Concepts and Cases
Edited by Joseph Mark S. Munoz
Chapter 11: Serving the Poor: Innovative Business Models at the Base of the Pyramid
11. Serving the poor: innovative business models at the base of the pyramid Jamie Anderson and Martin Kupp1 THE CASE OF CELTEL NIGERIA In mid-2007, Celtel Nigeria was the second-largest mobile telecommunications company in the Nigerian market with a 28 per cent market share and a subscriber base of approximately 8 million. The company had experienced considerable success in serving Nigeria’s cities and larger towns, but had only recently shifted its attention to serving poorer consumers in rural areas – a massive but undertapped market. However, this shift from urban to rural had not been easy, and although some 50 per cent of Nigeria’s population lived in rural regions the challenges of reaching them sometimes seemed overwhelming. In order to address the opportunities and challenges of serving lowincome consumers in rural Nigeria, Celtel Nigeria launched the socalled Rural Acquisition Initiative (RAI) in 2007. Instigated by Celtel Nigeria’s Chief Operating Officer (COO) Lars Stork, the RAI built on an innovative base station site (BTS) micro-franchising model, the first use of such to serve rural consumers in Africa. The initiative provided a new route to market model and rapidly and profitably scaled the provision of mobile services to rural communities. In the words of Lars Stork: In July last year we set out to develop a unique new route to the rural market, an initiative that will help us to profitably reach the 50% of Nigerians who live and work in rural communities. Beyond commercial success for Celtel, our broader objectives are to...
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