The arrival of a
sixth operator in the already competitive Ghanaian mobile telecoms market
spells good news for customers keen to take advantage of aggressive pricing
policies and product innovation.
In recent years,
Ghana’s telecoms sector has benefitted from the country’s buoyant economy, which helped lead to a rise in
mobile phone take-up. However,
with competition intensifying in what is only a medium-sized market, companies
are finding themselves battling to deliver lower prices while keeping revenue
flowing.
Glo
Mobile Ghana, the country’s newest GSM operator and which is owned by the Nigerian
telecoms firm Globacom, announced in mid-September it had signed up 2m subscribers
since its launch in April, giving it a notable market share of around 8%. At
present, Glo is serving around 85% of the population from 1400 base stations,
which it aims to increase to 2300 by the end of the year.
The company has
also focused on keeping prices low, launching a new plan in September through
which it charges customers GHS0.06 ($0.03) per minute for calls to any network.
Tariffs drop to GHS0.02 ($0.01) for calls to a maximum of five friends or
family. Other attractions in the plan include 100 Mb of free data in the evening.
However, new data
suggests that increased competition, particularly Glo’s aggressive pricing
policy, could now be affecting average revenue per user (ARPU), which remained
reasonably steady in the three years leading up to 2012.
MTN, owned by the
South African firm of the same name, reported that its ARPU fell from $7.00 in
December 2011 to $6.30 in June of this year, although it still increased its
overall revenue by 22% to reach GHS734m ($389m) for the first half of 2012. The
company also announced in September that its subscriber numbers had reached
11m, 10 months after it hit the 10m-mark.
Estimated by the
National Communications Authority to have a 46% market share at the end of June
2012 and 50.5% according to its own figures, MTN has benefitted from a move to
focus on driving higher data volumes. Figures showed that revenues from its
data services rose 193% in the first half of 2012.
Data
services, which tend to produce higher margins for GSM operators, are playing
an increasingly important role in generating revenues across the industry as
prices of lower-value voice calls continue to fall and
penetration of GSM services passes the 80% mark.
Adil El Youssefi,
the new general manager of Tigo Ghana, told the local press in
September that competition was forcing GSM players to consider a number of new
measures, including increasing data services, selling innovative products and
reducing costs.
“Competition is
good to the extent that it brings the best out of every [telecommunications firm]
in terms of product innovation, and lower prices for consumers – but sometimes
too much of every good thing can be a bad thing,” he said.
A squeeze on
margins may encourage greater sharing of network infrastructure, which the NCA
is encouraging. “Co-location” of communication towers and other equipment would
both lower capital costs for companies, which could prove important, and help
improve coverage in more remote areas.
However, as
competition increases, the survival of all six players in the Ghanaian mobile
telecoms market may be determined by their ability to innovate and satisfy
customer demand.
oxfordbusinessgroup.com