Competition to drive telecoms centre as Zain enters the market.

With the licence of two additional mobile phone operators, and the anticpated launching of Zain Ghana operations, some industry players have already psyche up their activities, Boahene Asamoah examines how the much anticipated competition is expected to impact on customers.


TELECOMS watchers are anticipating real competition as Zain rolls out its services and products in the country by the close of the year.
With a huge financial muscle, the competition from Zain could be felt from afar with huge bill boards and television commercials even before it begins operations, making some giant companies rethink their strategy.
Already, MTN, the leading mobile network has began to rethink its strategy and has announced that customers can now have their mobile numbers for free from February next year. Previously, subscribers to its pay and go service have a given date and time by which time such subscribers have to re-load their credit or would have their services suspended.
Again, MTN has now abolished the $40 dollar charge for roaming services it introduced sometime ago. Now there is a new commercial that requires a subscriber to only pay local charges when the person is outside the home country.
Ghana is now home to five global brands, Vodafone, MTN, Zain, Tigo, Kasapa and yet Glo, each with strong balance sheet and huge subscriber base across their global operations.
Anticipating the introduction of the one-network concept from Zain which enables a subsrciber to be able to use the same number and pay local charges wihtin countries of operations, vigorous marketing communications have already began, introducing no roaming charges for West Africa.
Zain had indicated that during its take-off operations in Ghana, subscribers should be to access it network within the sub-region through its seamless one-network concept.
Indeed the competition is not only limited to these two networks, Vodafone which has controlling insterest in state run Ghana Telecom and Tigo, have also through its market communications began the process of attracting back into its fold, their old customers, by enticing them with offers to re-active their telephone lines.
But analyst fear price wars would be a major feature of competition to win over customers.
But the CEO of ZainAfrica, Mr Chris Gabriel would rather prefer what he describes as “rational competition” as price wars would eventually lead to the collapse of the entire industry.
Although Zain has indicated that it would not compete on price, but on network quality, indications are that other operators were likely to go the price war way.
Examples abound in Nigeria, where Glo brought down prices of the industry down and introduced the per second billing instead of the bulk charges. Again, the monthly charges for internet service by some operators had to abolished and prices dropping by almost 50 per cent.
However, network quality seems to be what most consumers in Ghana of mobile telecomunications are yearning for.
With a poor network quality most consumers are looking for the kind of network that would perhaps for the first time offer real value for money.
Again, analysts beleive that with the current mobile penetration of 35 per cent in the country, there was indeed huge potential in the mobile telecommunications sector to grow.
This is because according to analysts mobile penetration does not peak at 100 per cent and instances abound in Kuwait and some other countries where mobile penetration was well above 120 per cent.
This coupled with the expansion of the economy and ofcourse the oil find presents tremendous opportunity.
But market watchers are of the view that any market penetration strategy for late market entrants would deepen largely on how the four p’s of price, promotion, place and the product are mixed to yeild ultimate benefit to the customer.
According to research, one of the top most priority of mobile subscribers is that of network quality.
Industry experts think standards in the industry have fallen in spite of heavy investments, alluding to rest drop calls being experienced lately and poor quality network and the seemingly inability of the National Communications Authority (NCA) to walk-the-talk.
With Zain being granted the 3-G technology platform superior services are expected at an afforable prices.
The competition is expected to go even beyond mere price wars and network afforability, marketing integrated communications is expected to soar, with each mobile phone company pitching camp with a particular niche in the market.
Already, things have already started, with MTN loosing the sponsorship deal of Kotoko, while Tigo has grabbed that deal.
MTN for instance have invested heavily in football as some major sponsorship, Zain has chosen music as its main sponsorhip programme.
Interestingly, the very large segment of almost all the networks are targeted at the young people.
Giving the financial muscle of all the international players in the country, the competition is expected to be much keener in the coming months.
Zain for instance recorded a seven per cent increase in turn over across its operations amounting to $327 million at the end of the third quarter.
The results showed significant growth in revenues with customer numbers reaching 56.3 million.
For the third quarter of 2008, Zain Group recorded consolidated revenues of US$1.887 billion, an increase of 25 per cent compared to Q3-2007. The company's consolidated EBITDA increased by 20 per cent for the same period to reach $ 763.6 million.
Year-on-year customer growth across the two continents where Zain operates was 54 per cent with the Zain Group serving 56.3 million managed active customers at 30 September, 2008.
MTNs financial report for 2007 also shown strong financial support with the group showing 42 per cent growth for the period, with contributions to total revenue split 43 per cent, 43 per cent and 14 per cent among the SEA, WECA and MENA regions respectively.
With such strong financial performance the race to capture the mind and pocket of subscribers have been set with anticipated fierce competition from all five mobile phone operators.