Introduction

The economic reforms in Nigeria are favoring the telecommunications industry. Three companies dominate the Nigerian market, with Celtel figuring as the second operator with largest market share, and the entry of new competitors into the market is imminent.
Currently, Celtel’s is focusing on providing telecommunication services in urban regions. At the distribution level, Celtel simply distributes its products and services to dealers, after which it disengages from the supply chain. After the dealer, the distribution dynamics follow a fragmented structure traditional to Nigeria. In an effort to reach the goal of becoming the industry leader, Celtel now wants to expand into the rural market which until now is largely unexplored. The growth potential for new subscriptions comes largely from the rural area.
To achieve this goal, the company must overcome prevailing internal and systemic hurdles. First, the distribution is inefficient; the few points-of-sale in the rural Nigeria are very spread out, an even inexistent in some areas. Second, the unreliable power grid would require Celtel to invest in generators which usually are theft targets. Third, the Celtel brand is largely unknown and rural media isn’t too efficient due to vandalism and poor coverage. Finally, most rural people are poor; they have little access to phone devices and they demand lower prices.
Ethically, Celtel should consider if it is proper to promote and entice the rural poor to purchase the products given their scarce income? Does Celtel have a corporate responsibility towards the communities it plans to reach? Is the price being charged worthy of its value in light of quality issues? How should Celtel proceed with the expansion without forcing the staff into unfavorable working conditions?

External Analysis

Industry structure and trends
As the fourth fastest