do to partners; they will not pay until 180 days,”  said one person familiar with the company’s operations. 

At least two other vendors that have worked with Globacom in the past ten years claimed the company has a reputation for late payments. 

This reliance on Adenuga, who is widely believed to be the company’s sole financier, is believed to be linked to a perennial underinvestment in the company. 

“To be significant and deliver the right service, you probably need $1 billion in capital expenditure annually,” said Bolaji Balogun, CEO of Chapel Denham, who helped execute the $1.67 billion sale of Econet Wireless to Celtel in 2005, said at a telecom event in August 2024.

Unlike other major operators, Globacom doesn’t outsource its over 8,700 towers to companies like IHS; instead, it builds and maintains them with foreign technical experts. 

“The cost of operating those towers alone is enormous, covering energy, security, community engagements, and personnel costs,” said an industry expert.

Infrastructure-heavy sectors like telecoms require ongoing investment to maintain service quality. For example, you can have a submarine cable, but without deploying terrestrial cables to reach individual users, connecting towers with fiber cables, and building more towers where needed, the network will struggle.

The need to continually improve quality is also why MTN and Airtel are investing in data centre infrastructure. While both companies started out with using existing data centres, they are now building their own data centres. 

Beyond infrastructure, Globacom has made little investment in its Payment Service Bank (PSB) licence, acquired in 2020, resulting in stagnant growth for the service. Meanwhile, MTN and 9Mobile, with similar licences, have added millions of users to their mobile money platforms.. 

The future outlook

There are worries that Globacom could go the way of 9Mobile, another telco that had a flying start before funding troubles and several ownership changes left it the industry’s sick man. Yet, many believe Globacom has the capacity, a submarine cable that’s a significant revenue stream, and a national operator licence that allows it to launch a wide range of offerings.

With a new CEO and board and extra regulatory scrutiny, it is possible to arrest Globacom’s slide. 

“The new NCC EVC is focused on transforming Glo’s approach, and the commission is invested in seeing Globacom operate differently in the industry,” one person at the NCC who declined to be named said.

Globacom did not respond to a request for comments. 

The consensus among industry leaders is that Ahmad Farroukh’s stay as CEO will be short-lived. It highlights a disbelief that Globacom’s owner will be able to stay out of the business and another present reality: only a commitment to the new corporate governance structure and a return to innovative ways will pull Globacom back on the path of growth.